TRANSFORMING CAPABILITY SUPPORT MATERIALSLEADING VISION CREATION

Scenario Planning

Introduction Scenario Planning has its origins in the Shell organisation where it was used to develop long term views of the oil and gas sector, especially after the oil price rise in 1974. Used as part of a vision creation process, scenario planning can provide “a view of how different forces can manipulate the future in a different direction” (Turner, 2002). Scenario Planning is a strategic planning method that some organisations use to make flexible long-term plans, it is an attempt to build plausible views of a small number of different possible futures for an organisation operating in conditions of high uncertainty. “Scenario Planning is a method for learning about the future by understanding the nature and impact of the most uncertain and important driving forces affecting our future. It is a group process which encourages knowledge exchange and development of mutual deeper understanding of central issues important to the future of your business. The goal is to craft a number of diverging stories by extrapolating uncertain and heavily influencing driving forces” (http://www.well.com/~mb/scenario/).

Example

The Scotland 2020 project (www.demos.co.uk/files/Scotland2020.pdf) launched with a scenario building workshop which brought together people with a wide range of knowledge and experience to think imaginatively about the future of Scotland and devise 3 possible scenarios. After exploring some key trends in Scotland the participants were divided into three groups, each of which was asked to develop a scenario for Scotland in 2020 according to certain criteria:

•The ticking tartan time bomb - The 'hands off' scenarios considers what Scotland might look like in 2020 if the current trends continue without any intervention to change their course.   

•Scotland - A sustainable state? - The 'hands on' scenario explores what Scotland might look like in 2020 if the nation renewed itself organically from within. 

•Divided Scotland elects a Nationalist Thatcher - The 'everything's up for grabs' scenario imagines what Scotland might look like in 2020 in the event of a radical political transformation.

Once completed, they formed the basis for a second workshop session to create a 'preferred scenario'.

The time taken to undertake scenario analysis differs depending on the scope of the activity. When developing a vision for an entire organisation the team should be cross functional, ideally including external input.  Further information: http://www.jiscinfonet.ac.uk/tools/scenario-planning - Step by step guide to Scenario Planning  Turner, S., 2002, ‘Tools for Success: A Manager Guide’, McGraw Hill Professional, Berkshire, UK

TRANSFORMING CAPABILITY SUPPORT MATERIALSLEADING VISION CREATION

Scenario Planning

Instructions A detailed step-by step guide to using the Scenario Planning tool is available at: http://www.jiscinfonet.ac.uk/tools/scenario-planning Included below is a summary of the key steps involved in Scenario Planning. The templates below may be used to record the results of Steps 1-4 and Step 5 respectively. 1.ScopingIdentify the key focal issue or concern – this can either be broad, e.g. what will the future be for this industry? Or specific, e.g. how will competitor activity impact on growth opportunities?Identify the time horizon for the scenarios (usually 5-10 years) 2.Trend AnalysisIdentify the primary driving forces at work in the present concentrating on the external factors over which the organisation has little control (usually based around political, economic, social dynamics, technological, legal and environmental issues). (see PESTLE) Identify which of the forces are critical to the focal issue – identify the most uncertain and important forces 3.Build Scenarios Utilise these uncertain and important forces to develop a small number of diverging future scenariosAgree on the scenarios to be developed (between 2 and 4) 4.Generate OptionsDevelop the scenario detail, linking it to the current state of the industryBrainstorm the options available for the business within each scenario – innovation, new opportunities etc. 5.Test OptionsIdentify and discuss potential implications & impacts of scenarios on each of the identified optionsUse the scenario grid provided to record whether the scenarios identified will result in positive or negative consequences for each of the business options (use a 5 point scale: ++, +, 0, -, - - ). 6.Action PlanUse the scenarios and options available within them to identify plans which make sense across all divergent futures

TRANSFORMING CAPABILITY SUPPORT MATERIALSLEADING VISION CREATION

Key Focal Issue

Time Horizon

Political Issues

Economic Issues

Social Dynamics

Technological Issues

Legal Issues

Environmental Issues

Scenarios to be Developed

1

2

3

4

Business Options / Opportunities

1

2

3

4

5

6

7

Scenario Planning

TRANSFORMING CAPABILITY SUPPORT MATERIALSLEADING VISION CREATION

Scenario Planning

Scenario/ Option Grid Record whether the scenarios identified will result in positive or negative consequences for each of the business options (use a 5 point scale: ++, +, 0, -, - - ).

Business Options/ Opportunities

Scenarios

Scenario 1: Scenario 2: Scenario 3: Scenario 4:

Option 1:

Option 2:

Option 3:

Option 4:

Option 5:

Option 6:

Option 7:

Option 8: