Strategic Futures Analysis Techniques: Using Scenarios to Develop and Test Strategies/Policies
Physical and mathematical models are often used to try and evaluate the ‘real life’ behaviour of systems. Exercises, either live or on paper, are also used to explore the responses to future events. Scenarios are a further tool for exploring the future and considering the range of opportunities and challenges and potential responses to them. All these techniques for anticipating the future are complimentary and can be combined as part of a project. For example, scenarios and mathematical modelling/simulation are increasingly being combined.
There are many examples of scenarios being used successfully to inform better strategies/policies in both the public and private sectors. In addition to helping organisations (including countries) make better decisions and develop a flexible response to future possibilities, using scenarios as a framework for strategic thinking helps organisation to anticipate and manage risk, and the scenario timelines can provide early warning signs of future developments. Scenarios can also help to identify gaps in knowledge and priorities for further research.
The development of strategies or policies is a complex area. This section is restricted to the contribution that future analysis can make to the process.
All too often policy development starts with an analysis of the options, driven by top down objectives or targets. The part that is often the weakest in policy development is looking at the future environment in which the policies will need to be successful, both within the organisation and externally. This is where scenario planning and other futures analysis has a particularly strong role.
The objective of using scenarios to develop policies is to ensure that a wider range of possible options is considered. Equally important is the role of challenging preconceived views of the future and associated policies. Where possible, a cross section of stakeholders should be engaged in the policy development process so that they can contribute to the analysis and have ownership of the outcomes.
Policy analysis (wind tunnelling)
Policy development needs to be directed towards an overarching objective, such as reducing obesity, whereas the starting point for policy analysis is usually to look at all the opportunities and challenges to the policy objective suggested by the scenario. The objective of policy analysis is explore which policies are going to maximise the opportunities and mitigate the challenges and which are resilient to future shocks. It is important that the policy descriptions include how they will be implemented in the scenario, as in many cases similar policies are developed across a range of scenarios but the methods of delivery are quite different.
Either existing scenarios or ones developed as part of the process can be used to analyse policies. However, They must reflect a range of possible future and the potential interactions with the policy objectives.
The process of using scenarios to test policies can be used for policies developed as part of the process or policies that have already been determined.
The future is likely to contain elements of each scenario in a combination that cannot be anticipated. It is therefore important to test policies against a range of scenarios to see how effective they are. This process is often called wind-tunnelling and it can be undertaken by a policy team or though workshops with a range of stakeholders. The latter approach generally provides better insights and more robust analysis. However, in all approaches care is needed to safeguard again preconceived views on both policies and the future.
When testing policies against scenarios it is important to consider:
- Their relevance, as the factor being addressed may not be a significant issue in a particular scenario;
- Their practicality, as the policy may not be effective given the conditions in the scenario, or it may not be politically or financially deliverable; and
- Their implementation. It may be that a policy is potentially successful across a range of scenarios but the way it is presented and implemented in each could be quite different.
If stakeholders are engaged in the process it can provide a good framework for facilitating a strategic discussion on policy options. It is important the decisions taken are not simply based on a scoring of policies against the scenarios. There may be sound reasons why a policy that is contingent on a particular scenario should be implemented. In these circumstances the analysis can be used to consider how the policy could be adapted to make it more robust in other scenarios and to consider the risks associated with the policy.
Scenarios are a potentially powerful tool for developing and testing policies. However, they should not be seen as a mechanical approach to achieving the ‘right’ policy. Scenarios do not remove the uncertainty of the future and there are other complimentary policy tools that can be applied.
The key benefits of using scenarios are that they challenge mindsets and open up consideration of a wider range of options.