Balanced Scorecard Benchmarking Business Process Reengineering Collaborative Innovation Core Competencies Customer Relationship Management Customer Segmentation Decision Rights Tools Downsizing Growth Strategy Tools Knowledge Management Lean Six Sigma Loyalty Management Mergers and Acquisitions Mission and Vision Statements Online Communities Outsourcing Price Optimization Models Scenario and Contingency Planning Shared Service Centers Strategic Alliances Strategic Planning Supply Chain Management Total Quality Management Voice of the Customer Innovation Related Topics Groupthink Real Options Analysis Scenario Planning Simulation Models Description Contingency Planning allows users to explore, and prepare for, the implications of several alternative futures. This avoids the dangers of single-point forecasts. By surfacing, challenging, and altering beliefs, managers can test their assumptions in a non-threatening environment. Having examined the full range of possible futures, the company can more rapidly modify its strategic direction as actual events unfold. Methodology The key steps in the Contingency Planning process are to: Determine the model?s scope and time frame; Identify the current assumptions and mental models of the individuals who influence these decisions; Create divergent, yet plausible, scenarios with underlying assumptions of how the future might evolve; Test the impact of key variables in each scenario; Develop action plans based on either the solutions that play most robustly across scenarios, or the most desirable outcome toward which a company can direct its efforts; Monitor events as they unfold to test the corporate direction; Be prepared to modify it as required. Common Uses Through the use of the Contingency Planning methodology, a company can: Achieve a higher degree of organizational learning; Surface and challenge both implicit and widely held beliefs and assumptions about the business and its likely future; Identify key levers that can impact the company?s future; Turn long-range planning into a vital, shared experience; Develop a distinctive, farsighted view of the future; Incorporate globalization and change management into strategic analysis; Establish plans to respond purposefully to changes in the environment. Selected References Barnes, James C., and Philip Jan Rothstein. A Guide to Business Continuity Planning. John Wiley & Sons, 2001. Bood, Robert, and Theo Postma. "Strategic Learning with Scenarios." European Management Journal, December 1997, pp. 633-647. Fahey, Liam, and Robert M. Randall. Learning from the Future: Competitive Foresight Scenarios. John Wiley & Sons, 1997. Janis, Irving L., Groupthink: Psychological Studies of Policy Decisions. Houghton Mifflin Company, 1986. Mason, David H. "Scenario-Based Planning: Decision Model for the Learning Organization." Planning Review, March/April 1994, pp. 6-11. Ringland, Gill. Scenario Planning: Managing for the Future. John Wiley & Sons, 1998. Schoemaker, Paul J.H. "Scenario Planning: A Tool for Strategic Thinking." Sloan Management Review, Winter 1995, pp. 25-40. Schriefer, Audrey. "Getting the Most Out of Scenarios: Advice from the Experts." Planning Review, September/October 1995, pp. 33-35. Schwartz, Peter. The Art of the Long View: Paths to Strategic Insight for Yourself & Your Company. Doubleday, 1996. Van Der Heijden, Kees. Scenarios: The Art of Strategic Conversation. John Wiley & Sons, 1996. Wack, Pierre. "Scenarios: Shooting the Rapids." Harvard Business Review, November/December 1985, pp. 139-150. Wack, Pierre. "Scenarios: The Uncharted Waters Ahead." Harvard Business Review, September/October 1985, pp. 72-89.