The dynamic nature of health care and human service markets poses challenges for leaders and teams engaged in
strategic planning. Identifying the residual uncertainty-those external unknowns present after market research and
due diligence-allows an understanding of the level of risk in strategic decision-making. Scenario planning can
help to improve the success of strategies, particularly in highly dynamic or turbulent markets.
Michael Porter in Competitive Strategy identified scenarios as a useful tool that provides a "discrete,
internally consistent view of how the world will look in the future which can be bound to the probable range of
outcomes"1 . Having developed scenarios, the organization can examine its position, assessing which
scenario it will bet on or how the impact of each scenario will differentially drive organizational behavior and
strategy. The organization may try to impact the outcome of the varying scenarios or maintain flexibility. The
organization can also identify the events which signal one or another scenario is occurring.
In Scenario Planning: Managing for the Future2, Gill Ringland defines scenario planning as
"the part of strategic planning which relates to the tools and technologies for managing the uncertainties of the
future". Ringland suggests several different uses for scenarios:
Sensitivity / Risk Assessment
Strategy Evaluation
Strategy Development
Skill Development
The first two approaches are more analytic, while the later two approaches are used for synthesis of strategy.
Scenarios are not an end in themselves, but a management tool to enhance decision-making. Each of the four
approaches includes specific applications, steps and evaluation.
Scenario planning can be a component of the strategic planning process. The role of scenarios is incorporated in
the consideration of strategic options and intent.
The following schematic illustrates the strategic planning process with scenario planning considered during the
strategic options and intent phase.3
The following table illustrates the application, steps and evaluation of the different uses of scenario planning:
1 Source: Porter, Michael. Competitive Strategy. New York: Free Press, 1980, pp. 234-235. 2 Source: Ringland, Gill. Scenario Planning:. Managing for the Future. New York: John Wiley,
1998, Chapter Five. 3 Source: Ringland, Gill. Scenario Planning: Managing for the Future. New York: John Wiley,
1998, Page 129.
