Wildcard Scenarios: Planning for the Unpredictable

Rising geopolitical uncertainty and complexity demand new approaches to strategic planning, risk management and scenario planning. Traditional methods are becoming less useful for government agencies, organisations and businesses as trends become less reliable indicators of disruptive changes. It’s no longer enough to rely on forward projection of trends as this doesn’t anticipate shocks, which are increasingly common.

Traditional forecasting approaches to scenario generation are based on inductive reasoning, which starts with specific observations and draws a general conclusion. They involve examining political, economic, social, technological, legal and environmental trends; considering major uncertainties; and generating the ubiquitous two-by-two matrix of near-term possible worlds. Forecasters then examine how the decision or strategy reflects across these scenarios. Governments, academics and analysts in large corporations still use these techniques as this method is most useful for examining long-term trends (10 to 20 years out).

We are entering a new phase of global order, marked by fragmentation and rapid technological disruption. The United States, the global hegemon since the end of the Cold War, is increasingly being challenged. The international rules-based order is becoming more fragmented and marginalised. China is asserting its regional and global dominance, for example by standing up to US tariffs. At the same time, technological adoption and experimentation (as we have seen with AI) can now happen across the global instantly. For most business decisions, the analysis of these global trends only sets the stage for more complicated and shorter-term decisions. This is where it gets hard.

Instead, decision makers and leaders should use wildcard scenarios to test and improve organisational resilience. Wildcard events break established patterns and therefore don’t rely on historical trends. Using truly out-there scenarios will better prepare organisations for major shocks. The goal is agility and recovery, rather than preparing for any specific event as the underpinning causes will be unique, hard to predict and likely unavoidable.

Planners should consider these plausible disruptive and technology-driven shocks that could take place within the next few years: solar flares wiping out satellite communications and telecommunications infrastructure; fusion power providing near limitless clean energy; quantum computers breaking traditional encryption; a large-scale synthetic biology accident occurring; and a runaway space-debris cascade leading to the loss of all satellite-based services.

Some will argue that wildcard scenarios are not truly wild, as trends always come with early warnings and indicators. As science fiction author William Gibson famously said, ‘the future is already here – it’s just not evenly distributed.’ This is, of course, true. But this argument misses the point of forecasting and futures analysis more generally.

The goal of forecasting is not to be accurate or even predictive. Rather, it is one tool to help decision-makers robustly test and thoroughly examine the different decisions across a variety of possible scenarios. There are many other analytical tools and techniques that can achieve the same outcome. It is easy to look back and say what should have been done. The hard part is having the conviction to do it in the first place.

Despite the scenario planning that undoubtedly predicted the possibility of new land-based conflict in Europe before 2022, various strategic reviews did not sufficiently resource the response to the Russian invasion of the Ukraine. It isn’t the scenario’s fault if decision-makers don’t act on the findings. This is why scenario exercises should always be tailored to the decision or organisational challenge you face.

Rather than just looking at the consequences of wildcard scenarios, another powerful technique asks what you would regret not doing to mitigate a scenario in the first place. If a business decision makes sense across a range of wildcard scenarios, then it is likely to be a good idea to do anyway.

However, longer-term risk mitigations are often outcompeted by shorter-term objectives, more tangible outcomes and near-term priorities. National security organisations pride themselves on being agile when responding to new and emerging threats. But the key challenge is not to be responsive. Rather, organisations should aim to be resilient. Actual resilience comes through the preparation, not just the thinking.

The world has changed and so should our approach to analysing it. Scenario planning is just one of many forecasting tools used by security and defence professionals. We should update our approach and include more deductive techniques to complement strategic decision making.

Kyle McCurdy is a technologist and former British diplomat. He has 15 years’ experience in operationalising emerging technologies, working in cyber, partnering with new companies and innovating within government.

AI contributed no ideas to this article – Kyle McCurdy.

This article appeared originally at The Strategist (ASPI).