Why Strategic Foresight Matters: An Introduction to Scenario Planning for New Space SMEs

The New Space industry is dynamic and full of potential, but it’s also shaped by uncertainties like technological advancements, shifting regulations, and fluctuating market demand. To navigate this ever-changing environment, strategic foresight is essential.

One of the most effective tools in strategic foresight is scenario planning. This methodology isn’t about predicting the future, it’s about exploring a range of plausible futures and preparing for them. By identifying key drivers of change and mapping uncertainties, organizations can develop flexible strategies to thrive in different contexts.

The origins of scenario planning trace back to military strategy, gaining significant traction in the corporate world during the late 20th century. A notable example is its adoption by Royal Dutch/Shell in the 1970s, which helped the company navigate the complexities of the 1973 oil crisis. By considering different scenarios, Shell maintained its strategic direction and competitive edge despite turbulent market conditions.

For a deep dive into the methodology of scenario planning, with use-case discussions, I recommend this article.

How scenario planning works:

1. Identify Key Drivers: These are the forces shaping the future of the industry, like funding availability, regulatory frameworks, and geopolitical trends.
2. Define Critical Uncertainties: Focus on the factors that could go in multiple directions (e.g., supportive vs. restrictive regulations).
3. Build Scenarios: Create detailed narratives about how the future could unfold based on different combinations of these drivers and uncertainties.
4. Stress-Test Strategies: Evaluate your plans against each scenario to ensure resilience and adaptability.

Each scenario must be:

• Plausible: Realistic and credible, grounded in the identified drivers and uncertainties.
• Internally Consistent: All elements within a scenario should logically fit together.
• Relevant: Focus on aspects most pertinent to the organization’s strategic decisions, highlighting potential opportunities and threats.

Scenario building typically includes creating detailed narratives for each scenario, describing potential future events, key actors' behaviors, and outcomes.

It’s important to note that scenario development is a collaborative effort, often animated by an external professional in the field. It’s an iterative process, involving multiple rounds of feedback and adjustments to ensure the highest impact on a company’s strategy.

In my SKEMA GEMBA Capstone Project, I developed four distinct scenarios for the European New Space industry, each highlighting how SMEs could face unique challenges—or opportunities—depending on the interplay of these factors. For example:

• A future with strong regulations and abundant funding could position Europe as a leader in space innovation.
• Conversely, regulatory stagnation and limited investment could hinder growth and leave SMEs struggling to compete.

Scenario planning allows organizations to see the bigger picture and prepare for a variety of outcomes. It helps SMEs in New Space act proactively, not reactively.

How familiar are you with scenario planning? Have you used it in your organization? Share your experiences in the comments!

In the next article we'll dive into the key drivers and uncertainties shaping the European New Space sector and how they influence strategic decisions.

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