Futures

Enhancing Scenario Planning with Generative AI: Overcoming Traditional Limitations, (from page 20231209.)

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Summary

Businesses are adopting strategic foresight methodologies, such as scenario planning, to navigate uncertainties from climate change, global conflicts, and technological advancements. However, traditional scenario planning has limitations, including difficulty in identifying relevant trends, constraints on the number of scenarios analyzed, and inadequate guidance for managing multiple divergent scenarios. Generative AI presents a solution by enabling organizations to explore a wider range of options than conventional methods allow. This article discusses how generative AI can enhance scenario planning and includes a simulation example conducted by the authors.

Signals

name description change 10-year driving-force relevancy
Increased Use of Strategic Foresight Businesses are using scenario planning to navigate uncertainties from climate change and conflicts. Shift from traditional planning methods to strategic foresight to better understand uncertainties. In 10 years, businesses will rely on advanced foresight methodologies for strategic decision-making. The growing complexity of global issues requires organizations to adapt and anticipate changes effectively. 4
Generative AI in Scenario Planning Generative AI enhances scenario planning by generating more diverse options for organizations. Transition from limited scenario generation to a broader range of possibilities with AI integration. In a decade, generative AI will be a standard tool in strategic planning across industries. The need for innovative solutions in planning processes drives the adoption of AI technologies. 5
Shortcomings of Traditional Scenario Planning Traditional methods struggle to identify relevant trends and assess multiple divergent scenarios. Move from traditional scenario planning to more adaptive and comprehensive methodologies. Future scenario planning will be more agile, incorporating real-time data and diverse perspectives. The fast-paced changes in technology and the environment necessitate more dynamic planning approaches. 3

Concerns

name description relevancy
Inadequacy of Traditional Scenario Planning Traditional scenario planning fails to identify relevant trends and adapt to multiple uncertainties, risking outdated strategies. 4
Dependency on Generative AI Over-reliance on Generative AI for scenario planning may lead to unexpected biases or oversights in strategic decision-making. 3
Escalating Organizational Uncertainties Climate change, global conflicts, and tech advancements are increasing uncertainties, which could destabilize businesses if not effectively managed. 5
Limitations in Scenario Consideration Traditional methods limit the number of scenarios explored in depth, which may overlook critical future events. 4
Divided Preparedness for Divergent Scenarios Lack of direction for preparing for multiple highly divergent scenarios simultaneously can leave organizations vulnerable. 4

Behaviors

name description relevancy
Strategic Foresight Utilization Organizations are adopting strategic foresight methodologies to manage uncertainties related to climate change and technology. 4
Enhanced Scenario Planning with AI Businesses are integrating Generative AI to improve scenario planning by generating more options and addressing traditional limitations. 5
Emphasis on Organizational Learning There is a growing focus on leadership training and skill development for effective strategy planning and execution. 4
Proactive Uncertainty Management Companies are proactively addressing uncertainties by anticipating future scenarios rather than reacting to them. 5
Integration of Simulations in Strategy Development Use of simulations to test and refine strategies is becoming more common in organizational planning. 4

Technologies

name description relevancy
Generative AI A technology that assists organizations in generating and considering numerous options for scenario planning, overcoming traditional methodologies’ limitations. 5

Issues

name description relevancy
Climate Change Uncertainties Organizations are facing growing uncertainties related to climate change that require enhanced strategic foresight. 5
Global Conflicts Impact Escalating global conflicts are influencing organizational strategies, necessitating better scenario planning approaches. 4
Technological Advancements Rapid technological changes are creating new challenges and opportunities for businesses in their strategic planning processes. 4
Limitations of Traditional Scenario Planning Current scenario planning methods are inadequate for addressing multiple divergent futures effectively. 5
Generative AI in Strategic Planning The integration of generative AI can significantly improve the scenario planning process by generating more options. 5