Scenarios Planning — An Ancient Art
The origins of scenario planning are ancient. Chinese military strategist Sun Tzu in "The Art of War" and Julius Caesar in "Commentaries on the Gallic War" both talk about the importance of considering unexpected possibilities and making contingencies for them. But scenarios really came into fashion in the 1940s and 1960s when the Pentagon and the Kremlin used early computers and game theory to plot various forms of Mutual Assured Destruction with nuclear weapons.
The big move to the real world came in the '70s and '80s when the Shell oil company did considerable work on how to construct scenarios and how to plan strategy based on them. Famously, Shell spent a reported $15 million and months of senior management time in the 1980s — a huge investment at that time — working on 13 different scenarios. Eleven of those scenarios proved useless, since they didn't remotely happen. But two of them proved enormously helpful. One was that the price of oil would rise to $100 a barrel, and the second was that there would be a war in the Persian Gulf. As a result, the company kept large reserves of oil and set up exploration sites in Mexico and other places that seemed enormously difficult and expensive compared to the Gulf.
— Bernard Ross
