How Many Scenarios are Correct?

I prefer using scenario type thinking in my work versus plotting these maps. I think creating a scenario; a story is much more useful and memorable to all concerned parties. I have always believed in the power of three. A few of these outlines are below:

Pre-Purchase Purchase After Purchase
Expect to See Like to See Love to See
Worst Case Most Likely Best Case
Short Term Intermediate Long Term

 

I can go on, but you get the idea. You take the description that you can explain best and determine the other stories around it. You will not always choose a middle ground to start. You start where you can tell the best story. The trick is to tell the story with enough definable content that you can distinguish the difference.

In re-reading Scenario Planning: Managing for the Future the other day, it may have caused me to differ on this thinking. In the book,  they ask the question, How Many Scenarios?

An excerpt from the book:

Shell had experimented with four, three and two scenarios for strategic planning.

What it had found was that:

  • Four scenarios encourage divergent thinking and are useful for creating vision
  • Three scenarios lead to the expectation that one is “the forecast”‘
  • Two scenarios allowed two very distinct (not necessarily “low” or “bad* vs “good” or “high”) to be developed.

This approach is very different from the baseline, high, low” approach, in that it concentrates on creating credible, but different, worlds for each scenario.

I struggle with this concept for every scenario, but it certainly has some value. As I think about the four scenarios, it certainly stops me from classifying and being more open and as they say encourage divergent thinking. Three is certainly limiting.

However, three scenarios can also serve a purpose when we move away from the strict sense of the word scenario and use it in a way to forecast. Painting other scenarios around a forecast is entirely acceptable if that is our intent.

What are some of your thoughts? Should we even consider 2 scenarios? Is there a time that we would never use 2, 3 or 4? Is there a perfect number?

How would you re-phrase one of the rows of three to four in the table above?

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