Scenarios: What they are and their uses

An overview of the dominant method used in foresight work at the moment.

Scenarios: What they are and their uses

Scenario planning is an approach to imagine possible futures and explore how your organisation can be successful in those futures. The word ‘planning’ however has created a view that it is a planning method, which is partly true but it is also a constraining view.

A concise and useful definition is from Jay Oglivy:

Scenarios are alternate futures in which today's decisions may play out. They are stories with beginnings, middles and ends. Good scenarios have twists and turns that show how the environment might change over time.

But Kees Van der Heijden reminds us too that scenarios are also mental models of the organisation’s external environment. They are shaped by our assumptions and beliefs about futures. They represent a useful way to use our foresight capacities in an applied sense.

Scenarios are not predictions - they provide us with narratives about a range of expanded and new understanding of this environment in the present. They provide ‘clues’ about what might be important drivers of change in the future, and how those drivers might interact, they identify strategies that might be robust across all scenarios, given what we know about how the future might develop, and they help to identify ‘early warning indicators’ that an event in the scenarios may be emerging so that we have time to respond proactively.

Scenario planning emerged in its present form emerged in the 1960s when it was used in a planning context. Scenarios are now used across a range of contexts and for many purposes, but all have a common aim of developing images of possible futures to inform action in the present. I’ve written a short overview of the emergence of scenario theory and practice which you can download - it’s an extract from my PhD thesis so was designed around my research but it covers the main point - the need to change how we think about futures in any scenario development process.

There is no way I can write in any meaningful way about the full gamut of scenario development that now goes on across the world. It has become a dominant method in Futures Studies and there are many variations now available to use. Its popularity stems from it seeming to be a fairly straightforward method to use when it is actually a complex method designed not only to generate alternative futures and potential strategic options but to also enable a mindset shift. Some say that the work of Shell in the 1960s validated the use of imagination in organisations. This video is an explanation of the Shell scenario approach from which - I think I can say - most, if not all, present-day scenario processes have emerged.

Perhaps the most important thing to remember about scenario work is that they are thinking tools, a way to trigger new thinking - not the outcome of a futures process. The scenarios that are imagined will never come true in the form that you create them but thinking about the implications of those sorts of possible futures will both expand your perception of possible strategic options in the present - if you can open your minds to the unknown as well as the known.

It is the combination of process and the opportunity for people to reflect on their own worldview as they apply it to the scenario worlds being imagined that is the power of good scenario work. If the process dominates at the expense of expanding how people think and challenging their assumptions, the result will usually hold little real value for strategy purposes. We also risk responses like ‘well, we’ve tried scenarios once, and they don’t work’ – which is what one deputy vice-chancellor said to me when I indicated we were considering using scenario thinking. Scenarios that reinforce the status quo and don’t enable people to move into new thinking spaces are designs for failure.

Notwithstanding these warnings, scenario work done well is challenging and creative, it can expose participants to novel information and new ways of thinking about issues, identifying blindspots and shifting thinking beyond the conventional. Remember the bottom line is they are a tool, not an outcome.

My Approach

I was trained in the Global Business Network approach to scenario planning - the 2x2 matrix approach - and used that for some years before expanding my thinking in the last decade or so. This approach is usually quickly understood by people but it comes with a number of limitations including that it bounds our thinking and focuses on plausible futures. This is because, of course, the outcomes must be practical and usable in a strategic sense for the organisation. That said, this matrix approach when done well, and with a focus on shifting mindsets as an outcome, is useful. But the designers of this process at Shell also were seeking to change the thinking of people involved in the process, to bring the outside into their organisations and to include as many perspectives as possible in these strategic conversations. This guide is a detailed explanation of this GBN approach. I now also include elements of the Six Pillars approach which helps us to move deeper in our thinking and challenge our worldviews - to enable me to make our foresight capacity overt.

There are also a seemingly endless number of books about how to ‘do’ scenarios. The most useful ones are written by people who understand the need to seek not only images of possible futures in these images but also a mindset shift. Done well, scenario development will shift mindsets - it will generate moments that Andrew Curry describes well: “I mean those moments when a different insight emerges in the room, or a new way of interpreting the world.” Sadly, most processes focus on the scenarios and the strategic options identified as the aim rather than enabling people to reframe their understanding of the present - because it is this reframing that enables our perceptions of what options are available to us in the present to expand.

My Perspective

Scenarios done well are very a very useful way to think about futures. My only piece of advice is to please don’t just read a book and then run a scenario thinking exercise – it will be fun, but it will be ad hoc and superficial unless you are a very experienced facilitator. It would be better to get some formal training in the method or employ a good practitioner, or both. It does look deceptively simple to do, but the potential expansion and deepening of thinking that can emerge from scenario thinking is often impossible to achieve by those who don’t understand its desired outcomes. You need to take care selecting a scenario thinking consultant or firm too - you need someone who is committed to using the method well, rather than using it as a commercial tool.