There’s a famous observation from Dwight D. Eisenhower I’ve always found interesting:
“Plans are useless, but planning is indispensable.”
Another is Mike Tyson’s quip before a fight with Evander Holyfield:
“Everyone has a plan until they get punched in the mouth.”
What we know as “scenario planning” can be traced back to a Shell strategist named Pierre Wack in 1965. The scenario planning methodology he developed not only helped Shell anticipate and prepare for the 1973 Energy Crisis, but it eventually became a management best practice.
What struck me in a Polytechnique Insights profile about Pierre Wack is that scenario planning wasn’t intended so much to predict the future as to develop a learning culture.
Shell originally had a traditional planning department based on looking at past trends. In 1965, Pierre Wack was the first to develop scenario planning tools to study alternative futures. Interestingly, he began by sketching out two paths for the future, ranging from a “standard and harmonious world (based on free trade)” to a “world of internal contradictions (based on growing tensions and protectionism).”
As Polytechnique Insights described Pierre Wack’s approach:
“The objective has never been to predict the future. The aim of a scenario is to modify a decision-maker’s mental model…
“A decision-maker always acts rationally on the basis of his mental model, i.e. his view of the world, his habits, his experience and his perception of his environment…
“The aim of a scenario is therefore to question, challenge or influence the decision-makers’ [mental model]. This is why scenarios are less concerned with predicting outcomes than with understanding the forces that would lead to those outcomes…
“Scenario design is first and foremost a learning process.”
The best scenario planning can’t predict Black Swan events. But the learning culture Pierre Wack imagined can help us respond rather than react.
Here are a few related cartoons I’ve drawn over the years:
