Martin Rhisiart Cardiff Business School Futures Workshop Turku, 07.06.2006 Scenario Building Martin Rhisiart Cardiff Business School

What are scenarios? Scenarios are stories or narratives that portray what might happen, why it might happen, and with what consequences Scenarios can be very powerful tools to contemplate the range of possible futures that could develop from the influence of key drivers, events and issues.

Definitions “a tool for ordering one’s perceptions about alternative future environments in which one’s decisions might be played out” (Schwartz, 1996).

Pioneers Herman Kahn, On Thermonuclear War (1960). RAND – public policy Pierre Wack – Royal Dutch/Shell; The Gentle Art of Reperceiving” – corporate

Why use scenarios? Offer a non-linear and dynamic way of thinking Ability to deal with complexity, to consider multiple variables simultaneously, and with ‘different interpretation’ over time Counteracts the historical bias of quantitative forecasting approaches Challenge assumptions

Why use scenarios? (II) “Scenario thinking, by setting discussions in a time frame beyond their current assignment and beyond facts and forecasts, allows for a discussion with less defensive behaviour and a more shared sense of purpose” (Ringland, 2002)

Why use scenarios? (III) “Within Shell, I think the imperative is to use this tool to gain deeper insights into our global business environment and to achieve the cultural change that is at the heart of our Group strategy.  We face real challenges in the future, we will all need to be able to respond to changing circumstances and make informed and rigorous judgements about our decisions: these scenarios and methodology will help us to do that better.” Jeroen van der Veer (2005), in global scenarios report (to 2025)

Epistemological basis Work of neuro-biologists suggests that humans are natural scenario-building animals – ability to tell stories about ourselves in the future; cognitive link to speech capacity in the brain

Objectives and main uses Development of strategy and policy – organisational/spatial Heuristic device – ‘re-perceiving’ – in organisational change Stimulate critical thinking, challenge assumptions – within organisations, the general population

Timescale Varies according to organisational needs, question addressed and themes covered; generally 3-5, 10, 20, even 50 years, e.g. medium-longer term CIA, Global Trends (2015) Shell, Energy needs, choices and possibilities (2050)

Synergy with other tools Scenario building often makes use of other tools, e.g. forecasting/ quantitative; expert opinion; stakeholder opinions etc)

Benefits of using scenarios Thinking “outside in” – big, external forces Creating common language and understanding – working across disciplines, departments etc Organisational alignment to vision Develop group of people with ability to think strategically

Methodology and implementation Several scenario building methodologies have been developed Implementation procedure cited here is a common approach, developed by Schwartz (1996) and Ringland (2002)

Implementation steps Step 1: Identify the focal issue or decision Step 2: Key forces in the local environment (microenvironment) Step 3: Driving forces (macro environment) Step 4: Rank by importance and uncertainty

Implementation steps Step 5: Selecting scenario logics Social fragmentation Digital diffusion Digital desert Techno-atomisation Non-digital isolation Digital cohesion Non-digital benevolence New Solidarity

Implementation steps Step 6: Fleshing out the scenarios Step 7: Implications Step 8: Selection of leading indicators and signposts

Implementation procedure Step 9: Feed the scenarios back to those consulted Step 10: Discuss the strategic options Step 11: Agree the implementation plan Step 12: Publicise the scenarios

How many scenarios? “Scenarios are not conceived of one at a time. You develop a range of two or three possible futures, allowing you to address an array of possibilities and rehearse your responses to each of them. At the same time, more than four scenarios tend to be too complex: you cannot keep track of their ramifications in your mind” (Schwartz)

Case studies 1. Border, Midland and Western Region, Ireland 2. Countryside Council for Wales