About Scenarios and Scenario Planning

One World, Many Futures

The uncertainty that plagues today’s investors became clear to us over the past several years, as clients and friends shared their notion that the world has come unmoored and that business-as-usual is no longer a reliable anchor for making decisions about their investments—or their lives.

The global economy has proven to be remarkably resilient, having adapted and grown in spite of (or because of) dramatic, world-shaking events. So it seems likely that our fundamental social and economic structures will remain intact, at least into the near future. Yet the potential for disruption—sudden or slowly mounting social, economic, and environmental upheavals—has increased to the point that it may make sense to hedge our bets on that front.

On the other hand, we see that rapid advances in technology, along with the interconnection of global civil society, contain a wealth of creative promise that we have just barely begun to glimpse. This could catapult us forward more rapidly, and in different directions, than we have imagined.

With this awareness comes the need to give due consideration to several plausible futures that are beginning to emerge, co-existing in ways that are already visible. It’s important to stress that we do not suggest that any one of these is likely to dominate our future or that they are equally likely—they are archetypal images that we use in a much more nuanced way.

Global Scenario 1: Breakdown, “The Long Emergency”
Social, economic, and/or environmental meltdown, leaving the global economy in partial or total disarray

Global Scenario 2: Muddle Through Down, “Relentless Struggle”
Rolling recessions amid a failure to address the systemic 
causes of social, economic, and environmental decline

Global Scenario 3: Muddle Through Up, “Incremental Progress”
Gradual improvement of key quality-of-life indicators within the status quo framework of political and economic systems

Global Scenario 4: Breakthrough, “Rational Emergence”
Exponential social innovation, new technologies, and the evolution of wisdom/consciousness to deploy them wisely

What do you think? Do any of these seem absolutely impossible to you? Can you imagine that aspects of any and all of these descriptions could come to fruition?

While some who favor one or another of these scenarios may put all their eggs in that one basket, resilient investors know that preparing for each of these possibilities can be done in a healthy and balanced way. You’ll want to at least consider them all and will likely take some steps that will help you adapt to any scenario you see as possible, even the ones that you consider unlikely. This will help you face the future with fresh eyes and provides a framework that lets you move forward with confidence.

See the Future Forecasts section for support in deciding what your future-forecast is, and what type of resilient investor you may be.

About Scenario Planning

While our 4-scenarios continuum offers a handy and relatively simple framework for considering the uncertainties of the future, we want to acknowledge that true “scenario planning” is a much more complex and in-depth undertaking.

Futurists and professional scenario planners look at future trajectories in much finer-grained detail; in particular, they consider a wide range of specific factors that will influence our society, and use both advanced modeling and finely-honed analysis and insight to predict how countless interacting trends could shape our possible futures.

If you’d like to learn more about scenario planning, we recommend the following resources as good places to start:

Peter Schwartz

Schwartz is the author of several seminal books on scenario planning, including the Art of the Long View and Learnings From the Long View. The latter was influential in our thinking about possible futures, especially his basic premise that systemic risk is the major challenge before us, and his close analysis of why this is so.

Peter Schwartz bio

Book: Learnings from the Long View

Jamais Cascio

Cascio is a futurist, and was a key contributor to our way of thinking about scenario planning. His talks and writings are endlessly fascinating and often inspiring.

Cascio’s website
Features lots of in-depth posts on topics related to scenario planning and possible futures.

Video: Bots, Bacteria, and Carbon
A good half-hour introduction to Cascio’s thinking; explores the potential course of planet Earth over the next 50 years, painting a picture of what a sustainable, resilient world could look like. Working with multiple future scenarios, he shows the often-unexpected ways in which the choices we make today will shape the decades to come.

Adam Kahane

Kahane and his consulting partners developed “transfomative scenario planning,” which takes the well-established methodology of adaptive scenario planning—rigorously constructing a set of stories of alternative possible futures—and turns it on its head. It uses scenarios not only to understand and adapt to the future but also to challenge and change it; by offering ways for us to transform the systems of which we are part.

Book: Transformative Scenario Planning. Summary from the authors.

Videos: Transformative Scenario Planning
A half-hour video introduction to Kahane’s approach
A 12-minute version of his overview
An hour-long webinar on transformative scenario planning

Articles and reports assessing risks and our future

Lester Brown founded the Worldwatch Institute in 1974, and since 1984 their annual State of the World reports have tracked global trends, charting both the ways we’ve fallen short and the development of a more sustainable path. See Worldwatch’s Vital Signs website for current trends tracking. In 2001, Brown founded the Earth Policy Institute, with a focus on practical planning for a sustainable future. Now 80, Brown recently announced that EPI would shut down in July 2015, when he retires after the publication of his latest book, The Great Transition. With any luck, their informative website will remain alive.

Book: World on the Edge: How to Prevent Environmental and Economic Collapse. This relatively recent book provides a thorough, concise summary of the world’s environmental crises, as well as a comprehensive set of strategies to address them. Available for purchase, or as a free PDF download.

Globally networked risks and how to respond
This paper by Kirk Helbing, published in Nature in 2013, gives a good overview of the concept of systemic risk, the ways it could provoke unexpected disruption, and some first thoughts about how we might develop a worldview and new kinds of data analysis that could address some of these risks.

NASA/NSF-funded study: industrial civilization at risk of “irreversible collapse”
A new study sponsored by NASA’s Goddard Space Flight Center has highlighted the prospect that global industrial civilisation could collapse in coming decades due to unsustainable resource exploitation and increasingly unequal wealth distribution. Noting that warnings of ‘collapse’ are often seen to be fringe or controversial, the study attempts to make sense of compelling historical data showing that “the process of rise-and-collapse is actually a recurrent cycle found throughout history.” Cases of severe civilisational disruption due to “precipitous collapse – often lasting centuries – have been quite common.” See article.

Humanity’s Deep Future
This fascinating longform article takes a deep dive into the foreseeable and nearly unforeseeable future of earth and humanity, focusing on the work of Nick Bostrom, the director of Oxford’s Future of Humanity Institute, a research collective tasked with pondering the long-term fate of human civilization. Bostrom considers an array of risks on different timescales, from natural mass extinctions via asteroid impact or a supervolcano to technological missteps to our possible interstellar future.