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Scenarios

Scenario planning is one of the most well-known and most cited as a useful technique for thinking about the future. Scenarios are prepared for potential future challenges, not predictions of what will happen. They help us to identify future option spaces and give us the confidence to act in a world of uncertainty.

Scenario planning questions assumptions we all make about the future. The method creates plausible views of the future that decision-makers can use to determine their best response and how to react to alternative plays.

Scenarios are qualitatively distinct visions, told as stories, of how the future looks. They make explicit the assumptions of how the world works. As the project progresses, the process will move from wide exploration to a narrowing of focus, from horizon scanning to envisioning potential futures and determining response. Stories are wake-up calls for humanity; perspectives on truths and possibilities that others ignore until shown a light. Writers of scenarios need to develop their sight to see the wholeness of issues and communicate that to others.

The key to creating scenarios of best/worst case options is in finding that strategy that represents the best ground on which to base subsequent action plans.

Scenario archetypes, originally developed by Jim Dator, are overarching, global, macroscopic images of alternative future states of the world. As predictions about the future are impossible, scenarios come in handy to compellingly inform on a range of possible futures of an issue at stake. With the scenario archetypes method, four scenarios are outlined: continued growth, collapse, disciplined society, and transformation. These are narrative patterns about how the future can unfold. These images are empirically derived, as it has been shown that individuals in large part project their most hardwired and instinctual ideas of the future into this limited set of four narrative images. For organizations, scenario archetypes allow staff and stakeholders to understand profoundly the complex nature of the unfolding future external environment, whether this at a macroeconomic level, industry level or product level alike. Projecting four equally consistent and equally plausible futures stimulates discussion on how one business can effectively react to four different set of external complex and intertwined forces, and how it can shape the future so that it leads to the preferred scenarios among the four. This method is particularly useful when environmental uncertainty is high, industry rivalry is fierce, new entrants’ threats and technological substitutes impeding and when social dynamics and ideologies change quickly as a consequence of technological advancements.

Our system allows you to create scenarios from scratch using traditional methods, to use our forecast database for ideas for your scenarios, or to auto-analyze our forecasts using Jim Dator's scenario archetypes as your model. The latter is highly efficient and effective, requires no horizon scanning and is likely to better challenge participants' worldviews of their future than traditional methods.

Uses of the method

  • To uncover a range of long-term (20-50 years) possible futures of the macro or micro socio-economic environment around one business
  • To understand the leading as well as hidden forces shaping the futures of one business
  • To notice environmental signals leading to each future
  • To envision different customer persona, products and services for each future envisioned
  • To envision a preferred future among the scenarios
  • To create a shared, long-term business strategy today that will be consistently successful in each of the futures envisioned, leading to the preferred future and preparing the organization to face the other futures
  • Explore uncertainties
  • Test for limits
  • Order alternative futures
  • Identify emerging risks and opportunities
  • Improve future assumptions
  • Derive better planning information and knowledge
  • Provide an outside-in challenge
  • Act as a forum against conventional inside-out orthodoxy
  • A way to dream in a safe environment
  • As an approach to derive fresh vision and/or current or new strategy development
  • Sensitivity and risk assessments and comparative testing of projects, portfolios, and organizations
  • Rehearse the future
  • Informs both personal and organizational choices

Benefits

Building scenarios help:

  • Collaboration and appeals to a wide range of participants
  • Increases individuals’ creativity and futures thinking capabilities
  • Provides rich and compelling narratives to strengthen understanding and recall of the futures envisioned
  • Scenarios are fun and engaging to experience and to create
  • Can be used by itself as well as integrated with other foresight methods, e.g. CLA
  • Integrative with a range of media delivery options (role-play games, sci-fi vignettes, storytelling podcasts, illustrations, and posters)
  • Develops futures preparedness across the organization
  • Challenges the organization’s conventional wisdom
  • Offers potential for organizational learning
  • Increases organizational communication
  • Improve the realm of possible options
  • Make us live the future in advance so as we can take better decisions today
  • Avoid unpleasant surprises
  • Change our vision of how the world works
  • Generate a common understanding of the real issues
  • Test our decisions against a range of possible worlds
  • Deal with complex adaptive environments where the outcome is uncertain
  • Teach people and teams how to think strategically about the future and know how to act
  • Agree to a common language
  • Inspire, engage and enable shared action
  • Identify issues for further horizon scanning
  • Stands the test of time if regularly questioned and revised

Scenarios are not an end in themselves, but a tool to:

  • Identify risks to, and opportunities over the desired time period
  • Expose long term challenges for strategies and policies
  • Deal with a mix of wide-ranging qualitative and quantitative inputs
  • Enable assumptions to be made clear and explicit
  • Make real the implications of these challenges
  • E-collaboration
  • Support and improve vision and policy-making by starting grounded and challenging conversations about choices, trade-offs, and conflicts
  • Build capacity among staff in futures work

In some organizations, scenarios are embedded in the fabric of decision-making and are a way to do business e.g. Shell Oil Company

Disadvantages

  • Requires time, ideally several sessions
  • Requires participation of organizational leaders so that the scenario produced are perceived legitimate across the entire organizations
  • Requires participants from different backgrounds and viewpoints to be compelling and thorough
  • It can be difficult not to see archetypes as best-case/worst-case scenarios, but as interrelated sets of good and bad factors
  • Can fall into disuse if not properly presented to the organization
  • Requires an experienced facilitator
  • It can be construed as the 'official future' by non-experts.
  • May lack credibility as being too far-fetched, subjective or meaningless.
  • After a time scenarios can be seen as plain wrong!
  • It cannot be validated.
  • Can suffer from cognitive/cultural myopia.
  • People may not be able to suspend their disbelief.
  • Time-consuming.
  • Complex.
  • It can be expensive.
  • May suffer major project creep if not well managed.

However, these can be overcome, in the large part, by proper communicating of the purpose from the outset and the use of our auto-generated horizon scanning and Jim Dator's scenario archetypes.

Steps to complete
Almost all formal scenario planning is done manually in workshop settings and the approaches are usually deductive using quadrant-based models or inductive (determine all of the potential futures that could be problematic or opportunistic, and mix them and match them into commonly-themed groups).

Both of these approaches can be very useful and insightful, but are intrinsically limited -there are only so many possibilities that mere humans can come up within the limited time and with the limited tools that are typically available. Most authors and experts recommend the construction of four scenarios as one can only be considered a forecast, two would most likely limit competing uncertainties and three may cause people to assume one is the forecast. Where more than four scenarios are required then the Options (Morphological Analysis) method should be considered.

The timing of scenario projects should be considered carefully. Avoid such a project when the strategy round has just ended, when key executives are on the move, the market or organization is in chaos, when there is political infighting or competing projects make too much noise.

An effective way of trying to exhaustively identify futures that could be of particular interest is to do it abductively with technology. Scenarios can also be developed using technology but technological approaches are not always the most effective way to do scenario work though they certainly can provide good input into scenario thinking.

Creating a scenario

  • Identify the specific domain/environment that is of interest (e.g. terrorism, renewable energy, alternative health care, etc.) and write the key question using the 'Interview' tool and/or 'Issues' analysis here.
  • State the specific decision that needs to be made as a prime purpose statement
  • Identify the major driving forces (e.g. market elements, government regulation, social values, manufacturing processes, etc.).
  • Determine how they contribute/interact with the other forces, both positively and negatively using the cross-impact method to identify patterns and choose the strongest driving/restraining forces.
  • Spend time to build a systems model. Use the 'Modeling' tool here to build your model exercise/iterate the system through possible states or futures.
  • Evaluate to determine which is high-value and needs to be evaluated through the construction of a scenario.
  • Name these scenario drivers with short sharp metaphoric, vivid and
    memorable titles that do what it says on the tin and write an
    associated key question as a description that provides a short, provocative overview. Choose your scenario story carefully in order to increase innovation.
  • Determine the scope and scenario exclusions being careful not to be too broad or too narrow in terms of the focus.
  • Determine whether medium-term (plausible) or long-term (possible) scenarios are required.
  • Separate and rank the fixed driving forces that will inform your strategic response: slow-changing phenomena e.g. demographic shifts, constrained situations, e.g. resource limits, in the pipeline e.g. aging of baby boomers, inevitable collisions e.g. climate change arguments.
  • Separate and rank the variable forces that will inform your strategic response, e.g. economic recession, inflation, the pace of technological change. In ranking the variable factors confirm, through further evidence collecting, that these are genuine uncertainties, attempt to disconfirm them through contradictory evidence and/or find alternatives that offer an entirely different view of the uncertainty.
  • Create several scenarios at once ensuring these fixed driving forces appear in all your related scenarios.
  • Rank and group the remaining critical variables (key uncertainties) in up to four big scenario drivers. Use the 'Modeling' tool here to group issues in influence maps or traditional techniques such as hexagons or Post-it notes.
  • Conduct interviews, workshops and horizon scanning to flesh out, group ideas and refine the scenarios. Use the 'Interview' tool here to conduct your interviews. Use these methods to determine who and what is important to the future.
  • Develop a list of what the reader should remember from the scenario and turn these into evocative images and details to be used in the story-telling.
  • Determine who the main character will be in the scenario i.e. the one telling the story and up to five characters to give the story multiple perspectives and interest. The main character is the protagonist: a character with whom your audience relates to and experience the real problems, desires, conflicts, and outcomes. The plot is not something external to your main character, it is your main character. Ensure that there is an antagonist/villain taking an opposing view.
  • Begin by developing each scenario using the 12 Stages of story development below:
    • determine the central theme from above and expand it in three acts: the beginning, middle, end.
    • draft a three act-template to determine the overall strategy
    • develop the premise
    • determine the proper external structure
    • develop the internal structure
    • develop a five-character relationship
    • write a working treatment
    • define and create the story
    • use the drop-downs:
      | Prime purpose | Scenario type | Position | Scenario outcome | Genre | Judgment | Plot
      to properly think through and frame your question.
    • research the characters and the story
    • design the imaging system
    • break down the story scene by scene
    • now write the full script
  • Describe the scene telling the story looking back from your chosen time horizon to today. Produce narrative stories for each key scenario. Minimize extraneous story elements; keep it tightly focused on what the reader must remember.
    • the beginning provides time to introduce the scenario, premise, inciting incident, main character(s), problems, desires, relationships, genre. The middle leads the main and opposing characters into conflict and confrontation and further develops the theme and premise while the end reveals the consequences of the characters' decisions and the outcome of what the world might be like in this circumstance(s).
    • read this article on story types and this one on how to write stories ensuring each scenario is grounded in the real world particularly how it evolved from where it is now. Browse the Power of Screenwriting, Michael Chase Walker for more on the 12 Stages of Story Development.
  • Use one person to document and aggregate all of your scenario material here or possibly in a subsequent workshop of key participants.
  • Add evocative images from the time of, and perspective of, future generations.
  • Stress test and wind tunnel the scenarios looking for consistency, plausibility, relevance and presentation style among them. Amend the scenario as necessary. Use the Plausibility method here to rate how participants view the scenario.

Using the scenario

Once your scenario is created you can choose to:

  • Identify potential strengths, weaknesses, opportunities, and threats arising from this scenario
  • Test your official future through Futureproofing
  • Generate new ideas
  • Roleplay from the perspective of different stakeholders
  • Make recommendations on what needs to be changed and by who

To develop one or more of these ask participants to role play from the perspective of major stakeholders e.g. government, rivals, citizens or industry. You could assign different participants to play different roles or for all to adopt the same one.

Ask participants (in role-play and from the perspective of the time horizon you chose above) to detail the current or proposed future, and consider what is certain to occur and have a high impact in the scenario. Then ask them to consider the strengths, weaknesses, opportunities, and threats in this scenario that they perceive they would face in their role.

Next, ask them to say what they like or dislike about the scenario and how the other stakeholders might achieve success or otherwise and then to complete this part of the exercise by offering their view on the robustness of the scenario.

This is the end of the role play.

Discuss the results with participants in a  plenary session and summarize the results under the administrator's login.

Now, ask participants to return to today and their current role. Ask them to state their most exciting or feared idea, describe key challenges that your organization may face in the future and to make recommendations on what should be done and by who to assure success.

Capture unique insight into new ways of seeing that can be utilized by the organization e.g. vulnerabilities uncovered, big bets, mega opportunities, identification of leading indicators, big surprises

What conclusions can we draw from the exercise(s)?

  • How might the future be different?
  • How does A affect B?
  • What is likely to remain the same or change significantly?
  • What are the likely outcomes?
  • What and who will likely shape our future?
  • Where could we be most affected by the change?
  • What might we do about it?
  • What don't we know that we need to know?
  • What should we do now, today?
  • Why do we care?
  • When should we aim to meet on this?

Your scenario will be a good one if it inspires, engages and enables others to take action, breaks people's acceptance of current paradigms and produces plausible outcomes that can be turned into strategic responses.

Collaboration
This method and your response can be shared with other members or kept private using the 'Privacy' field and through the 'Tag', 'Report' and 'Forum' functionalities. Use 'Tag' and/or 'Report' to aggregate your analyzes, or add a 'Forum' to ask others where they agree/disagree and encourage them to make their own analysis from their unique vantage point.

Click the 'Invite tab to send invitations to other members or non-members (colleagues, external experts, etc.) to ask for their input. You can whether or not you want anonymous responses.  These can be viewed and exported within the Responses tab.

Scenarios Archetypes Consultancy

This tool is best used with a trained consultant in attendance first time out and maybe beyond. We recommend a researcher and consultant who has used and taught this method in a variety of settings in academia and practice to help you find the right facilitator as follows:

Alex Fergnani

Further reference

History
This method first emerged after the Second World War and during the Cold War as a military planning tool when the U.S. Air Force began to consider what its adversaries might do in different circumstances and to then prepare alternative responses.

Herman Kahn, who had been a member of the U. S Air Force team further developed the tool for business use while with the Rand Corporation.

In the 1970’s Pierre Wack, working for Shell, as a planner used scenarios to help the company anticipate what would become the October 1973 oil price shock. Shell had prepared for this based on Wack’s work. As a result, Shell had a big competitive advantage versus its lesser prepared but bigger rivals. It quickly moved to the second in size and first in profitability. Since that time Shell has embraced Scenario Planning as part of its decision-making culture. However, it still remains an internal think-tank rather than a universally adopted technique across the company.

Wack’s work has been further developed by many scenario planners including Kees Van der Heidjen and Peter Schwartz (both ex–Shell employees and others).

In the 1990s facilitated scenario planning sessions began to be offered to organizations.

Today it is the most well-known of strategic foresight techniques, employed by many organizations around the world and the term has entered the everyday language.

Contact us
Even with all the advice and tools we have provided here starting a foresight project from scratch can be a daunting prospect to a beginner.

Let us know if you need help with this method or want a group facilitation exercise or full project or program carrying out by us. We promise to leave behind more internal knowledgeable people who can expand your initiative for better organizational performance.

Contact us today for a free discussion on your needs.

Are there other enhancements or new methods you would like to see here? Let us know and we will do our best to respond with a solution quickly.

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