With a financial crisis looming large, stemming from poor lending standards in the U.S. housing market and spreading to the credit markets, to an “unquantifiable threat from climate change” and “rising concerns about energy security and geopolitical scrutiny,” the world today is perhaps more “uncertain and unpredictable than ever.” What do the next 10 years have in store? The recently released “Risk 2018: Planning for an Unpredictable Decade” an Economist Intelligence Unit report, considers this question and begs another: how prepared are organizations to meet the challenges and manage the risks of the next decade?

“One of the biggest risks that companies face is the gap between their mental models and the emergent reality,” says Eamonn Kelly, chief executive of Global Business Network, a member of Monitor Group, and authority on scenario planning, a technique in the report as one that more companies will increasingly use to “map out the road ahead.”

As executives look for “guidance on how major trends, such as climate change, demographic change, the economic development of emerging markets and the impact of new technologies, might affect their long-term strategy, they [also] want to understand how their customers might change, how their industry might evolve and how the competitive environment might respond to a range of different scenarios.”

“By strengthening their peripheral vision, while admitting that they cannot predict the future, companies stand a better chance of being able to identify risks or opportunities more quickly than the competition.” In fact, it is this ability to identify risks that Kelly says gives organizations a “better understanding of the changing context and conditions, together with the capacity to respond quickly and coherently to those changes” – a critical advantage as companies navigate the fast moving and unpredictable waters of the next decade.

Quoted throughout, read more about Eamonn Kelly’s perspective on scenario planning on pg. 14 of the “Risk 2018” report.