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15
Scenario planning: an
alternative way of dealing
with uncertainty
Introduction
Scenario planning is an alternative way of dealing with uncertainty than
that encapsulated in decision analysis. This chapter outlines the conceptual
approach, provides a step-by-step guide to scenario construction
and shows how decisions can be evaluated against scenarios of plausible
futures. Finally, we show how scenario planning can be combined
with the SMART approach to decision making with multiple objectives,
which we detailed in Chapter 3.
First, consider the following quotation from an article in the magazine
Newsweek which was published on 28 January 1991. The article was written
by a journalist who was analyzing the reasons for US unpreparedness
for Saddam Hussein’s invasion of Kuwait:
In the days leading up to the invasion, the intelligence agencies sent President
Bush a list of predictions. The list was arranged in order of probability. ‘None
had as their first choice the prediction that Saddam Hussein would attack,’
says one intelligence operative who saw the reports. Prediction No 1 was
that Saddam was bluffing. Prediction No 2 was that he might seize part of
the Rumaila oilfield that straddles Iraq and Kuwait and possibly Warba and
Bubiyan islands, two mudflats blocking Iraq’s access to the Persian Gulf. It
was assumed that he would pull back from Kuwait once the islands were
secured. ‘The line we kept hearing around here was that he has just massed
there along the Kuwait border to drive up the price of oil,’ recalls one senior
Pentagon officer. ‘If people were saying he is for real and he is going to
invade, it was not briefed to us as definite.’
Several sounder voices did predict an invasion but they went unheard.
One midlevel Mideast analyst at the CIA got it right, but his warning ‘got
lost’ in the momentum of the opposing consensus. Marine Corps Officers,
scanning satellite photos that showed Iraqi air-defence units, tanks and
artillery deployed forward at the Kuwait border surmised that this could
only mean an invasion, but they kept their silence because of bureaucratic