Scenario Planning for Strategic Planning & Innovation

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Wharton (2012) describes scenario planning as the intersection between strategy and innovation, where proactive strategic thinking aims at uncovering potential futures and changes that may result in opportunities for innovation. Parayre (n.d.) as cited in Wharton (2012) describes it as “Innovation opportunities are the result of changes or shocks in the environment […]. The scenarios become […] ‘platforms for ideation’ […]. They provide a clarity that helps you to anticipate changes and possibilities.” 

Athuraliya (2022) states scenario planning segregates knowledge into two areas: (1) Things we know, and (2) Things we are not sure about. The scenarios provide opportunities to look into what could happen in the future, but they do not offer the strategies necessary for effective management of those potential futures.

For this reason, outside help from customers, suppliers, journalists, politicians, etc., are key in identifying patterns and uncovering uncertainties with the ultimate purpose of provoking strategic thinking (Athuraliya, 2022). 

Scenario planning involves strategic thinking that incorporates analysis of various forces in efforts of identifying solutions to potentially negative impacts, as well as determining the level of innovation and social impact for change (Athuraliya, 2022). Innovation is not only about the latest technology or eye-catching gadgets, but it may require organizations to reinvent themselves and their business models as a strategic response to the potential futures identified through scenario planning (Wharton, 2012). 



In 1972, Atari was founded as one of the first companies in the video-games industry. It had great success with “Pong,” their first arcade game, and later with the Atari 2600 console as the company attempted to standardize outputs and take advantage of television (TV) screens already in existence in every home. These were short-lived innovative times, and along with the video-game market crash of 1983, Atari was faced with market competition and saturation from personal computers. The company continued to produce low-quality games and launched a title related to the E.T. (extraterrestrial) movie without much study to take advantage of the movie’s success (Santo, 2019). Had Atari performed scenario planning, potential futures would have surfaced related to the industry crash, market saturation, as well as insight into the types of games their customers were interested in instead of rushing into decision-making without proper analysis of the innovations themselves, industry trends, and customer preferences.   





References 
Athuraliya, A. (2022). A step-by-step guide to scenario planning. Professional Academy. https://www.professionalacademy.com/blogs/a-step-by-step-guide-to-scenario-planning/

Santo, B. (2019, January 3). The consumer electronics hall of fame: Atari 2600. IEEE Spectrum. https://spectrum.ieee.org/the-consumer-electronics-hall-of-fame-atari-2600 

Wharton Executive Education. (2012). Scenario planning: Where strategy and innovation intersect. https://executiveeducation.wharton.upenn.edu/thought-leadership/wharton-at-work/2012/05/scenario-planning/

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