Successful Scenario Planning

Posted: February 9, 2015

British Airways Airbus A380 (Creative Commons License). Retrieved February 2nd, 2015 from https://www.flickr.com/photos/24874528@N04/9384083282/.

British Airways Airbus A380 (Creative Commons License) Retrieved February 2nd, 2015 from http://www.flickr.com/photos/24874528@N04/9384083282

In 1993, British Airways was one of the largest and most profitable international passenger airline companies, and remains so more than a decade later. This continued success is in large part due to the introduction of scenario planning by DeAnne Julius, British Airway’s Chief Economist in 1994.

Julius proposed an experiment to the company’s Chairman’s Committee to see if scenario planning was suitable for use by airline: the incorporation of scenario planning into the British Airways annual business plan of April 1995 (Moyer, 1996).

The experiment took place in two phases. The initial phase was led by Julius, who directed a diverse development team comprised of staffers from multiple departments (Marketing, Corporate Strategy, & Government Affairs) and a ‘Halo Group’ of senior directors and senior managers who provided advice and feedback. In the first phase, the team focused on the determination of what the most significant external issues facing British Airways. Eleven significant issues were selected for further research in order to determine probable outcomes for each. Stories were written about the probably evolution of the issues over a ten year horizon (Moyer, 1996).
Phase two of the experiment was lead by Rod Muddle, the Head of Planning for British Airways in 1994. Scenario workshops were held by different groups within the airline (Engineering, Marketing, Corporate Strategy, Capacity Management, Cargo, etc.). Often the results from workshop were used to set the vision for another workshop (for example Engineering output set the stage for a Capacity Management scenario workshop).

The process was a long one, taking 7 months and over 200 man-years to complete. Challenges faced by the team included difficulty in building a database for the data model, in part due to difficulty acquiring and then modeling historical data, and the amount of on-going commitment required by the process was underestimated. In the end, it was found that workshops with 7-10 participants were most successful, with optimal participation by group members.

The experiment was a successful one. The scenarios developed were incorporated into the 1995 business plan for British Airways, and profited the company greatly. The management community within airline endorsed the continuation of scenario planning, and universally felt that it promoted cross division understand and collaboration, as well as broadening the global awareness within the company of (Moyer, 1996). Many of the scenarios dealt with possible changes in governance and potential impact of increased governance and profitability. The mitigation plans arising from continued scenario planning were one of the keys to British Airways continued profitability in the post 911 era when other airlines suffered devastating losses.

References

British Airways. (2010). Annual Reports and Accounts. Retrieved February 7th, 2015,
from https://www.britishairways.com/cms/global/microsites/ba_reports0910/pdfs/
Our_business.pdf

Moyer, K. (1996). Scenario planning at British Airways—a case study. Long Range
Planning, 29(2), 172-181.

Wade, W. (2012) Scenario planning: a field guide to the future. John Wiley & Sons.

Wade, W. (2014, May 21). “Scenario Planning” – Thinking Differently about Future
Innovation. Retrieved February 2, 2105, from http://e.globis.jp/article/000363.html.


Visit Shannon Moon on TwitterVisit Shannon Moon  on FacebookVisit Shannon Moon  on GooglePlusVisit Shannon Moon  on YouTubeVisit Shannon Moon  on LinkedinCheck the WearableTech RSS Feed