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Scenario Methods & Approach

 

We employ a mix of established international methodologies with the practical experience gained by strategic planning and market movements in European and transition markets. Our methodologies are designed to be transferable, practical and rooted in the real world rather than a theoretical, textbook framework.

We generally utilise a 10-step process, complemented and adapted to specific sectors, companies and issues:

Step 1: Problem Definition

Clients are asked to define a specific problem or situation the scenario is to address. The problem must be as specific as possible, usually expressed in a series of questions starting from the most general to the most specific and detailed. A specific time frame or deadline for the event must be included in the problem definition, as this will guide the ensuing research.

Step 2: Selection of Stakeholders and Research Partners

Scenarios reflect the combined work of stakeholders-decision-makers who will be directly affected by the scenario-as well as research partners. The scenarios are developed by a project team comprising:

  • Decision-makers (usually corporate executives at line management levels, with the potential involvement of specific experts, board members and in some cases the CEO);
  • Other stakeholders (e.g. union representatives, suppliers, customers, government regulators) who’s involvement in the scenario process provides a unique insight or role in subsequent decision-making.
  • Research partners are those institutions, individual experts or other authorities who will be consulted during the scenario process.

Step 3: Identification of Dynamic Factors

Dynamic factors are those elements which drive, or determine, a given scenario, or situation. These include the internal and external work environment; the competitive forces and actors; large-scale paradigm shifts in information technology or social trends; and others. In essence, the identification of dynamic factors develops a 360° view of a given situation, both at the present time, and within the timeline of the scenario.

Step 4: Research and Trend Identification

In order to understand how scenarios may develop, it is necessary to collection of relevant data, e.g. demographics, consumption patterns, regulatory issues, etc. This is accomplished through a mix of secondary and primary research (questionnaires, interviews, focus groups, surveys). This research is targeted at the dynamic factors already identified in Step 3.

Step 5: Trend Analysis and Identification

The research data is used to identify emerging trends in specific areas, e.g. consumption, adaptation of technology, etc. Given the future scope of most scenarios, trends are also categorised as “likely”, “unlikely” and “uncertain”.

Step 6: Prime Modelling

Because scenarios address uncertainties, the trends identified are qualified or quantified as far as is possible, usually as diametrical opposites. The process of elimination is used to focus on those factors which are considered the most important, or the most decisive, in defining future scenarios.

Step 7: Matrix Construction or Scenario Modelling

Scenarios are often presented as matrices, where the matrix axes are defined by the key uncertainties. A popular type of matrix is divided into four quadrants, with 4 distinct scenarios thus defined. Higher numbers of scenarios, e.g. 9 or 16, can also be defined. If a matrix is not used, then a descriptive, modelling approach is possible.

Step 8: Scenario Development

Based on the alternatives developed in the matrix, the basic scenarios are developed. This entails a visioning and writing process: each scenario is described in terms of how the world, or a specific situation, would appear within a given point in time. This is a strong opportunity for creative group work, whereby the different stakeholders are challenged to picture a future situation. A creative approach is used: samples of newspaper headlines, consumer profiles, or “historical” events can be generated.

Step 9: Scenario Revision

The scenarios developed are checked and revised for plausibility, consistency and resemblance to actual business developments and conditions. This provides an opportunity for a “reality check” of the situation, although it must be said that in many cases, the future may be more improbably than common wisdom may be able to imagine.

Revision is accomplished by sharing the scenarios with a reference group or wider set of stakeholders. Through small-group work or personal interviews, the scenarios are checked to see if they are “realistic”, and if their internal reasoning is consistent. This provides a framework for a wider consultation.

Step 10: Scenario Monitoring & Tracking

The likely impacts of the scenario are translated into specific risks and opportunities, usually by the strategy unit of a company, or by the Navigator working in conjunction with corporate executives.

By associating a scenario with specific drivers, barriers and triggers, our clients are able to utilise the research and work undertaken to prepare themselves for future situations and conditions. The set of barriers, drivers and triggers is monitored over time, and the scenarios can be updated and revised as needed.