Scenario Planning

Overview

Scenario planning accepts that certain futures are genuinely unknowable and prepares for several of them rather than betting on one forecast. Pierre Wack formalized this at Shell in the early 1970s; Shell's pre-built Scenario B let it survive the 1973 oil shock while competitors were unprepared. Schwartz: "The goal is not to predict the future but to make decisions that are robust across a variety of possible futures." (The Art of the Long View, 1991, p. 9.)

Composition: probabilistic-thinking before (base-rate grounding); second-order-thinking inside each scenario (chain reactions); inversion alongside (stress-test current strategy).

When to Use

Apply when: decision is large and hard to reverse; 3+ year horizon with a genuinely bi-directional driver; non-consensus outcome would be catastrophic; macro forces (geopolitics, regulation, technology) are pivotal; a bet hinges on whether AI capex / AI valuations sustain or correct, or on how AI adoption and chip-supply policy unfold; or you are weighing how deep an AI-vendor commitment or multi-year enterprise AI-adoption bet to make while pricing, compute supply, and vendor viability are unsettled.

When NOT to use: Tactical/short-reversibility decisions; single measurable driver (use sensitivity analysis); team lacks authority to change strategy; as a substitute for execution.

Coaching Novices (Adaptive Front Door)

• Engine mode: user has a concrete decision → run The Process directly.
• Coach mode: user is unfamiliar or has no concrete case → guide step by step.