In studies of the future, we typically define for leaders a number of potential outcomes. Obviously, nobody can be certain of the exact future, but through rigorous study of strategic trends, we can at least understand many of the major uncertainties, and plan ahead accordingly. These uncertainties are often boiled down into “scenarios,” a tool with which many people are familiar.

Scenarios must be defined and presented in a certain way if they are to inspire leaders to consider all the possibilities. There are risks if scenarios are done wrong. Present only one scenario, and the rest is considered blasphemy. Present two, and people are forced to take “sides,” both of which may be misleading. Present three scenarios, and people will usually fixate on the “moderate” scenario, even though it is no more reasonable or reliable than one with more impacts. For these reasons, we recommend no fewer than four scenarios, a broader set of uncertainties that stimulate discussion as to our course of action.

The image at right gives only one way of presenting a variety of scenarios, though probably my favorite way. The impact of these potential futures vary from mild, to wild. Note particularly the “wildcard scenario” – low probability, high impact. It probably won’t come to pass- but if it does, all bets are off. In our experience, wildcards are often discarded as too improbable to be worth the potential lost time discussing some doomsday scenario. Many executives avoid a serious consideration of wildcards, preferring to focus on scenarios with brighter upsides.

The BP spill, now in its 43rd day, is the definition of the wildcard, and the best possible argument for why they should be considered in advance.

True, planning for low-probability, high-impact events is not the quickest way to juice up revenue and profit. But it could mean the survival of the company.