Want to keep learning?

This content is taken from the University of Stellenbosch Business School Executive Development's online course, Futurism and Business: Dealing with Complexity. Join the course to learn more.

Skip to 0 minutes and 6 seconds Phase 1 is identifying the scenario field. It’s very important, often underestimated. But before we embark upon the exercise, we have to ask ourselves some very important questions, such as what is the issue? What’s keeping us awake at night? What future concern or issue is of paramount interest? Why are we doing the exercise? What’s the topic? We have to ask ourselves what is the exact nature? Let’s analyze the problem we want to deal with. That enables us, as I say, to define the scenario field. In addition, along with that we must also reach consensus of what time period we are looking at.

Skip to 0 minutes and 53 seconds Are we’re looking at this problem in a five year’s time or in 10 year’s time or in 30 year’s time? That will also, that choice, that decision, will also mold and shape the way we proceed with our scenario exercise. So in a nutshell, Phase 1, crucial. Why are we doing this? And for what time frame are we doing it?

Skip to 1 minute and 21 seconds Having established why we’re doing the exercise, the next important step is to, as a scenario team, identify the key factors. In other words, those forces that in our opinion as a scenario team, were the major bearing of the outcome of the issue identified. Now by now we know, and now hopefully you can see, why we mentioned earlier things such a scanning the environment. We look for these driving forces. We look for these key factors. There we go again, the world of economics, the world of politics, the world of technology. We look from anywhere and everywhere.

Skip to 1 minute and 57 seconds Any factor, any trend, any development, which in our opinion as a team will have a bearing on the issue we’ve identified and the time frame that we have also agreed upon. As we call it, factual identification. There’s no real science behind this. Very often, as we shall see later on in the illustration, you invite the scenario team members to write whatever they want down on a piece of paper, piece of sticky paper, stick it on a wall. And then we rearrange those pieces of paper as I shall illustrate at a later stage.

Skip to 2 minutes and 36 seconds Phase 2 of the process was essentially identifying the key factors. The next phase is actually of a two-fold nature. We now need to distinguish between what we call key certainties and key uncertainties. So we take a look at the factors we’ve identified. And then, first of all establish, which of these are very important. Which are important in terms of our scenario topic and the time frame being considered. Some of these factors we’re going to call certainties, others we’re going to call uncertainties. A certainty– well as you know, in the world of futures thinking, there are no real certainties– but within reason, which factors do we think are fairly likely to occur over the next few years or decades?

Skip to 3 minutes and 22 seconds And which are also important? Those are key factors. The key uncertainties are, again, very important. But we’re not really sure exactly how they’re going to pan out in the years and decades that lie ahead. We think back to our little example of the dog early on in this learning unit. The two key uncertainties identified there were first of all the dog’s behavior. And you might recall whether the dog was or was not going to run into the road. That would have had a major bearing on the future of this little car episode. And the other key uncertainty was the behavior of oncoming traffic.

Skip to 4 minutes and 0 seconds Once again, we weren’t able to say with any certainty what exactly is going to happen to the car or what the cars are going to do. But what we did know was if there was going to be no oncoming traffic, we would have one outcome. If there would be oncoming traffic, another kind of outcome. That’s what we mean by key uncertainties. They are sometimes known. And we don’t all agree with this description as wild cards. As opposed to key certainties, sometimes known as rules of the game. So this phase is where the scenario team debates these things. They spend some time thinking about these things. They have to reach consensus as to which two key uncertainties are the chosen ones.

Skip to 4 minutes and 42 seconds And as we are going to see in Phase 4, if we can correctly identify the key uncertainties, we are well on our way to generating, ultimately, four scenarios.

Skip to 4 minutes and 56 seconds The fourth phase in the process is coming up with a set of scenarios. Now in Phase 3, we very clearly identify two key uncertainties. These are now used to come up with, in this particular approach, four different scenarios. So as you’ve discovered by now, think back to the little example of the dog. The one key uncertainty is used in the horizontal axis and the other one in the vertical axis. And in so doing, we end up with four possible scenarios. Of course, it is always important that the four scenarios we come up with are plausible. So it’s important to test each combination, make sure that you do feel as a scenario group that they are possible.

Skip to 5 minutes and 38 seconds That doesn’t mean to say that we are making any comment about how likely they are or for that matter, how desirable they are. We are simply asking ourselves is it plausible that we could identify and play around with these four scenarios? On this point, people often ask what is the ideal number of scenarios. Of course there is no 100% correct answer. Experience has taught us that too many scenarios might be overwhelming for most people. Now what is too many? Probably more than four or five. By the same token, too few really just confine your funnel of thinking. The problem two scenarios is the human mind will often say, well there are two scenarios, best case or worst case, and accept.

Skip to 6 minutes and 27 seconds The problem with three scenarios is there’s a best case in people’s minds, a worst case, and one in the middle. And the risk is that people might zoom in on the one in the middle. And that’s defeating the purpose. The whole idea of a scenario exercise is to consider all possibilities. We don’t want people to zoom in on one or two of those. So we often find that four is a practical, usable, useful number of scenarios. As you see, in this methodology we’re going through, automatically yields four different scenarios. Also important at this stage is for the scenario team to give each scenario a useful, short, sweet title.

Skip to 7 minutes and 9 seconds And the idea is that a well chosen title should give to the reader a good idea of what to expect in that scenario. I’m afraid there’s no science behind choosing a title. It’s more of an art than a science. This is where the combined effort of the team has to be creative, and innovative, and come up with something catchy and something descriptive. You often find that scenarios are based on movie titles or songs titles or animals or plants. There’s really no particular rule in that regard.

Skip to 7 minutes and 44 seconds This phase in the generic scenario process is what is known as scenario transfer. A very impressive sounding word. It’s really doing something useful to the scenarios. In other words, what are we going to do with them to make them useful and to make them meaningful? And there are various possibilities here. Not the least of which is writing up the scenarios and communicating to the ultimate users. Now the art of writing a scenario is exactly that. It’s an art. There’s no way I could teach you how to write a scenario. You have to use your common sense. You take note of the audience you want to address.

Skip to 8 minutes and 20 seconds Sometimes the audience might like to have the scenarios described in the form of note or bullet points or something as simple as that. At other times, they might want a narrative, actual story. I once came across examples of people using cartoon strips to illustrate a scenario, and even adjust to a theater. You have to read your audience and decide which technique is the best way of putting across the message. But that’s not the end of it. The next important question is regarding scenario transfer, what are the users going to do with it? And there are various possibilities. They might use it to, as we said a bit earlier, to formulate a strategy.

Skip to 8 minutes and 58 seconds They might use it to identify a particularly important events which might be hidden away in the scenarios and yet have a major bearing on the future. And from that, it might be useful to identify strategic interventions. So for instance, one of the scenarios might be the very, very ideal one with happy outcome. If you ask yourself, well what do we need to do to achieve this happy outcome? Who needs to do what? What actions need to be taken. It can be used to identify, what we call, milestones. In other words, what are the chief crucial factors we should identify and monitor over the next few years which in turn will have a bearing on the ultimate future outcome.

Skip to 9 minutes and 42 seconds So it would be an awful waste of time and effort if people were to come up with scenarios and then foul them. They must be used. They must be used in a sensible fashion. And communicating the scenarios is an important part of all of that. A little bit later on in this learning unit, I’ll be showing you one or two examples of actual scenarios. And we shall revisit all of these points, including possible ways of presenting the scenarios and communicating them to the ultimate users.

The five phases of scenarios

In this video we will discuss the five phases of a scenario.

Phase one is to identify your scenarios, which you did for your flower in the previous steps.

Phase two is to come up with your potential driving forces and phase three is to distinguish between your key certainties and uncertainties

After you have watched the video, consider the driving forces that you believe will have a bearing on your flower. You can select these drivers from any area. They might be economically based, politically based or socially based.

The next step, and in some way the most challenging step, is to distinguish between key certainties and key uncertainties for your flower scenario.

Share this video:

This video is from the free online course:

Futurism and Business: Dealing with Complexity

University of Stellenbosch Business School Executive Development