Scenario Planning

Fall 2005

Scenario Planning


Firms that are doing the “best” – enjoying strong workload, growth, profitability, and a flow of challenging projects – do so, by plan or accident or the gut feel of a leader, by being in alignment with growth markets. When a market is growing, the firms that serve that market will grow. A rising tide lifts all ships. The question …

How do you identify growth markets?

Typically, from trends. If we identify a trend – e.g. “aging population” – then markets serving that trend emerge. Small semi-retirement communities for Boomers, ocean cruises, golf, Big-Box retail, hiking-biking trails, university graduate programs, organic produce, health foods, more fish, pharmaceuticals, plastic surgery.

Are some trends bigger than others?

Some trends, often referred to as “Mega-Trends,” affect a broader segment of our population and planet. Mega-Trends are more pervasive, but also seem less visible. They’re rarely reported in the mass media. Sometimes people have difficulty projecting outcomes from early points of trends or mega-trends … so they don’t pay much attention until they solidify. Sometimes it’s news no one wants to hear.

Some Mega-Trends?

A few years ago, we were asked to interview CEOs of several firms, executives of several professional societies, and other industry consultants. Only one consultant had a clear vision of some coming Mega-Trends. The one he cited …


The world is running out of fresh water. When we go to the sink and turn on the tap, it flows. It always flows. In the words of Alfred E. Neuman, “What, me worry?”

When media report India and Pakistan conflicts over Kashmir, no one asks, “Why Kashmir? Who cares? What do they have that anyone wants?” It’s the Himalayan headlands; large rivers flow through it. They have water. Water tables in India and Pakistan fall 1.5 meters/year, from over-pumping. The concern? Feeding billions.

Two main rivers divide China into north, central and south: the Yalu and the Yangtse. For over 15 years, the Yalu’s been dry for at least a month. Crop failures have increased. Six years ago, they imported food for the first time … ever. The trend showed a 25-year straight-line decline in food production that simply crossed zero, to import. Because of its size, when would the rest of the world not have enough food to sell them? 2016. Last year, their imports equaled Canada’s entire harvest!

Closer to home, the Ogallala aquifer, under the Midwest, is a third its original size. And – the U.S. now imports more food than it exports. Another Mega-Trend …

Peak Oil.

This term, coined by Dr. M. King Hubbert, defines the top of a bell curve for an oil well, an oil field – with new wells coming on-line as older ones taper, a nation, or even the world. The U.S. Peaked, as Hubbert predicted in 1956, in 1970. Last year, Saudi Arabia indicated that it peaked in 2000. According to Matt Simmons, a leading oil industry consultant, “When Saudi Peaks, the world has Peaked.”

Oil won’t run out. The Peak is the halfway point. Future production will be equal to or less, each day. Yet – global demand, per person and in numbers of people – is rising. If water at an oasis has been supporting 200 people, and if a few couples have children, and if the water diminishes, what happens? What’s the oil parallel?

Oil prices will rise. As they do, some users (demand) will cut back. When gas hits $7-$10/gallon – perhaps in three to five years – what changes in travel? When farmers can’t afford oil-based fertilizers and pesticides – what results are likely?

Scenario Planning

In reading a flow of trends literature, and in speaking with others who stay atop of trends professionally, everyone is seeing what they call “convergences.” It’s a bit like the “Perfect Storm” movie, in which three storm centers came together; the outcome was an intensified situation. The two above are huge, concurrent, and already unfolding. Not in “coming generations.” Now. And in the next few years.

The question then . . .

If these trends are true, and if these trends continue,
what markets may fade or grow; what’s the impact on our firm?

Even more important, because we’re problem solvers, try the corollary . . .

What opportunities lie within these trends?

Pull your firm’s brain trust together. Perhaps a 2-hour meeting a month, with readings in between. (For Peak Oil: search the web; see the CD “The End of Suburbia;” try Matt Savinar’s web site; read Matt Simmons book, etc.) What are the trend’s impacts? What markets may fade? What markets might grow? Create a picture – a scenario – of a likely future. With the enormous size and intensity of Mega-Trends, it’s the most vital thing you can do to bolster your firm’s future.


Somehow, some people didn’t get August’s “Stu’s News.” Go to, and click on “Stu’s News”.  All past issues are posted.

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