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Why four? What is best practice?
The scenario approach is very flexible. It can also be use to exam
sensitivity/risk, what ifs, competitors' responses, etc., any time
you want to simulate outcomes and build leaders skills. When using the scenario approach for formulate strategy, preparing four scenarios is best practice.
Why four scenarios? Extensive work by Royal Dutch Shell planners in the 1970s and 1980s concluded four scenarios increases the chances of innovation when you begin scenario planning:
- One scenario is just a forecast.
- Two are a decision between two options, do the math.
- Three scenarios compare best and worst case to the middle road. So far, you are not getting people outside their comfort zone.
- Four scenarios do that - it gets you to think away from your baseline.
The art is to identify the four you want to consider. In my experience,
more than four scenarios starts to dilute the focus. You start with
four, abandon a non-starter as you learn more, and then add another
scenario.
Scenarios
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Scenario steps 
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