Using System Dynamics to Inform Scenario Planning: A Case Study

Developing strategy and policy requires some understanding of both the present and the future, but operational environmental change can makes these two vastly different. Defining that which is predetermined and that which is not about the future can provide clarity and decrease the space along which the present system might evolve into its future state. Scenario planning is an approach for exploring these different possible futures. The development of scenarios is about surfacing mental models, testing them, and learning. However, the literature on scenario planning offers little in the way of guidance about how this can be done. System dynamics offers a formal process for surfacing, testing and informing mental models. This paper presents and investigates the use of system dynamics to inform scenario planning. It did this by applying the two approaches to a not-forprofit organisation. While scenarios and a dynamic model were developed, the effectiveness of this application of the approaches is questionable. The dynamic model did address issues that remained unanswered by the scenario planning approach. However, it only addressed one small part of the system explored by the scenarios. System dynamics has the ability to explore systems on a range of different scales, suggesting that this particular application may not have reaped the full benefit from integrating these approaches. Word count: 4,959 (excluding references)

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