How can you develop effective scenarios that capture key drivers of change?

One of the most productive scenarios to consider is that most processes/strategies are human-centric...even if technology (like AI) is at the core. As such, assume that standard human dynamics will apply. For example, consider what is the Organizational Speed Limit (OSL) of a company? That natural governor needs to be considered in any scenario that will involve humans (hint: that's all of them). If you can identify the variables in an OSL, you can do some reality based scenario modeling. Otherwise, scenario modeling becomes truly academic.

It’s not only about asking the right question but as well about challenging our perspective. Recent examples show what all we tend to ignore: September 11 was an event no-one was ever thinking about. The war in Ukraine believed not to happen. The attack of Hamas not a realistic scenario. We tend to be unprepared. Once you have built a scenario, challenge the assumptions. Repeatedly. If there’s nothing more you can imagine, probably you reached first time something near to reality. I have never seen a midterm planning predicting a war, a recession, disruptive effects. But we have seen recession every decade and disruption nearly every seven years.

You can also look at scenarios relative to your competition. How will the growth strategy of ‘x’ company impact our ability to maintain and grow market share vs. how the competitive landscape has impacted our brand so far. Or your customers-How have customer expectations changed how we shift priorities and what do those trends imply about how agility needs to be built into our strategy in collaboration with customers over the next several years?

Crafting compelling problem statements or focal questions is critical, but challenging. Strategic planners can construct these guiding questions by identifying driving forces, environmental changes, and uncertainties that could significantly impact the organisation. Next, they should frame these forces, changes, and uncertainties in a way that prompts exploration of alternative scenarios, challenging current assumptions, and considering a range of possibilities and potential responses or drawer plans. Thinking “How Might We…” is useful for my team in framing questions we should be looking at. Such “HMW” thinking is open-ended and forward-looking, thus encouraging creative and innovative thinking and potential insights.

It is our intuitive to explore scenarios now need to meet effective way of action. It’s expertise varies people to people as the ability to foresight and visualization. But beginning starts from ability and to expertise to how to level of required. Some other goals zero emissions, EV growth, financial inclusion, Etc

To develop effective scenarios that capture key drivers of change, follow these steps: Identify Key Drivers of Change: Select the most important and uncertain factors that can create different outcomes for your focal question- Prioritize key drivers of change using a two-by-two matrix Define assumptions clearly and establish relationships between drivers Develop Multiple Scenarios: Create scenarios around key issues to be addressed and evaluated Focus on material differences between scenarios Avoid developing too many scenarios – three is a good starting point

Make sure the collected data and Business / Corporate Model are in line with the industry trends and market competition. Sometimes organizations develop Strategy that is far away from industry trends and competition.

Seek input from external experts in relevant fields. Their insights can provide a valuable external perspective and help in identifying emerging trends and potential disruptors that might be overlooked internally.

Risk management is the way to go forward to define the uncertainties which will help further to develop. steps and strategies for all potential wanted and unwanted scenarios.

In developing scenarios, it's paramount to harness both creativity and strategic foresight. Consider employing narrative techniques that go beyond straightforward logic. Introduce elements of storytelling that evoke a visceral response, making the scenarios more relatable and memorable for your team. For instance, you can inject a human element by crafting personas that embody the potential impacts of each scenario. While scenario archetypes like growth, decline, transformation, or collapse provide a solid framework, don't shy away from hybrid scenarios that blend elements from multiple archetypes. After all, the goal is not just to present scenarios but to immerse your team in a compelling exploration of plausible futures.

If possible, quantify the potential impacts of each scenario using relevant metrics. Utilizing visual representations, such as graphs, charts, or diagrams helps to communicate the scenarios effectively.

The scenarios can be used further to inform strategic planning, risk assessment, and resource allocation. Encouraging a culture of thinking throughout the organization can help foster adaptability and resilience in the face of change.

Even we may believe in scenarios - future tends to be different. I would like to share one aspect, most likely forgotten: When I started my career in the chemical industry in the early nineties of last century, the German government sponsored the so-called Delphi project to develop scenarios and predict the future. I was thrilled, and begging to purchase such reports which have been incredible expensive. Every year, the best people in a discipline from academia and business met to describe the future. Every year, a report was issued. Around ten years later, one could look back to see the reliability of such predictions. The result was simple. If you want to understand what will not happen, ask the specialist. The Delphi project died

Further to consider: - Use storytelling techniques - Incorporate qualitative and quantitative data - Encourage participation and collaboration - Communicate scenarios effectively - Review and update scenarios regularly