Scenario Planning Versus Demanding Purported Certainty

How to think about the future, and the past? Some proclaim “certainty” essential and demand “proof” with confidence intervals at .05% or above. Others suggest we need more discussions about “scenario” instead of communicating about probabilities.  Outcomes related to Father Andrew’s car accident are used in a July 20, 2017 article in the NEJM to provide a powerful example of the value of describing and thinking about scenarios instead of communicating about risk probabilities. The article is Schwarze ML, Taylor LJ. Managing Uncertainty – Harnessing the Power of Scenario Planning. N Engl J Med. 2017 Jul 20;377(3):206-208. doi: 10.1056/NEJMp1704149.

The Schwarze and Taylor article includes a useful reminder of some of the eye opening scenario planning papers that resulted from people at “big oil” thinking about various possibilities.  “In the turbulent 1970s, Pierre Wack, an economist for Shell Oil, popularized “scenario planning” to translate vast probabilistic information and facilitate strategic decisions.3,4 Rather than emphasizing precise prognostication, this technique generates multiple plausible futures. Each scenario helps decision makers visualize what might happen under various sets of assumptions — discovery of new oil fields, say, or turmoil in the Middle East — challenging their view of reality. By considering a range of scenarios, Shell’s managers could perceive how interrelated events influenced longer-term outcomes and could anticipate major changes.”

The articles are:

Wack P. Uncharted waters ahead. Harvard Business Review, September 1985 (https://hbr.org/1985/09/scenarios-uncharted-waters-ahead).

Wack P. Shooting the rapids. Harvard Business Review, November 1985 (https://hbr.org/1985/11/scenarios-shooting-the-rapids).

A take away? Parties and persons involved in mass tort claims might benefit from more scenario planning.

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About Kirk

Since becoming a lawyer in 1983, Kirk’s over 30 years of practice have focused on advising a wide range of corporations, associations, and individuals (as both plaintiffs and defendants) on both tort and commercial law issues centered around “mass torts.”

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