{"id":11059,"date":"2022-05-26T06:48:00","date_gmt":"2022-05-26T11:48:00","guid":{"rendered":"https:\/\/flevy.com\/blog\/?p=11059"},"modified":"2022-06-11T06:47:51","modified_gmt":"2022-06-11T11:47:51","slug":"scenario-planning-oxford-approach","status":"publish","type":"post","link":"https:\/\/flevy.com\/blog\/scenario-planning-oxford-approach\/","title":{"rendered":"Scenario Planning: Oxford Approach"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"683\" src=\"https:\/\/flevy.com\/blog\/wp-content\/uploads\/2022\/05\/Strategy-2-1024x683.jpg\" alt=\"\" class=\"wp-image-11065\" srcset=\"https:\/\/flevy.com\/blog\/wp-content\/uploads\/2022\/05\/Strategy-2-1024x683.jpg 1024w, https:\/\/flevy.com\/blog\/wp-content\/uploads\/2022\/05\/Strategy-2-300x200.jpg 300w, https:\/\/flevy.com\/blog\/wp-content\/uploads\/2022\/05\/Strategy-2-768x512.jpg 768w, https:\/\/flevy.com\/blog\/wp-content\/uploads\/2022\/05\/Strategy-2-1536x1024.jpg 1536w, https:\/\/flevy.com\/blog\/wp-content\/uploads\/2022\/05\/Strategy-2-2048x1365.jpg 2048w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p>Financial uncertainties, unpredictable national and international scenarios, environmental hazards, and technological breakthroughs have taken organizations by a surprise.&nbsp; This has led many leaders to turn to Scenario Planning in order to come up with multiple possible scenarios\u2014instead of planning and devising strategy for a single possible event.&nbsp;<\/p>\n\n\n\n<p>Scenarios encompass plausible, but unpredictably important, situations and problems.&nbsp; They comprise combinations and variations of facts and related social changes. &nbsp;In Scenario Planning, possible scenarios are developed using diverse perspectives on potential future outcomes from teams of subject matter experts.<\/p>\n\n\n\n<p>Scenario Planning is a <a href=\"https:\/\/flevy.com\/browse\/flevypro\/best-practices-in-strategic-planning-2738\">Strategic Planning tool<\/a>\u2014that gained recognition in 1960s and 1970s\u2014used to develop workable, <a href=\"https:\/\/flevy.com\/browse\/marketplace\/strategic-plan-template-3209\">longstanding Strategic Plans<\/a>.&nbsp; The classic method to Scenario Planning allows analysts to create simulations for senior management to <a href=\"https:\/\/flevy.com\/browse\/flevypro\/strategic-decision-making-4011\">make informed decisions<\/a>.&nbsp; The method relates facts\u2014e.g., political, geographical, demographics\u2014with key drivers identified through trends\u2014e.g. economic, environmental, social, and technical.&nbsp;<\/p>\n\n\n\n<p>By preparing for predicted scenarios in advance, organizations can avoid weaknesses or effectively reduce their adverse effects than tackling real-life problems when facing emergencies.&nbsp; Royal Dutch\/Shell first utilized Scenario Planning to tackle the turmoil triggered by the 1973 oil crisis.&nbsp; The technique entails identification of factors that join in several ways to create unexpected possibilities. &nbsp;It involves factors, e.g. unprecedented laws, <a href=\"https:\/\/flevy.com\/browse\/flevypro\/the-innovation-process-3625\">technological innovation<\/a>, insights about the future, and values. &nbsp;Scenario Planning combined with Systems Thinking approach results in logical scenario development.<\/p>\n\n\n\n<p>Since the emergence of Scenario Planning as a planning tool, in the late 1960s, various types of Scenario Planning have surfaced.&nbsp; The most commonly used are:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Probabilistic Perspective\u2014Involves making predictions in percentage terms or as best-case versus worst-case scenarios.<\/li><li>Normative Perspective\u2014Entails envisioning what a future should look like.<\/li><li>Plausibility Perspective\u2014Involves recognizing the unpredictable part of uncertainty and exploring the sources of turbulence and uncertainty.&nbsp;<\/li><\/ul>\n\n\n\n<p>Lately, the <a href=\"https:\/\/flevy.com\/browse\/flevypro\/scenario-planning-oxford-approach-6216\">Oxford Approach to Scenario Planning<\/a> is being employed across the globe to examine a variety of circumstances.&nbsp; The approach focuses on 2 layers:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Immediate Business Environment:&nbsp; Comprising a company\u2019s suppliers, customers, competitors, partners, and other stakeholders.<\/li><li>External Environment:&nbsp; Comprising the factors that are outside the organization\u2019s direct control.<\/li><\/ul>\n\n\n\n<p>Organizations utilize Oxford Scenario Planning Approach in different ways to analyze diverse circumstances. &nbsp;Instead of <a href=\"https:\/\/flevy.com\/browse\/marketplace\/basic-statistics-and-probability-5557\">assigning probabilities<\/a> to scenarios, the Oxford Approach concentrates on perceiving and creating rational, thought-provoking, and practical scenarios. &nbsp;Each scenario in the Oxford Approach is a narrative that relates to potential variations in the organization\u2019s external and internal environment, regulations, and trends.<\/p>\n\n\n\n<p>The Oxford Approach to Scenario Planning has the following 5 core characteristics:&nbsp;<\/p>\n\n\n\n<ol class=\"wp-block-list\" type=\"1\"><li><strong>Scenario Planning should clearly address the constituents of organizational strategic framework.<\/strong><\/li><li><strong>A minimum number of potential realistic scenarios should be suggested.<\/strong><\/li><li><strong>Scenario Planning counts on redrafting frames and perceptions.<\/strong><\/li><li><strong>The Scenario Planning initiative calls for dedicated resources.<\/strong><\/li><li><strong>Scenario Planning is aimed at assessing various subtle signals.<\/strong><\/li><\/ol>\n\n\n\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/flevy.com\/browse\/flevypro\/scenario-planning-oxford-approach-6216\"><img decoding=\"async\" width=\"1024\" height=\"577\" src=\"https:\/\/flevy.com\/blog\/wp-content\/uploads\/2022\/05\/Oxford-Scenario-Planning-Approach-1024x577.png\" alt=\"\" class=\"wp-image-11060\" srcset=\"https:\/\/flevy.com\/blog\/wp-content\/uploads\/2022\/05\/Oxford-Scenario-Planning-Approach-1024x577.png 1024w, https:\/\/flevy.com\/blog\/wp-content\/uploads\/2022\/05\/Oxford-Scenario-Planning-Approach-300x169.png 300w, https:\/\/flevy.com\/blog\/wp-content\/uploads\/2022\/05\/Oxford-Scenario-Planning-Approach-768x433.png 768w, https:\/\/flevy.com\/blog\/wp-content\/uploads\/2022\/05\/Oxford-Scenario-Planning-Approach.png 1335w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/a><\/figure>\n\n\n\n<p>Let\u2019s, now, discuss a couple of the core characteristics in a bit detail.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">1. <strong>Scenario Planning should clearly address the constituents of organizational strategic framework.<\/strong><\/h2>\n\n\n\n<p>The framework upon which the organization&#8217;s strategy is developed is more important in the Scenario Planning process than the strategy itself. &nbsp;This framework entails the underlying assumptions that structure the composition of the strategy\u2014e.g., the time period under deliberation.&nbsp; Other important factors of the framework pertains to the Scenario Planning process, i.e.:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Should the process be cooperative or competitive?<\/li><li>Should it be a one-off initiative to be done during the annual planning cycle?<\/li><li>Should the strategy be kept confidential or made public?<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">2. <strong>A minimum number of potential realistic scenarios should be suggested.<\/strong><\/h2>\n\n\n\n<p>The number of possible plausible scenarios generated through the Oxford Approach to Scenario Planning should be kept to a minimum. <\/p>\n\n\n\n<p>Interested in learning more about the other characteristics of the Oxford Approach to Scenario Planning?  <\/p>\n\n\n\n<p id=\"https:\/\/flevy.com\/browse\/flevypro\/data-valuation-6205\">Interested in learning more about the other steps to valuating Data assets?&nbsp; You&nbsp;can download&nbsp;<a href=\"https:\/\/flevy.com\/browse\/flevypro\/scenario-planning-oxford-approach-6216\">an editable PowerPoint on <strong>Oxford Scenario Planning Approach<\/strong> here<u>&nbsp;<\/u><\/a>on the&nbsp;<a href=\"https:\/\/flevy.com\/browse\">Flevy documents marketplace<\/a>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Do You Find Value in This Framework?<\/strong><\/h2>\n\n\n\n<p>You can download in-depth presentations on this and hundreds of similar business frameworks from the&nbsp;<a href=\"https:\/\/flevy.com\/pro\/library\">FlevyPro Library<\/a>.&nbsp;&nbsp;<a href=\"https:\/\/flevy.com\/pro\">FlevyPro<\/a>&nbsp;is trusted and utilized by 1000s of management consultants and corporate executives. Here\u2019s what some have to say:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>\u201cMy FlevyPro subscription provides me with the most popular frameworks and decks in demand in today\u2019s market.&nbsp; They not only augment my existing consulting and coaching offerings and delivery, but also keep me abreast of the latest trends, inspire new products and service offerings for my practice, and educate me in a fraction of the time and money of other solutions.&nbsp; I strongly recommend FlevyPro to any consultant serious about success.\u201d<\/p><p>\u2013 Bill Branson, Founder at Strategic Business Architects<\/p><\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>\u201cAs a niche strategic consulting firm, Flevy and FlevyPro frameworks and documents are an on-going reference to help us structure our findings and recommendations to our clients as well as improve their clarity, strength, and visual power.&nbsp; For us, it is an invaluable resource to increase our impact and value.\u201d<\/p><p>\u2013 David Coloma, Consulting Area Manager at Cynertia Consulting<\/p><\/blockquote>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>\u201cFlevyPro has been a brilliant resource for me, as an independent growth consultant, to access a vast knowledge bank of presentations to support my work with clients.&nbsp; In terms of RoI, the value I received from the very first presentation I downloaded paid for my subscription many times over!&nbsp; The quality of the decks available allows me to punch way above my weight \u2013 it\u2019s like having the resources of a Big 4 consultancy at your fingertips at a microscopic fraction of the overhead.\u201d<\/p><p>\u2013 Roderick Cameron, Founding Partner at SGFE Ltd<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>Financial uncertainties, unpredictable national and international scenarios, environmental hazards, and technological breakthroughs have taken organizations by a surprise.&nbsp; This has led many leaders to turn to Scenario Planning in order to come up with multiple possible scenarios\u2014instead of planning and devising strategy for a single possible event.&nbsp; Scenarios encompass plausible, but unpredictably important, situations and&hellip;&nbsp;<a href=\"https:\/\/flevy.com\/blog\/scenario-planning-oxford-approach\/\" rel=\"bookmark\"><span class=\"screen-reader-text\">Scenario Planning: Oxford Approach<\/span><\/a><\/p>\n","protected":false},"author":110,"featured_media":11065,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"","neve_meta_content_width":0,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","footnotes":""},"categories":[408,81],"tags":[2942,2902,2,2556,60,2941,27,388,1486,1420],"class_list":["post-11059","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-management-leadership","category-strategy","tag-annual-planning-cycle","tag-forecasting","tag-innovation","tag-planning","tag-scenario-planning","tag-strategic-framework","tag-strategic-planning","tag-strategy-2","tag-systems-thinking","tag-trend-analysis"],"_links":{"self":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/11059","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/users\/110"}],"replies":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/comments?post=11059"}],"version-history":[{"count":7,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/11059\/revisions"}],"predecessor-version":[{"id":11161,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/11059\/revisions\/11161"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media\/11065"}],"wp:attachment":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media?parent=11059"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/categories?post=11059"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/tags?post=11059"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}