SCENARIO BUILDING

Concepts and Areas of Scenario Building

Concepts and Areas of Scenario Building

Introduction

Scenarios are alternative descriptions of the business environment. They are stories, descriptions or maps of the hope. They are internally consistent stories describing paths from the present to a future time horizon. Good scenarios are rooted in the past and in the present. They provide an explanation of past and present actions projected into the future. The key focus of scenarios is uncertainty. The objective is to identify the major uncertainties affecting the strategic decisions facing a business or the policy issues facing governments. Scenarios help chart the waters in front so that the effects of today's conclusions can be played out, assessed and tested against the doubt of the future.

Scenarios may be very broad or much focused. They may emphasize long term trends or the dynamics of key variables over time. They may explore key themes or ranges. There are 5 ordinary features of scenarios worth noting.

Multiple Views

Scenarios always involve more than one view of the future. That is their explicit objective. A single view is a forecast.

Qualitative Change

Scenarios are most appropriate when dealing with complex, highly uncertain situations in which qualitative, non-quantifiable forces are at work. (e.g., social standards, technology, regulations, etc.).

In his book, Art of the Long View, Peter Schwartz observed that scenarios are about perceiving futures in the present. The idea is that the seeds of the future are present today, if only we could interpret them. We apply this simple idea in developing scenarios. Our challenge is to identify the “seeds”, interpret their significance and project their implications into the future.

The Scenario Planning Process

Peter Schwartz has developed a structured approach to building scenarios. As shown in Figure 1, the scenario planning process involves the following steps:

1) Clarifying the focus of the scenarios (a focal question)

2) Examining past changes to identify ongoing trends and forces

3) Identifying future changes and the forces driving those changes

4) Identifying the critical uncertainties which could lead to distinctly different futures

5) Creating a logical framework based on the critical uncertainties

6) Fleshing out the major characteristics and developing stories for each scenario

7) Identifying the major implications of the scenarios on the organization

According to Godet, the word scenario is often used to describe an abusive manner no matter what set of hypotheses. In our experience on the revisions for the realization of this work could corroborate the fact that a search term in any bibliographic database yields a significant amount of work that few, however, consist of an application of method. 

Apart from this, in theory the scenarios are a synthesis of different hypothetical paths (events, actors and strategies) that lead to different possible futures. In practice, scenarios often describe particular sets of events and variables, constructed in order to focus attention on the direction and impact of trends, the stability of causal processes within the systems under analysis, breaks feasible, the practical implications of the future scenarios and ...