Working with scenario method using Scenario Thinking: Practical approaches to the future by George Wright and George Cairns             Scenario Process Workbook Volume 2 – Working with the ‘Augmented Methods’     George Cairns and George Wright

Why should the individual and organization practice scenario thinking? “Scenario thinking offers a way for individuals and groups to face up to the threats and opportunities of the future and to their potential impact upon the organization or community.” (Wright and Cairns, 2011: p.1)

Aims of ‘scenario thinking’ “Scenario thinking can facilitate ‘vigilance’ in strategic thinking – in that alternative futures are thought through and strategic options can subsequently be evaluated against these futures. The process of scenario thinking enhances the evaluation and integration of information and promotes contingency planning for unfolding of both favorable and unfavorable futures.” (Wright and Cairns, 2011: p.8)

Aims of scenario thinking To apply an approach of ‘intuitive logics’ (Jungermann and Thuring, 1987) to make sense of complexity and ambiguity in terms of possibility and plausibility To explore the interrelationships between multiple factors in terms of cause/effect and chronology and to realise that the possibilities are not unlimited To understand that whilst the future is largely unpredictable and unknown, it is also largely knowable and understandable Not to predict ‘the future’, but to better understand the present To provide a framework for better informed decision making

Aims of ‘scenario thinking’ “A major focus is on how the future might evolve from today’s point-in-time to the horizon year of the scenario – say 15-20 years hence. Scenario thinking analyses the relationships between: the critical uncertainties (as they resolve themselves); important predetermined trends (such as demographics), and the behavior of actors who have a stake in the particular future (who tend to act to preserve and enhance their own interests)” (Wright and Cairns, 2011: p.9)

Ground rules for team-based scenario projects Adopting a ‘round robin’ approach, where each member gets to present a single relevant idea in turn, with individuals dropping out as ideas are exhausted Accepting and agreeing that no idea can be challenged or excluded on the basis that it is ‘wrong’ or ‘nonsense’ Allowing only questions of clarification, such as ‘Why do you think that…?’, ‘What would happen if…?’, ‘Who do you think would…?’ Holding a truly democratic forum that invites creativity, innovation and fresh ideas

Stage 1 – Setting the scenario agenda What is the key ‘focal issue of concern’ facing the members over the next 5,10, 15 years? What is currently causing inaction and inertia? What confusion exists that prevents a unified focus on strategic planning and action? What keeps you awake at night? As a group, agree the single most important issue that causes uncertainty about the future and define it in a few words: e.g. ‘The impact of social media on young adult music buying patterns’ Here, the focal issue of concern is………….?

Stage 1b – Stakeholder analysis Whilst a ‘shareholder’ has a purely financial interest in the organisation, the ‘stakeholder’ is defined ‘broadly’ as: “Any identifiable group or individual who can affect the achievement of an organization’s objectives or who is affected by the achievement of an organization’s objectives” (Freeman and Reed, 1983: p. 91). Affects can be political, economic, social, technological, environmental or (il)legal Consider the reach and impact of organisations such as Wal-Mart, Vodafone, eBay, Greenpeace, etc. How do we address stakeholder issues in scenario thinking?

Stage 1b – Stakeholder analysis Identify the broad range of stakeholders – all those who can affect or may be affected by the situation Consider their roles in relation to the focal issue of concern – their power to affect, and their interest in affecting the situation, or their response to others’ power and influence

Stage 2 – Determining the ‘driving forces’ Individually, consider the ‘driving forces’ that impact the selected issue Political Economic Social Technological Ecological Legal factors Forces indicate change of direction, size, status, position, value, etc. Subjects/topics do not

Stage 2 – What are ‘driving forces’? Forces indicate change, but should not indicate direction or dimension unless you are 100% certain For example, in a project on climate change futures: ‘sea level’ X ‘impact of sea level on rate of coastal erosion’  ‘impact of rising sea levels in accelerating coastal erosion’  - the implication here is that sea level will rise and coast will erode more quickly

Stage 2 – Determining the ‘driving forces’ As a group, use the round robin approach to discuss each member’s most critical driving forces Ensure that you have a shared understanding of the nature of the driving force Consider your individual views on possible impacts and outcomes of these, not necessarily agreeing on what these might be Record your driving forces individually – clear and concise – on separate sticky notes 1 3 2 137

Stage 2b – Determining the ‘extreme outcomes’ Discuss and agree two ‘extreme outcomes’ for each driving force These should present the ‘limits of possibility’ for outcome within what is considered possible and plausible over the scenario timescale In some instances, there may need to be a third ‘extreme’ where development is not linear, e.g. not confined to a single technology, or will impact different social groups in different ways. 1a 1 1b 1c?

Stage 3 – Clustering the driving forces “At any given time the human brain can comfortably make sense of about a dozen concepts in relation to each other.” (Wright and Cairns, 2011: p.33) ‘Cluster’ the driving forces through discussing linkages of cause/effect or chronology Which driving force outcomes will directly affect the outcome of others? Which events must unfold before others can take place? ‘Name’ the clusters in order to identify a small number of ‘higher level factors’ Record the names on separate sticky notes Note: Stage 4 omitted

Stage 5 – The ‘impact/uncertainty’ matrix Place your cluster heading ‘higher level factors’ along the full length of the low impact/high impact axis of the matrix, discussing and agreeing positions relative to each other – there are no absolute measures to this What is each factor’s degree of impact on the key focal issue over the timescale relative to all others? High impact Low impact Low certainty High certainty

Stage 5 – The ‘impact/uncertainty’ matrix Select the two factors (A and B) that combine the greatest perceived impact on the core issue with the greatest uncertainty as to what that impact will be We may be highly certain that something will happen – e.g. climate change – but highly uncertain as to what impact it may have – increasing storm activity, drought, flood? Factor A Factor B High impact Low impact Low certainty High certainty

Stage 6b – Framing the scenarios For your identified factors A and B, brainstorm your perceptions of two very different ways in which the factor might evolve over the next decade or so Think broadly about how you would describe the resultant outcomes – in terms of society, environment, economy, etc. – to a complete stranger who knows nothing of the issue or context Record your thoughts as dot points on separate sheets for each factor

Stage 6b – Framing the scenarios Consider the interactions of the two sets of different outcomes for factors A and B – ‘best’ outcomes A1 and B1, ‘worst’ outcomes A2 and B2 Brainstorm descriptors of four futures defined by their interaction: A1/B1, A1/B2, A2/B1 and A2/B2 Consider specifically how ‘good’ outcomes in one factor will be impacted by ‘bad’ outcomes to another Factor A Factor B

Stage 7b – Scoping the scenarios Add notes to provide greater depth and build ‘rich descriptions’ of four possible and plausible futures Think carefully and deeply about sense making, logic….. plausibility and possibility of what you are writing Scenario A1/B2: TITLE v Consider where all other extreme outcomes from Stage 2b fit, making sense of their interactions Note: Return now to Stage 1b/7c to consider stakeholder influences on each scenario scope – Does their input/action make sense?

Stage 7c – Stakeholder analysis Identify the broad range of stakeholders – all those who can affect or may be affected by the situation Consider their roles in different scenarios – Would they do what the scenario indicates? Do they have the power and capability to make this happen? Would others respond as indicated?

Stage 8 – Developing the scenarios Develop the storyline that links each possible future back to the present Build logical chains of causality and chronology through strategic conversation of events, actions, people, etc. Combine comfort of the known with discomfort of what has not been considered Engage the audience through the medium of presentation and strength of content

Stage 8 – Developing the scenarios (Wright and Cairns, 2011)

Alternative approaches to building scenarios Backward logic and ‘extreme scenarios’ Working from the future back to the present Thinking of a critical extreme scenario Applying ‘effect >cause’ reasoning Does this link you back to the present? ‘Critical scenario method’ Extending stakeholder analysis across our planet and into the context of future generations Linking ‘causes’ in the world of business to ‘effects’ in the lives and environments of others Applying moral/ethical value judgments (Wright and Cairns, 2011)

Stage 9 – Engaging with ‘critical scenario method’ Broadening the scope of our thinking to consider the overall implications of individual scenario storylines for society at large: “Where are we going? Is this development desirable? What, if anything, should we do about it? Who gains and who loses, and by which mechanisms of power?” (Flyvbjerg, 2001: p. 60)

Stage 9 – Engaging with ‘critical scenario method’ Involved/Affected Actors A1/B1 ‘TITLE’ A2/B1 A2/B2 Note: The list of stakeholders below should be as comprehensive as possible Where are we going? Is this development desirable? Organization Executive i) impact ii) response Organization Senior Management i) ii) Organization Work Unit Members Prime Minister Etc. Federal Government Federal Opposition Minister for Industrial Affairs Etc., etc. Local Businesses………..??? Media – local, national and international Who are the winners? Who are the losers? Who holds power and how do the exercise it? ?? (Wright and Cairns, 2011)

Presenting the scenarios Presentation of key points from scenarios: What are the critical uncertainties in the future? What is the range of possible and plausible outcomes? What is the logic for how these outcomes might unfold? Who are the key players and affected parties? What are the major issues that need to be addressed by decision makers in the immediate future in order to avoid the worst future outcomes? How do you grab the attention of your intended audience and get your message across?

Working with scenarios They enable group sense-making in relation to complex and ambiguous problems They are not predictions of likely futures They offer insights into a range of possible and plausible futures Primarily, they present ways of better understanding the diversity of the present Thinking on the meaning of the scenarios for decision making in the present: What are the key opportunities and threats in the external environment? What are the current strengths and weaknesses within the organization?

Obstacles to scenario thinking The desire for ‘certainty’, and discomfort with ambiguity Hierarchical resistance to the democratic conversation Refusal to acknowledge the validity of knowledge and opinion that challenges accepted norms Myopia and narrow-mindedness

Scenario thinking as a way of being Actively seeking alternatives to the ‘usual’ Considering the broadest range of factors that can impact any situation Seeing the world through the eyes of others Embracing uncertainty and ambiguity Managing risk through opening up possibilities, not closing them down

Thank you References Flyvbjerg, Bent (2001) Making Social Science Matter: Why social inquiry fails and how it can succeed again. Cambridge: Cambridge University Press. Freeman, R.E. and D.L. Reed (1983) ‘Stockholders and stakeholders: a new perspective on corporate governance’, California Management Review, (XXV) 3. van der Heijden, K., R. Bradfield, G. Burt, G. Cairns and G. Wright (2002) The Sixth Sense: Accelerating organizational learning with scenarios. Chichester: Wiley. Jungermann, H. and M. Thuring (1987) ‘The use of mental models for generating scenarios’, in G. Wright and P. Ayton (eds.), Judgmental Forecasting. London: Wiley. Meyer, A.D. (1982) ‘Adapting to environmental jolts’, Administrative Science Quarterly, 27: 515–37. Wright, G. and G. Cairns (2011) Scenario Thinking: Practical approaches to the future. London, Palgrave.