Strategic Futures Analysis Techniques: Scenario Planning
Scenarios describe how the future may look and they are based on an analysis of the critical uncertainties. It is important to recognise that scenarios are not predictions or forecasts of the future. They should be engaging and credible and have internal logic and consistency. However, they should also be challenging and stretch thinking about the range of possible futures. If a robust set of scenarios has been developed, it is likely that the actual future will contain elements of each of them. What cannot be predicted is the combination of outcomes from each of the scenarios.
Scenarios should also contain a path from the present to a future point in time. This ‘timeline’ tells the story of how the scenario evolves and the critical events that shape it. It also indicates possible points at which to influence the future and early warning signs of potential developments. If it is not possible to construct a robust ‘timeline’ the credibility of scenario should be questioned.
Most of the value of scenarios comes from the opportunity they create for discussion about the future and the potential opportunities and challenges. They can also provide a neutral space (the future) for different groups of stakeholders to have an open discussion in a safe environment. This gives a framework for strategic thinking, more robust policies that take account of a range of potential futures, and an understanding of potential risks.
Before developing a set of scenarios it is often useful to review the past, going back typically twice as far as the time horizon of the scenarios. This ensures a good understanding of what has shaped the current position and the potential rate of change, which in most cases will be accelerating
There is a wide range of potential methods for developing scenarios and more information on the most common of these is in the Scenario Planning supporting page.
Most methods are based around the following stages:
- Defining the scope
It is important to have a ‘focal question’ for the scenarios. This needs to define the scope of the scenarios and the timescale into the future. It should not be too broad but it needs to cover all relevant interactions within the issues being addressed.
- Identification of drivers Drivers of change are the main building blocks for scenarios. See page on drivers’ analysis.
- Identification of predictable elements and critical uncertainties Some aspects of the future are reasonably predictable and will be common to each scenario, although caution is needed in assuming predictability. Other drivers will result in a range of different outcomes, which together result in the different futures in each scenario. The critical uncertainties are the drivers that have the biggest impact on the ‘focal question’ and have a range of different outcomes, such as the example below:
- Constructing the scenario spaceThe scenario space is defined by the critical uncertainties. It is space that contains all the potential scenarios. Two critical uncertainties result in a scenario cross and a two dimensional scenario space such as the Horizon Scanning Centre’s scenarios for UK Futures and Society 2030
If there are three critical uncertainties the scenario space has three dimensions such as green culture, green innovation and the economy, as shown below, which were derived for the European Agency for Safety and Health at Work, when looking at scenarios for new and emerging risks for health and safety in green jobs. Generally, it is highly unlikely that developing eight scenarios, one at each corner, would be practical or useful, and in this case four scenarios were developed at selected points on the axes to provide plausible and differentiated scenarios.
If there are more than three critical uncertainties it is not possible to graphically present the scenario space but the different combinations of the critical uncertainties can be tabulated. An example of scenarios with five critical uncertainties (environmental awareness; human well-being; governance and intervention; overseas ecological footprint; and adaptation capacity) is the UK National Ecosystem Assessment.
- Selecting the scenariosAny scenario space can contain a significant number of scenarios and these become potentially more complex as the number of critical uncertainties increases. The selection of the scenarios is usually conducted by reviewing the potential scenarios and their value in addressing the focal questions. For example, in the case of three critical uncertainties you may start by looking at the eight potential scenarios formed by each corner of the cube. Each potential scenario would then be considered against a range of questions, such as the following:
- Does it address the critical issues associated with the focal question?
- Does it allow both negative and positive aspects to emerge?
- Is there a plausible path to the scenario?
- Does it stretch current thinking?
The selected scenarios should be kept under active review as they are developed and it is not uncommon to revisit the original selection.
- Scenario and timeline generationThere are many ways to generate scenarios and timelines and the process can be done by a small team or involve a large number of participants, typically via workshops. Consideration should be given to the engagement of stakeholders in the process as this can help to encourage ownership of the scenarios; and many valuable insights can be gained during the process.
The techniques of scenario generation range from the use of tools commonly associated with facilitated workshops, to technology based approaches for which there are a number of software packages. The software approach enables a wide range of interactions between critical uncertainties to be handled and a large number of scenarios to be efficiently generated. If scenarios are to be generated without software, a common approach is prepare a brief description of the end point of a scenario and then start constructing the path to this, taking into account the drivers of change, the associated events and how the key stakeholders will respond to them. This is usually an iterative process that progressively builds the pathway and develops the end point.
- Communicating the scenariosIt is important that the communication of the scenarios is tailored to the audience. This is helped by having a distinctive scenario name, appropriate imagery and memorable events in the timeline. The objective is to not only to communicate the facts about the scenario but also the emotions, so that the audience can ‘live’ the scenarios. Some of the approaches that can help with this include: