Creating Flexible Plans for an Uncertain Future: From Exploratory Scenarios to Adaptive Plans With Real Options

Abstract

Scenario planning is increasingly used to manage uncertainty, but such planning often struggles to influence decision making and help communities navigate multiple futures. This article proposes a framework for planning practice that integrates scenario planning and real option theory to identify adaptation options that make plans or projects responsive to multiple futures. The framework is explained through a demonstration case, Plan Bay Area 2050 and Link21, based on document content analysis and expert interviews. The findings show that exploratory scenarios generate opportunities for real options reasoning and adaptive planning, by making uncertainties explicit when thinking about the future.