Scenario development tool

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Question - why should you explore the future?

Answer - to:

1. gain a better understanding of the present
2. develop a more differentiated value proposition
3. anticipate future trends

Key points

Long term, or scenario planning, is a contentious area.

Some people love it. Others hate it, labelling it as "fantasy planning".

Most organisations spend very little time doing it, and pay even less attention to the results. This may be unfortunate as the globally competitive nature of markets today demands far greater boldness, and differentiation of strategy, than ever before. If you are in any doubt of this, you may wish to read "Blue Ocean Strategy", by W. Chan Kim and Renée Mauborgne.

Large predators cannot profitably work the same territory and, if you are a small or medium player, you need to have the terrain clearly mapped out if you are surrounded by major players all fighting over the same patch as each other, and you.

Our view is that, at the very least, scenario development gives you a better insight into the market situation as it exists today, and so is worth doing on that account alone.

We would tend to avoid an overly detailed process, except when working alongside teams that are highly experienced in scenario development techniques and outcomes.

So, what we are offering you here is a light process (although when you scan through the number of worksheets, you may not think so).

It is also only half of the full scenario planning process. It stops at the exciting bit: what are the implications of likely future developments, and how should you adjust your strategy accordingly?

This is covered by our Quick or Long-Term Planning tool.

For a more detailed description of the scenario planning process, click here.

You should also employ a range of creative problem solving techniques throughout the process to maintain the momentum, and challenge conventional thinking. To get more insight into these tools, click here.

In more detail

Scenario/ future planning is about exploring the future and, in so doing, gaining insights into what is happening today, and what might happen next.

The key steps in a scenario development process are:

1. Defining the scope: there must be a clear understanding within the team of the scope of the exercise, otherwise the team may become paralysed with confusion. The Scenario development process is actually quite unnerving for people who are uncomfortable with ambiguity/fantasy
2. Present analysis: what are the key landmarks of the situation today? Brainstorm, using Post-it® Notes.
3. Past analysis: according to whether you will be looking 2 / 5 /10 /20 years out, what was happening 2 /5 /10 / 20 years ago? This puts future expectations into perspective. We tend to believe that the future will come at us much faster than it usually does.
4. Future analysis: what is likely to be happening in 2 / 5 /10 /20 years' time?
5. Impact: of those things that will probably be happening in 2 / 5 /10 /20 years' time, how likely are they to happen, and how big an impact will they have when they do?
6. Drivers: what are the common trends deemed to be driving future developments?
7. Mini-scenarios: each member of the team should write a short news story based around two of the drivers interacting. What are the key themes that emerge?
8. Differentiators: the future could "jump" different ways, or create different segments/sectors. Which factors will determine the different potential outcomes?
9. Major scenarios: define and elaborate three potential scenarios. Each scenario should be significantly different from the other. You may believe that all three scenarios are equally likely to happen, in which case you are defining/elaborating three different segments/sectors.
10. Events scenarios: explore the three major scenarios in terms of their key features, and how they are likely to develop over the short / medium /long term.

This exercise tests the credibility of each scenario. When you believe you have a credible scenario development, explore the cross-impacts of the features, which will both elucidate the scenario, and "bullet-proof" your prediction.

The final steps in a scenario planning process fall into "Long-term planning", which is covered by our Quick or Long-Term Planning tool.

This tool can be bought separately here.

It also makes up part of our broader “Innovation” training e-package which comprises an e-booklet and nine of our new product / service development tools. To find out more, please click here.

© 2006, Mud Valley ™ brand marketing community.

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