Scenario Planning or SWOT Analysis

Scenario planning and SWOT analysis should be viewed as complementary with each process informing the other. The environmental assessment attempts to define the current state of reality and the organization’s place therein. It is oriented in the past because that is the data that’s most readily available. When combined with an assessment of the organization’s strengths and weaknesses, it allows the planner to make certain assumptions about opportunities and threats and, more importantly, about the ability of the organization to capitalize on the former and proactively prepare a response to the latter. SWOT works best when the trend lines actually predict the future. It does not work so well when faced with disruptive innovation, regulatory upheaval, or unexpected competitive actions.

Scenario planning processes open the mind to alternative futures not predicted by trend lines. It enables the planning team to reassess assumptions about strengths and weakness by asking how the organization would actually deal with the unexpected. Management strengths in a stable environment may well be weaknesses in a scenario characterized by instability and change. Scenario planning also allows the planner to reassess opportunities and threats. What if personalized, genomic-driven medicine becomes the standard in the next ten years, for instance? If management believes a scenario is reasonably likely to occur, it can make an informed choice to allocate resources today in order to prepare for that eventuality tomorrow.

It is highly unlikely that any of the scenarios considered will come to pass exactly as planned, but that’s OK. The process itself is where the benefit is derived, by giving the planning team different ways of looking at the organization and its future.