Strategic Futures Analysis Techniques
Strategic drivers, sometimes called drivers of change, are major forces or trends that will shape the future environment within which an organization or an individual needs to operate. High level drivers include issues such as globalisation, demographic change and technology.
Horizon scanning is often the the largest source for the identification of drivers. Scanning should therefore cover all categories of driver, as described by STEEP (Societal, Technological, Economic, Environmental, Political) or similar categorization templates.
Drivers are the important building blocks in most strategic futures analysis. Their applications include:
- Constructing scenarios for the future;
- Identifying future potential threats and opportunities and developing policies/strategies to mitigate or exploit them; and
- Contingency planning and its associated risk analysis.
It is likely that initial analysis will result in a large number of potential drivers, typically be over one hundred. All of these a likely to be important and care is needed not to discount weak signals of potentially disruptive drivers. The analysis of drivers depends on the purpose of the work. It is particularly important to understand the difference between their use for generating scenarios and contingency planning.
Most scenarios are based on an analysis of future drivers of change and their associated uncertainties and interaction. To determine the most appropriate framework (axes) for the scenarios it is necessary to identify the drivers that generate the critical uncertainties in the future. These are those that have a major impact and for which the outcomes are uncertain. For example, if an area of high impact is electricity generation the potential outcomes could be as below:
It is often useful to prioritise drivers in a workshop. The drivers can be placed on cards and sorted against a grid as below:
The critical uncertainties are the drivers (or groups of complementary drivers) that define the differences between the scenario. The high impact low uncertainty drivers (predictable) are those that are common across the scenarios. The lower impact drivers are still important and can form part of the scenarios but they do not define the relationships between the scenarios.
Contingency Planning / Risk analysis
The key difference in the use of driver from contingency planning is that you are looking for those with a high impact and a high probability. The risk of an event is the product of its impact and probability. Drivers are therefore sorted against the following matrix:
The critical risks are those where the driver has a high impact and a high likelihood. However, the ‘unforeseen’ events that are caused by drivers with a high impact but a low probability can be difficult to manage. It is often difficult to predict the probability of such events occurring and probabilistic forecasts are also unlikely to indicate when an event will occur.
The analysis of the drivers also assists in generating potential outcomes for future events. The capability to manage and respond to future risks is generally judged against an assumed worst case practicable outcome.
An important aspect of any futures analysis is to try and determine whether the driver being considered is a predictable trend or an uncertainty. Trends can be used to forecast the future and used as part of models. Uncertainties need to be handled through drivers analysis or scenarios.
It is also important to consider the past and the events that have helped to shape the current situation. Given the accelerating rate of change across many aspects of the future it is recommended you should look back about twice as far as the analysis of the future is being taken.