People involved in Foresight and Futures Studies acknowledge that the future is not a fixed unknown in the horizon waiting to be discovered. It is fluid, constantly affected and influenced by peoples’ and nations’ actions, changing values and preferences. Indeed many variables such as environmental degradation, changing technologies and fickle and fluctuating consumer preferences would all need to be taken into account when trying to get a glimpse at the future. But no sooner than that glimpse has been had, than the future is changed again! Also, it is feasible that trying to forecast the future is subject to the same phenomenon as the Heisenberg Uncertainty Principle. The more you may be correct about forecasting one aspect, the more you may be totally off with regard to another.
So what is the moral of the story for business planning? That on one hand, business plans cannot just be an extrapolation of the previous years’ by a small factor into the following year because the future may be heading in a completely different direction. On the other hand, that business plans cannot be based on forecasting far into the future and attempting to rigidly stick to them – another common occurrence. This is where scenario analysis comes into its own. Scenario analysis acknowledges that there are a number of forces that may be shaping the long term future, and that different combinations of these could lead to different outcomes. From a planning point of view, it is therefore important to get a fuller understanding of the different probable scenarios of the future and to take these into account in present day strategic planning and decision making.
