“The point of scenario-planning is to help us suspend our disbelief in all the futures: to allow us to think that any one of them might take place. Then we can prepare for what we don’t think is going to happen.”
How do you take the long view to prepare for the future? Do you try to predict what’s most likely, then prepare for it? If so, you’re doing it wrong.
Schwartz instead argues for scenario-based reasoning. The core of the idea is that the world is unpredictable: since we cannot know for sure what will happen, it is foolish to prepare for only one future. Instead, you come up with several plausible scenarios of how the future might turn out, and then look for solutions and plans that allow us to prepare for all of them. I would call this prediction using confidence intervals, not point estimates, but the point is the same. By using a point estimate (or single scenario), we blind ourselves to other possible outcomes, and neglect ideas that might have served us well in an uncertain and unpredictable world.
By using stories, we can make these futures seem real, helping us truly change and deepen our mental models of the world and take a long view. Typically, three scenarios are enough to capture three possible types of future: more of the same, but better; worse; and different but better. Of course, there are infinite possible futures, but these three classes generally help us prepare for them.
Though pretty simple, I actually think the method is pretty compelling, and the book is a well-written introduction to it. Among other things, I think Schwartz’s method helps provide a common language for discussing the future, something often not accounted for. As Greece negotiates with the euro, for example, I think both could benefit by having some scenarios of what the future could look like.
It isn’t a perfect method: there were a few points I found unconvincing, particularly that you should never probability-weight scenarios. If you come up with three, one of which has a 90% likelihood of happening, should you really prefer a solution that works better in the other two? I’m happy to agree you should consider all three, and if a solution works for all then great, but the hard decisions are when solutions are good in some scenarios, and bad in others. Still, a powerful method that deserves broader application.
Speaking of the future, having had my PhD viva last week, I am finally left with a bit more free time, and so hopefully can start posting reviews more regularly again. Look forward to it!