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February 2016 IMA Dubai-UAE Chapter Event - Scenario Planning

By Gulshat Uspanova posted 04-15-2016 06:52 AM

  

Scenario Planning

The February 19th, 2016 event was the second event was in collaboration with Strathclyde Business School UAE. The first one was on Shareholders’ Value maximization in January 2016. And again the chosen topic had a good response rate from IMA members’ community as attracted more than 60 attendees.

The professor Dr. Ronald Michael Bradfield from Strachlyde Business School, presented a brief introduction to a very interesting technique in predicting futures – Scenario planning.

What is it that a company must undertake to forecast its activities better? Average companies when preparing long term plans, just add 5-10% to the revenues and costs and always tend to show the straight line growth for the next 5-10 years. But the history then shows that forecasts were never correct. Nowadays the organizations must not foresee the future as a one way outcome, it should consider at least three-four scenarios depending not only on internal, but also on external factors – new inventions, environmental impacts, political, social religious risks, technological advancements, demographical situation and gender shifts in professions, and so on.

The history shows that businesses collapsed because they did not notice the changes in the technologies, the new trends and innovations that changed the world over time. The experience of those companies that did not foresee the change coming and did not adopt to it, may potentially lead to the death of the business. The examples are many – Nokia that missed the development of the digital phone technology, IBM that underestimated the price and success of a computer, or Kodak that missed to notice the development of the digital camera, telecommunication companies that were "surprised" by development of VOIP technology...  

The scenario planning studies are several months’ projects where every possible aspect that may influence the business and overall performance of the company should be taken into account, but the company must take a conscious decision to invest into such a tedious activity of research and continuous monitoring of risk factors that may help develop a better strategy for survival in the world of uncertainty.

Businesses come and go, some businesses succeed and grow rapidly, and another ones disappear. The history witnesses that if business ignores the changing tendencies in internal, industry, global political environment, then its future is in danger. Each organization should think long term, think outside-in, remember the past and develop multiple scenarios and identify the unintended consequences to avoid the negative ones. Scenario planning is a very effective tool to ask questions, to dig dipper in order to understand the perspective for growing the business in the future and make respective successful business decisions.

The members have highly evaluated the topic and the speaker. Lots of questions were raised in the hot Question and answers sessions, showing great interest raised to the subject.

 

 

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