THE PATHFINDER’S TALE
This book is about freedom. In western societies, people are ostensibly free, but they feel constrained by the unpredictability of events. Every year, every decade, we are surprised by social or technological upheavals that appear suddenly, surprisingly.

How can people, businesses, and institutions plan for the future when they do not know what tomorrow will bring? A deep and realistic confidence is built on insight into the possible outcomes of our choices. In this unpredictable context, freedom is the ability to act both with confidence and a full knowledge of uncertainty.

To act with confidence, one must be willing to look ahead and consider uncertainties: "What challenges could the world present me? How might others respond to my actions?" Rather than asking such questions, too many people react to uncertainty with denial.

They take an unconsciously deterministic view of events. They take it for granted that some things just can’t and won’t happen; for example, "oil prices won’t collapse," or "the Cold War can’t ever end." Not having tried to foresee surprising events, they are at a loss for ways to act when upheaval continues.

They create blind spots for themselves.Scenarios are a tool for helping us to take a long view in a world of great uncertainty. The name comes from the theatrical term "scenario"- the script for a film or a play. Scenarios are stories about the way the world might turn out tomorrow, stories that can help us recognize and adapt to changing aspects of our present environment. They form a method for articulating the different pathways that might exist for you tomorrow, and finding your appropriate movements down each of those possible paths. Scenario planning is about making choices today with an understanding of how they might turn out.

In this context the precise definition of "scenario" is: a tool for ordering one’s perceptions about alternative future environments in which one’s decisions might be played out. Alternatively: a set of organised ways for us to dream effectively about our own future. Concretely, they resemble a set of stories, either written out or often spoken. However, these stories are built around constructed "plots" that make the significant elements of the world scene stand out boldly. This approach is more a disciplined way of thinking than a formal methodology.

I’ve used scenarios with some of the world’s largest businesses and government institutions, in starting a small business, and I’ve used them to make personal decisions about my diet and health. You could use scenarios to plan a small business, to choose an education, to look for a job, to judge an investment, or even to contemplate marriage. Often, scenarios can help people make better decisions - usually difficult decisions - that they would otherwise miss or deny.

Consider, for example, the crisis overtaking the advertising industry. Beginning in the early 1980’s, anyone could have looked ahead and seen the growing popularity of new communication technologies: cable, TV, videocassettes, and computer-based media such as electronic mail and the Internet. This technological change was an irrevocable force, certain to shock the media industries by draining audiences - and then ad revenues - from traditional network television. No one could say exactly when the shock would come, or how it would play out, but it was clear that, within a matter of years, ad agencies would find their business either radically changed, or severely diminished - as had the U.S steel industry in the early eighties, for example.

While the changes were certain, their exact form was unclear. How strong would be the influence of companies such as Disney, which refused to allow advertising on pre-recorded video tapes? Which consumers would be most willing to use new forms of media first? What regulatory pressure would prevent telephone companies from entering the business of distributing film and television by wire? What forms could advertising take ten years hence, and how could agencies make money at it? What would be the effect of suddenly popular new communications media, such as fax machines? A set of scenarios would have described the range of worlds that might emerge by looking carefully at important elements of the world in the early 1980s.

In 1987, the shock began to hit. Ad agency profits began to decline, people found themselves laid off, and more and more agencies had to haggle over fees with their clients. Most ad people assumed the crisis was temporary; that it would be followed by a new status quo. Today, ad agencies are in yet deeper economic trouble, still hoping for a turnaround, and still refusing to look at the opportunities – as well as the pitfalls - in the rise of new technology. I know this because, along with several other people, I began work in the late 1980s on a set of scenarios about the effect of new technologies on the media business. We found clients from every conceivable segment: a broadcast network, a telephone company, a movie production studio, and a consumer products company that place major advertisements. All but one of the advertising agencies we invited to join us in the study of its own future weren’t interested. To judge from our conversations with them, they were afraid of what they might learn, as if the cost of ignorance were smaller.

Scenarios are not predictions. It is simply not possible to predict the future with certainty. An old Arab proverb says that, "he who predicts the future lies even if he tells the truth." Rather, scenarios are vehicles for helping people learn. Unlike traditional business forecasting or market research, they present alternative images of the future; they do not merely extrapolate the trend of the present. One common trend, for instance, is the U.S. birthrate. In the early 1970s, it hovered around 3 million births per year; forecasters at the U.S. Census Bureau projected that this "trend" would continue forever. Schools, which had been rushed into construction during the baby boom of the fifties and early sixties, were now closed down and sold. Policy makers did not consider that the birthrate might rise again suddenly. But a scenario might have considered the likelihood that original baby boom children, reaching their late thirties, would suddenly have children of their own. In 1979, the U.S. birthrate began to rise; it is now over the 4 million per annum of the fifties. Demographers also failed to anticipate that immigration would accelerate. To keep up with the demand, the state of California (which had been closing schools in the late 1970s) must build a classroom every day for the next seven years.

Often, managers prefer the illusion of certainty to understanding risks and realities. If the forecaster fails in his task, how can the manager be blamed? But in the long run, this denial of uncertainty sets the stage for surprises, shattering the manager’s confidence in his or her ability to look ahead. Scenarios allow a manager to say, "I am prepared for what ever happens." It is this ability to act with a knowledgeable sense of risk and reward that separates both the business executive and the wise individual from a bureaucrat or a gambler.