Introduction To Scenario Planning 1196057080309944 4

This present moment
Used to be
The unimaginable
future
Stewart Brand
The Clock of the Long Now
An Introduction to
Scenario Planning
Foresight Methodologies Workshop
28 September 2003
Maree Conway
Welcome!
Who am I?
25+ years as a manager in tertiary education institutions.
Internal re-structure at Swinburne in 1999 appointed to
position of Director, Foresight, Planning and Review.
Foresight journey for both me and Swinburne.
Now strong interest in developing ways to embed foresight into
universities in particular, and organisations in general.
Practitioner focus how to ensure outcomes of foresight are
relevant to staff, and can be used by them.
Before we start
Suspend disbelief for a moment.
Imagine that you part of the senior executive
group at your institution you are meeting to
consider the future viability of your institution
which has been affected negatively by the Nelson
Reforms.
In walks Universitas, the renowned and proven
clairvoyant. She says:
You can ask me three questions about your future.
What would those three questions be?
Welcome!
Overview
What is Foresight?
The Scenario Planning Process
Implementing Scenario Planning in
Organisations
Close
Overview
An introduction to scenario planning within the
broad context of foresight.
Scenario planning is a foresight methodology it
helps make sense of an uncertain future.
The focus is on making better decisions.
Additional references so you can explore the
methodology after the workshop.
So, why do it?

The world is more complex than that envisaged
when many of our institutions were created, and
those institutions are now creaking, facing
significant new challenges and pressures.
It is tough to be a manager in a time of such
uncertainty.
Decisions taken today will have effects years into
the future, but in what sort of world?
Never mind the future, it is increasingly difficult
to discern trends and realities, and to make wellinformed decisions today!
So why do it?
The future is not pre-determined or predicable.
If it were, there would be no point in taking
action today, because it would have no effect on
the future.
Full information about the future is never
available.
It makes sense to look for ways to understand
the future to deal with uncertainty.
What is Foresight?
What is Foresight?
All our knowledge is about the past, but all our decisions
are about the future.
We create our future by what we do or dont do today; it
makes sense to try and understand as best we can what
that future might be like before we act.
Foresight is not prediction! It is about getting an idea
about what plausible futures might look like.
We are good at learning from the past; we need to learn
from the future as well we need to develop a history of
the future as we do a history of the past.
Why think about the future?

All our knowledge is about the past, but all
our decisions are about the future.
What we dont know we

dont know
What we
know we
dont know
What we
know
Most of what we need to know to make good

decisions today is outside our comprehension: we
dont even know its there.
Types of Futures
Possible - might happen
Plausible could happen
(future knowledge)
(current knowledge)
Probable - likely to happen

Preferable - want to happen
(current trends)
(value judgements)
Types of Futures
Possible
Wildcard
Scenario
Plausible
Probable
Preferable
Today
Time
Types of Futures
Plausible
(Deep Drivers)
Probable
(Trends)
Today
Time
What is Foresight?
So, foresight, put simply, is an approach to
thinking about the future which lets you:
free up your thinking beyond the here and now;
explore plausible futures (ie always more than one,
because the future is not pre-determined); and
think about implications for decision making today.
Foresight is a way of thinking that enhances our

understanding of our current and plausible
future strategic operating environment(s).
What is Foresight?
An attribute, competence or process that
attempts to broaden the boundaries of perception
by:
assessing the implications of present actions,
decisions etc.
detecting and avoiding problems before they occur
(early warning indicators)
considering the present implications of possible future
events (proactive strategy formulation)
envisioning aspects of desired futures (normative
scenarios)
Foresight, Strategy & Planning

Three inter-dependent but quite different elements:
Strategic Thinking
exploration, intuitive, synthesising, creative, inductive,
disruptive, incomplete/ambiguous info; generating options
Strategy Development
assessing options, examining choices, making decisions
and/or setting a destination or direction
Strategic Planning
implementation, analytical, deductive, making it happen,
getting things done, pragmatic, can do; actions
Foresight, Strategy & Planning

Foresight is a strategic thinking process, not
a strategic planning process.
Its about options not actions.
Asks the question: what might we need to
do?
not the questions: what will we do? or
how will we do it?
Inputs
Strategic Intelligence Scanning
Foresight
Outputs
Foresight Work
Expanded Perceptions
of Strategic Options
Copyright 2000 Joseph Voros
Strategy
Strategic Planning
Inputs
Interpretation
Prospection
Outputs
Foresight
Analysis
things happening
what seems to be happening?

whats really happening?
what might happen?
what might we need to do?
Strategy
what will we do?

how will we do it?
Foresight Process at Swinburne
Strategic Intelligence Scanning,

Near-Future Context
Inputs
Interpretation
Prospection
Outputs
Foresight
Analysis
Trends, Issues, Themes

Deep Drivers of Change
(System Structure / Dynamics)
Scenarios
Expanded Perceptions
of Strategic Options
Strategy
Strategic Planning
The Future as a Strategic

Landscape
The purpose of the organization
The Star
A future-focused role image

Not completed or used up
Our enduring and

guiding social role
The strategic objective:

A compelling, relevant future
BHAGBig Hairy Audacious Goal
A concrete, specific goal
A challenge, but achievable
The Mountain
What we hope to
achieve
The strategic environment:
The Chessboard
Strategic implementation and tactics

Threats and opportunities
Actions of other strategic actors
Driving forces
Mapped and understood using scenarios
Issues and challenges

we are likely to face
The Self
Our values and
attributes as a strategic
player
Star, mountain, chessboard, self image 1999
The self
journeys across
the chessboard
to the mountain,
which lies in the
medium term
future
Strategic identity:
Current reality
Self-knowledge
Strengths and weaknesses
Values
Preferences and experience
Synthesys Strategic Consulting Ltd
Foresight in Organisations
Foresight is a normal capacity of the human mind.
Everyone thinks about the future every day, and plans
ways to deal with the uncertainty inherent in that future.
BUT, that thinking is usually unconscious, and usually stays within
the brain of each person.
The challenge is to take it from being an implicit,

unconscious process taking place in a single mind to being
an explicit conscious process taking place in many minds
In other words, from implicit & unconscious to explicit &
conscious and from individual to collective.
In organisations, this requires explicit foresight processes

be created to support existing strategic processes.
Implementing Foresight
Five levels to implement foresight:
Level 1: recognition of foresight as an innate human
capacity every individual has the capacity for foresight
Level 2: immersion in foresight concepts using foresight
concepts and ideas to generate a futures discourse
Level 3: using foresight methodologies use of key
methods to make foresight real
Level 4: creating organisational niches permanent,
purpose-built areas to focus foresight
Level 5: foresight at the social level where long-term
thinking becomes the norm.
Richard Slaughter
Practical Strategic Foresight

Choose an appropriate method or two from each level.
Refine the flow of information leading from Inputs to
Strategy.
Aim for a deep foresight process.
Always Ask: Are our proposed strategic actions
wise when considered from a future
perspective?
The Goal: to act with wisdom in the present
informed by a perspective from the future, not only the
past.
Scenario Planning
What are Scenarios?

Scenarios are possible views of the world, described
in narrative form (stories) that provide a context in
which managers can make decisions.
By seeing a range of possible worlds, decisions will
be better informed, and a strategy based on this
knowledge and insight will be more likely to succeed.
Scenarios do not predict the future, but they do
illuminate the drivers of change: understanding them
can only help managers to take greater control of
their situation.
Gill Ringland
Scenarios in Business, 2002
Why Scenarios? (The Chessboard)

One of many foresight methodologies.
Well developed and tested across government,
business and education.
Provides structured process for people to start
consciously thinking about the longer-term future
and possible implications for strategy today (ie
navigating the chessboard).
A creative and shared process that allows time
for reflection about the organisation and its future.
Why Scenarios?
Scenarios strengthen a managers strategic
management tool box:
traditional methods focus on the past
scenario planning focuses on the future
Combining both the past and the future makes

thinking about strategy stronger and promotes:
responsiveness
flexibility
competitive advantage
Why Scenarios?
Scenarios allow a shared view of the future to be
developed, and then
Provide the opportunity for an organisation to
consider how it wants to position itself in that
future.
Why Scenarios? (Ranges of Usefulness)

U
Uncertainty
F
Predictability
Forecasting
Scenario Planning
Distance into the future
Hoping
t
Adapted from K. van der Heijden
Your turn
Imagine you are back in your senior executive
group meeting. Universitas, the clairvoyant, has
left, promising to return soon with a detailed
report on her findings.
As a group, you are now considering what you
think will be the most important, but uncertain,
external forces (drivers of change) that will affect
your institution over the next 10 years.
What are the top 3 drivers of external change on
your list?
Identify the focal question

Environmental scanning internal and external
Selecting drivers of change and ranking
Building the scenario matrix
Developing the scenarios
Presenting the scenarios
Considering the strategic implications

The Focal Question

Identify a focal area or issue such as a decision or
question that is critical to the future of your unit now.
Useful foci often emerge from major challenges of
today, or from questions such as what one question
would you ask a real psychic?
Choose a horizon year as the distance into the future
that the scenarios will extend (at least 10 years):
allows suspension of disbelief (the that wont happen
reaction);
will you be in the same job you are in today in 10 years?

Things Change ...

Inventions have long since reached their limit, and I
see no hope for future development: Roman engineer
Sextus Julius Frontinus, 1st Century AD
Heavier than air flying machines are not possible:

Lord Kelvin, President of the Royal Society, 1895
I think there is a world market for maybe 5

computers: Thomas Watson, Chairman of IBM, 1943
Space flight is hokum: Astronomer Royal, 1956
Stocks have reached what looks like a permanently
high plateau: Irving Fisher, Professor of Economics, Yale
University, 1929
Things Change ...

We dont like their sound, and guitar music is on the
way out: Decca Recording Co. rejecting The Beatles, 1962.
640K [of RAM] ought to be enough for anybody: Bill
Gates, 1981
The fact that conflicts with other countries [producing

civilian casualties] have been conducted away from
the U.S. homeland can be considered one of the more
fortunate aspects of the American experience:
Quadrennial Defense Review (QDR) for the US Dept of Defence, 2001
Inputs
Interpretation
Outputs
Foresight
Analysis
things happening
what seems to be happening?

whats really happening?
what might we need to do?
Strategy
what will we do?

how will we do it?
Whats Really Happening?
Foresight
Interpretation
Deep Drivers of Change

(System Dynamics/Structure)
News Items
Events
Recurring Themes
Patterns, Trends
Underlying Drivers
System Structure
Mindsets, Worldviews, Metaphors,

Myths
Core Human Intelligences

Levels of Structure
Mental Models
Thinking Systems
News Items
Events
Recurring Themes
Patterns, Trends
Underlying Drivers
System Structure
Mindsets, Worldviews, Metaphors,

Myths
Core Human Intelligences

Levels of Structure
Mental Models
Thinking Systems
Whats Really Happening?

The Interpretation step means the Prospection
step is better informed (in this case, the
scenarios you will develop).
So, look beneath the events, news items,
themes and trends for the deep drivers of
change.
Major Drivers of Change
Social
Technological
Economic
Environmental
Political
Major Drivers of Change

Globalisation
cheap travel & instant transfer of
information/communications, trans-national commerce,
student diversity
Economics
massification of education in OECD
percentage of population in post-compulsory education rising
rising funding costs to government
Technology
internet, online instruction, e-commerce, cost and complexity
of science
The knowledge project itself is changing

from dualist objectivism to participatory worldviews

Impact-Uncertainty
Classification
I
m
p
a
c
t
High
Mod
Low
Low
Moderate
Uncertainty
High
What is Uncertainty?
Low means we are reasonably certain that it
will play out or continue in ways that are fairly
well understood
eg. population
High means that we have no clear idea which

of a number of plausible ways it might go
eg. government legislation and policy
Mod means somewhere in between

Impact-Uncertainty
Classification
I
m
p
a
c
t
High
Critical
Planning
Issues
Important
Scenario
Drivers
Critical
Scenario
Drivers
Mod
Important
Planning
Issues
Important
Planning
Issues
Important
Scenario
Drivers
Monitor
Monitor & reassess
Low
Monitor
Low
Moderate
Uncertainty
High
Building the Scenario Matrix

High Impact, Low Uncertainty = predetermined
elements (or trends)
should be present in every scenario
High Impact, High Uncertainty = critical

uncertainty
choose the two most uncertain of these to create the
scenario matrix
And the blue drivers?

include in your scenarios if you like, & if it makes sense to,
particularly if you think that they will be significant in the
future.
Your turn
Take your 3 key internal issues (the clairvoyant
questions) and your 3 most important but
uncertain drivers of external change.
Plot them on your impact-uncertainty matrix.
Pick two from the upper right hand corner.
Building the Scenario

Matrix
Choose two drivers that are most uncertain
and most critical in terms of impact on your
organisation.
Critical Uncertainty 1
Building the Scenario

Matrix
World 2
World 1
Critical
Uncertainty 2
World 3
World 4

Developing the Scenarios

In a scenario workshop, small groups would
flesh out each world. The requirements for
this step are to suspend disbelief, trust your
intuition, look for plausibility, surprises and
novel elements.
Scenarios must be internally consistent and
plausible they have to make sense to the
people creating them, and to the people in the
organisation who will read them.
Your turn
Build your scenario matrix.
and
Consider what your worlds might look like.
Developing the Scenarios

What is the world like in your scenario in
2013?
How did your world develop? Stand in
2013 and look back over the major
events that have occurred; list the
events. Developing the timeline in 5
year intervals saves time, but you can
also simply prepare a list of the events
you think created your world.
Would your organisation exist in 2013?
What do you look like? Are you physical
or virtual? Global? Specialist? Major
characteristics of your customers?
What do staff do?
Title of Scenario
Be creative! Imagine a title that
describes the essence of your
world, and that is memorable.
Narrative the scenario story
Write up a paragraph or two to
describe your world (skip this if you
are running out of time).
Presentation
Decide how you will present your
scenario to the rest of the group.
Youll have about five minutes, so
focus on the key elements of your
world as they relate to tertiary
institutions.
Further Development
In a real-life project:
The first set of scenarios usually needs further
development and refinement.
Occurs over time, and is designed to make the
scenarios understandable to the organisation (to
deal with the fact that most staff wont be directly
involved in their development).

From Scenarios to Strategy

The Scenarios are not the only purpose of the
exercise!
the resulting freeing up of thinking while creating
them is!
Expanding understanding of what options

might be available in the long term:
shifts frame of reference 10-20 years out.
examining implications for the services provided by
your unit in each of the scenario worlds
looking to see what your unit would need to do to
stay viable

Main Uses for Scenarios
A common language for strategic conversations ongoing future-oriented discussions
Risk Assessment - specific decision

Strategy Evaluation - existing strategy
Strategy Development - new strategy

Scenarios provide clues about what might be
important drivers of change in the future, and how
those drivers might interact and affect the
organisation.
Aim is to identify strategies that are robust across all
scenarios, given what we know about how the future
might develop.
Also, to identify early warning indicators that events in
the scenarios are happening how will we respond?
Within the context of the focal question.
Approaches to Strategy
Robust - Perform well over the full range of scenarios
considered - Blue Chip
Flexible - Keep options open and / or wait for as long
as possible before committing - Hedging
Multiple Coverage - Pursue multiple strategies
simultaneously until future becomes clear Scattergun
Gambling - Select one strategy which works very
well, but in only one or two scenarios - Bet the Farm
Bet the Farm is the common

default
In the absence of well-developed set of
scenarios, single-point forecasting and / or a
reluctance to allow uncertainty (ie. the predict
and control mentality) leads to a (usually
unconscious) projection of an official future,
which is the one assumed to be coming ...
This approach is functionally equivalent to (and
an unconscious form of) the Gambling / Bet the
Farm approach
From Scenarios to Decision /

Strategy
The scenarios can help you to imagine the
consequences of different choices of decision /
strategy in each of the different scenario worlds
without having to live with the consequences

of a wrong decision or strategy for the rest of
your life!
Which of the types of decision / strategy do you
want to develop in the real world?

AND, ONE MORE!!
Suddenly, the World Changes ...

Wild Cards are low-probability, very-highimpact events that are
wide in scope and directly affect the human condition
potentially disruptive (negatively and/or positively)
intrinsically beyond the control of any single institution,
group or individual
rapidly moving
eg: asteroid impact; stock market collapse; terrorist

attack; disrupted water, gas or electricity supply; etc
Types of Futures
Possible
Wildcard
Scenario
Plausible
Probable
Preferable
Today
Time
Suddenly, the World Changes ...

If you dont think about Wild Cards before they
happen, then all of the value in thinking about
them is lost (horse has bolted / stable door).
If we accept that there will be Wild Cards in the near
future, then the only effective defence is to begin to
systematically think about them now, and examine
their implications.
Using Scenario Outputs

Does your organisations existing strategy stand up
to all of the future worlds presented in these
scenarios?
What rationale would you have for pursuing various
strategic options in each scenario? What can you
influence?
What early indicators will we monitor?
After considering the strategic implications of the
scenarios, what actions might we recommend?
Deciding on an implementation plan.
Your turn
Given your scenario worlds, and your brief
exploration about how those worlds might have
developed over time,
And, remembering your focal question,
What are the implications of your scenarios for
your institution today?
Would you still be in business? In what business?
Who are your customers and what do they want?
Where are the gaps in your knowledge? What do you
need to know more about?
Implementing Scenario Planning

In Organisations
Implementing Scenario
Planning
Implementing scenario planning is exciting for
those who do it it changes the way you think.
Need open minds, tolerance for ambiguity and
fishing expeditions.
Commitment to understanding the future better.
Implementation has to take place within broad
foresight framework scenario planning is a tool
to help improve thinking about the future, not an
end in itself.
Implementation
Organisations are changing
From
To
Command and control
Empowerment
Structured life
Unstructured life
Importance of size
Need for speed
Predictability
Uncertainty
Clarity
Ambiguity
Slow change
Rapid change and obsolescence
Reliance on processes
Reliance on people
Hierarchical or managed organisations
Alliances and coalitions
Avoiding risk
Managing risk
Traditional strategic planning processes are no

longer enough!
When to implement
When the power of the external environment is
great when the forces at work on an
organisation require outside-in thinking.
When the organisation needs a shared context;
shared vision; shared forward view.
When functional teams need to collaborate
working together on scenarios may held current
working relationships.
How to implement
Stage 1: Clarify your aims: why are you doing
this?
Stage 2: Engage stakeholders very important
spend time on this until you have buy-in
Stage 3: Understand the organisation
Stage 4: Timing of scenario projects
Stage 5: Developing scenarios
Stage 6: Communicating the scenarios
Stage 7: Using the scenarios in planning and
policy development
Stage 1: Clarify your aims

Why are you doing this?
Introduce foresight into the organisation as strategic
management tool?
Inform strategic thinking and decision-making?
Test existing strategies?
A one-off strategic exercise?
Stage 2: Engage Stakeholders

Identify who will drive the process.
Who needs to be consulted internally and externally?
Take the time to engage these stakeholders so they are
familiar with the process, its aims and expected
outcomes.
Address concerns about value of scenarios and how
they will be used in decision-making/planning.
Subjective tool, but allows discussion and challenges to
assumptions and judgements made during this process.
Stage 3: Timing is everything

Is the organisation seeking input on future directions, or
the development of a shared vision to underpin
decisions?
Can the outputs be used in a strategic planning round, or
decision making?
Is the organisation facing specific challenges?
Chaotic external environment what are emerging patterns?
Critical decisions to be made, including choices between new
areas of activity how to decide?
Business plans not being met are the assumptions still valid?
Change in traditional markets threatens services?
Stage 4: Understand the

Organisation
Can the project be resourced?

Who might oppose the project?
Who needs to be convinced of its value?
Who can you work with to apply the scenarios in
the organisation?
What will be the scope of the project, including
what time frame what will work for the
organisation?
Who will be involved in the project?
PITCH
MESSAGE
HERE
Stage 4: Understand the

Organisation
Pragmatists
Fence-Sitters
RATS
Bridge Builders
FROGS
- can smell the
- get it, and can use the

system, very rare
cheese, but jump

ship; they have good
organisational
diagnostics
Get It
Dont Get It
Laggards
VULTURES
True
Believers
LEMMINGS
- dont bother,
they are looking
for you to fail
Ideologues
Adapted from Andy

Hines, 2002
Stage 5: Developing Scenarios

Look at other scenarios first
Get some idea of whats involved
You may be able to use those scenarios as a starting
point to save time
Process needs to be tailored for each project.

Spend time on familiarising participants with future
thinking.
The process itself can take one day, or six months!
Decide whether to use external facilitators.
Stage 6: Communicating the

Scenarios
Who is the target audience?
Who are decision makers and who are
influencers?
Who will benefit and who will lose under each
scenario? How can their needs be met?
What channel can be used to reach the target
audience?
What events are critical in the time sequence?
What are the success criteria what do we stop?
Stage 7: Using the scenarios

Scenarios are only valuable if they are used by the
organisation it is the use of the scenarios not their
existence which is important.
To use the scenarios you have to pay attention to
dissemination tools and techniques.
You need people willing to test the scenarios in a real life
situation.
Use the scenarios to identify emerging trends and
discontinuities early indicators of change.
Use the scenarios to develop awareness of challenges
facing the organisation.
But, remember
Every organisation is different.
The process needs to be contextualised use
existing scenarios with great care and recognise
they will need to be adapted for the organisation.
Take heed of organisational culture and
processes.
This will take time, and a lot of energy and
persistence.
Watch out for

Believing what we want to believe and not paying attention
The tyranny of the present
Asking the right question: what will force us to think
differently?
Overestimating ability to control the future
The need to present a point of view
The unreliability of experts & the value of innocent eyes
Not taking the time needed to do a good analysis
Assumptions and the illusion of certainty
Gill Ringland,
Scenarios in Business, 2002
Close
Thank You!
Thank you for your time, energy and insights!
We hope the process has been useful, eyeopening and mind-expanding for you, and will be
valuable for your future planning!
Complete the evaluation and tell us what you
think.
Enjoy your strategic conversations!
Future and Present

We shall not cease from exploration
And the end of all our exploring
Will be to arrive where we started
And know the place for the first time.
Little Gidding V
Four Quartets
T.S. Eliot (1943)

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This present moment

The Clock of the Long Now

What would those three questions be?

So, why do it?

Why think about the future?

What we dont know we

Most of what we need to know to make good

Probable - likely to happen

Foresight is a way of thinking that enhances our

Foresight, Strategy & Planning

Foresight, Strategy & Planning

Strategic Intelligence Scanning

Copyright 2000 Joseph Voros

what seems to be happening?

Copyright 2000 Joseph Voros

what will we do?

Foresight Process at Swinburne

Strategic Intelligence Scanning,

Trends, Issues, Themes

Copyright 2000 Joseph Voros

The Future as a Strategic

The purpose of the organization

A future-focused role image

Our enduring and

The strategic objective:

The strategic environment:

Strategic implementation and tactics

Issues and challenges

Star, mountain, chessboard, self image 1999

The challenge is to take it from being an implicit,

In organisations, this requires explicit foresight processes

Practical Strategic Foresight

What are Scenarios?

Why Scenarios? (The Chessboard)

Combining both the past and the future makes

Why Scenarios? (Ranges of Usefulness)

Adapted from K. van der Heijden

The Scenario Planning Process

Identify the focal question

The Scenario Planning Process

Identify the focal question

The Focal Question

The Scenario Planning Process

Identify the focal question

Things Change ...

Heavier than air flying machines are not possible:

I think there is a world market for maybe 5

Things Change ...

The fact that conflicts with other countries [producing

what seems to be happening?

what might we need to do?

Copyright 2000 Joseph Voros

what will we do?

Whats Really Happening?

Copyright 2000 Joseph Voros

Deep Drivers of Change

Mindsets, Worldviews, Metaphors,

Core Human Intelligences

Mindsets, Worldviews, Metaphors,

Core Human Intelligences

Whats Really Happening?

Major Drivers of Change

Major Drivers of Change