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Decision scenarios structure the future into predetermined and uncertain elements and aim to transform the thinking of managers during times of change and uncertainty. In the aftermath of the 1973-74 oil shock and in the midst of a serious recession, for example, managers at Royal Dutch/Shell turned their attention to the short term. Planners responded to their concerns in 1975 by analyzing the predetermined elements of change and developing two medium-term scenarios. By presenting managers with alternative ways of seeing the world, decision scenarios enable them to anticipate and understand risk and to discover new strategic options.

Traditional forecasting techniques, which rest on the assumption that tomorrow's world will be much like today's, are inadequate in a fluid and turbulent business environment. When forecasts made by Royal Dutch/Shell in the late 1960s signaled major disruptions in the world oil market, company planners realized they needed a more realistic way to think about the future. Beginning in 1971, the company decided to develop a series of scenarios to explore the future business environment. By listening to planners' analysis, Shell's management was prepared for the 1973 oil crisis. The power of scenarios becomes evident when the world changes. McKinsey Award Winner.