I am A CEO, Talk about Entrepreneurship, Strategy, Operations & Management

Scenario planning is one of the effective tool to analyze future prospective of your business. But that doesn’t mean that forecasting the future,  it is looking at all the possibilities of the future.

Your requirement to conduct Scenario planning

• Good team (5 – 8 members) who can think diversely
• Get 2 different colored of “Post It” notes (For instance Yellow & light blue)
• White board

Stage 1

Appoint a Facilitator, if possible make it external facilitator so that he can have neutral opinion about the problems.

Identifying knowledge gaps.

Knowledge gaps are likely to be in strategic nature in organizational level. This is the identification of issue in the organization or the project which may create critical impact on the organization or for the project, which is an uncertainty which may have severe impact over time. If you can categorize and create uncertainties according to social, technological, economic, ecological, political, legal it will be really great.

Note down all the uncertainties in yellow post it. This is basically the brainstorming process, wherein all the team members identify uncertainties. The most important thing while identifying uncertainties is be clear about the uncertainty, that means don’t write an ambiguous uncertainty.

Stage 2

Exploring the scenario context

First thing to do in this stage is interviewing the team members. Ask questions about the problems in the order of Future, Present & Past. Record their feedback, this should be comprehensive and accurate. Collate and analyze the result of interview process prepare a good report, set your agenda and circulate it. The next process is very critical, invite remarkable people to see the report and check the validity of the assumptions and criteria’s which taken into consideration.

Stage 3

Developing the scenario scripts

In this stage team should identify the driving forces and test its outcome. Driving forces are major source of change that impact future it can be  either predictable or unpredictable. Individual members in the team records those driving forces in “postits” and also for each driving forces, record 2 polar outcomes. The driving forces and outcomes should be numbered in such a way so that we can easily be clustered later. The fundamental thing to be take care while identifying driving forces is the ambiguity of the driving forces it should be unambiguous, that means anyone can understand the uncertainty in a single reading and make a sense of single meaning.

The next process is to clutter the related driving forces from the driving forces that are contributed by the team member. Name the clusters using short titles, again make sure that it should be unambiguous and also the title should encapsulate the full content of the cluster. The next process is to draw “cause and effect” relationships between the driving forces inside each clusters. If any of the uncertainty cannot be linked with any “cause and effect” relationships, then it does not belongs to the particular cluster.

The next process is to rank the cluster headings in a high / low impact and high / low predictability in a 2 dimensional space. This should be done asking everyone in the team to rank according to them. A simple debate can be done to identify the positions of cluster name in the 2×2 dimensional matrix space. After the ranking, select 2 (A & B) cluster name which is believed to have a highest impact on the business problem and also highest level of uncertainty over the potential outcome.

After selecting two scenario dimension A & B do a brainstorm and name all 4 possible futures according to the scenario dimension selected and record it in a 2×2 dimensional matrix space. Include all the polar outcomes we recorded for all the driving force in appropriate 4 future space. This require some brainstorming and agreement between team members.

Split the team into four groups and each group design any of the story line. The task is to produce logical “cause and effect” relationship using the outcomes and design the future of the business problem, the outcomes should be interlinked with cause and effect relationship. Present the story line to other team members and argue and test the logic.

Stage 4

Do Stakeholder Analysis

Test the understanding of the business problem with the stakeholders. Stakeholders are people who are interlinked with the business problem. For eg: If we are doing a scenario planning for the growth of the country, stakeholders includes Ministers, common people, professionals, scientists economist etc. Describe the story line to them and check the logic of the story lines. Refine the story line if there is any logical mistakes or go ahead to the next stage.

Stage 5

Iceberg analysis

The iceberg analysis is a three level analysis of the events. At the top level the event itself and at the second level which are the trends and pattern which may cause the event and the bottom level shapes the trends and pattern with a high level of consistency.

Stage 6

Impact organizational thinking and acting

Execute the different strategies according to the scenario designed by the team in the organization. Change management is very important in implementing strategies in the organization. Employees might not welcome all the changes imparted to them. It is easy for the companies that follow agile operations strategy to implement change management.

The scenario planning process cannot be explained from a blog post, but I think this post will be useful to start off. You can use this report also. For more reference read the book “The Sixth Sense” by Kees van der Heijden, Ron Bradfield, George Burt, George Cairns & George Wright.