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Scenario Development

At The Arlington Institute we do scenarios. We build them for our clients in various shapes and colors, for we believe that they are the most effective tool currently available for systematically considering the future. Some of our clients want to know about the future of their marketplace, or a major contributing factor to their operating environment, like technology. Others are concerned about possible big surprise events - wild cards - that might blow in unexpectedly and fundamentally shift the status quo. Perhaps your concern is a geographic area - like Africa, or you are considering the purchase of a major asset and want to have a sense of what might change the present situation that makes that a good decision - all of these are good candidates for scenario planning. Scenarios can also be used as the basis for developing an organizational vision - a particularly powerful role.

 

Why scenarios?

People try to think about the future in quite a variety of ways. Some try to predict what might happen. Others make forecasts or projections. Some extrapolate trends. But all of these approaches have fundamental flaws: it is impossible to predict the future (at least at this time). One can go to the fundamental mathematics of the situation and find that in highly complex situations, a very minor change in the initial conditions (or of some element during the evolving process) will result in major shifts in the end point. It is essentially impossible to identify and catalog the relationships of all of the potential contributing factors at any one time, so similarly, it is impossible to anticipate the future that will arrive with any level of confidence.

So what do you do if you want to systematically look at the future? Right now, the best answer is scenarios - rigorously designed mental images of the most significant likely possibilities that might evolve, developed around specific issues that are most important to you or your organization. This process, if done well, will essentially produce a spectrum of plausible futures that effectively brackets the horizon. You will be able to see before you most, if not all, of the likely big possible situations.

So armed, the effective strategist can then begin to consider the potential implications of each future world, and begin to put into place the contingency plans for dealing with both the opportunities and hazards that might arrive. This alone is usually worth the price of admission, for it quickly illuminates one’s perspective and immediately provides a larger, sophisticated, future-oriented context for evaluating day-to-day events. News stories are suddenly seen in a different light - as possible contributing factors for one or more plausible futures.

As is the case in other disciplines as well, a significant amount of the value of scenario building resides in the process rather than the product. That is, in developing a rich perspective of what might happen, one systematically identifies and confronts the majority of the active players that influence the life of an organization and considers what the roles and potential impact are for each of them as they interact with all of the others. Changes in government regulation, international economic health, technological breakthroughs, social value shifts, environmental and population pressures - all are considered at the same time. That is something most of us don’t get a chance to do very often, so it is guaranteed to be loaded with enlightenment.

Again, since you can’t predict the future, it is unlikely that any of the scenarios will evolve in quite the form that was considered. What will actually happen is some of one future and part of another . . . but having considered all of the possibilities before the fact, the effective scenarist will immediately recognize the evolving future in terms that are familiar and significant. The future has order when seen in this way. It is not just a random emergence of events.

Perhaps the most powerful scenario variant is the normative scenario, or desired future. After completing the process of developing an initial set of scenarios the strategist can look across the spectrum of possible futures and begin to develop an image of the future that is particularly desired. This normative future can be systematically designed and shaped to an organization’s specific capabilities and resources and therefore become a very pivotal device for helping individuals to “see” what they can become. This story of the future puts a face on an otherwise abstract set of objectives. Instead of simply having a goal of say, a sustainable economy, a good scenario paints the picture of what a world would look like that was truly sustainable - what the players would do, what would be the results, etc. These images can be communicated, of course, using video, film, and multimedia.

A well-crafted normative scenario allows an organization to become proactive, working specifically for their desired future, rather than sitting by and passively waiting for what ever the world delivers. It is a tool for allowing individuals and organizations to “create their own future,” a perspective that is often an epiphany for the participants.