FT6 Scenario building basics

A scenario is a story that describes a vision of a possible future or aspects of that possible future. Building the scenario helps us to visualize the impacts of change. Scenarios are not predictions about the future, but more like simulations of some possible futures.

Roy Amara reminds us that

The future is unpredictable
The future is not predetermined
Our choices have impacts on the future
(Roy Amara, IFTF)

This means that scenarios can help us shape the future by seeing the potential impact of the choices we make in the here and now. The process for doing this is as follows:

  • We analyze the PESTE variables
  • Establish our key drivers
  • Build scenarios
  • Create visionary concepts that allow us to capitalize on the opportunities and avoid the threats
  • Design steps towards realizing the visionary concept and desired future

Earlier you learned how to carry out a PESTE analysis. Now we need to establish the key drivers we will work with. These two drivers will form X and Y axes in our fourfold table where we will draft our alternative scenarios. You need to select two drivers that you feel will be key to the future in your sector and region.

You can download the MOTION template for scenario building from the extra material module. The fourfold table and scenario building helps you to develop scenario alternatives for the future. It provides a test bed for various combinations of key drivers to imagine all the possible future worlds. It is important to accept that there is no exact rule to make a choice for the X and Y axes among the key variables; rather it requires curiosity and enthusiasm to test it with different variables with their extreme end values among trends and wild cards.

To build the scenarios, you need to define the extremes for each driver and their end values; from this you can create four scenario drafts, one for each quarter.

Name each scenario. Names for the scenarios are important as they form a language to discuss the future. It can be helpful to keep them short, so that they are easy to remember. It is also useful if you find a metaphor from movies or books to make them more concrete so that people can connect with them emotionally.

It is important to reach a common understanding of each scenario. Think of it like an elevator pitch for a movie – how can you describe the scenario in a quick and clear way? If you are working with a team discuss it between the team members; if not, try it out on someone. Sometimes you may have to rename the scenarios after this type of discussion, but that is ok. What is important is getting a final agreed understanding before using the scenarios in practice.

Once you are happy with your drivers and have names and descriptions for your scenarios, we can move on to the next stage. With the inspiration of section (video duration 5:04), you can build scenarios presenting possible futures in relation to the drivers and trends identified.