Lecture scenario planning

SCENARIO PLANNING

LILIANE GEERLING SEPTEMBER 24 TH 2013

PLANNING

• Vision statement • Mission statement • Objectives • Strategy • Actionplan • Implementation • Monitoring …….circular

23 SEPTEMBER 2013 3

Identification of driving forces of change

Determination of main issues and trends shaping

the future

Clarification of the level of impact and degree of

uncertainty

Establishment of scenarios

Creation of different scenario stories

Exploration of the future

Formulation of the problem / strategic question

Identification of the key-issues characteristic

for the present state

Recognition of factors responsible for the

current situation

Identification of the main actors present on the

scene

Understanding of interactions between actors

and factors

Understanding of the past and present Generating policy proposals and

suggestions for action

Development of indicators to measure the

progress

Identification of bodies responsible for

action

Development of mechanisms for revising the

vision and generating new suggestions in

order to respond to changing conditions

Recommendations and suggestion for

the implementation of the vision

Generation of ideas of what is desired

Agreeing a vision of the desired future

shared by all stakeholders and sections of

society

Development of the most desirable

future vision

SCENARIO-PLANNING

Scenario planning is a foresight methodology. It helps make sense of an uncertain future. The focus is on making better decisions.

WHY DO IT?

The world is becoming more and more complex. We are facing significant new challenges and pressures. Decisions taken today will have effects years into the future, but in what sort of world? It is increasingly difficult to discern trends and realities, and to make well-informed decisions today!

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?

All our knowledge is about the past, but all our decisions are about the future. We create our future by what we do or don’t 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?

What we don’t know we

don’t know

What we

know we

don’t know

What we

know

Most of what we need to know to make good decisions today is outside

our comprehension: we don’t even know it’s there.

All our knowledge is about the past,

but all our decisions are about the future.

TYPES OF FUTURES

Possible - “might” happen (future knowledge) Plausible – “could” happen (current knowledge) Probable - “likely to” happen (current trends) Preferable - “want to” happen (value judgements)

Time

WILD CARDS

“Wild Cards” are low-probability, very-high-impact 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

e.g.: stock market collapse; terrorist attack; disrupted water, gas or electricity supply; etc.

WHAT IS FORESIGHT?

An approach to thinking about the future which lets you: • free up your thinking beyond the here and

now • explore plausible futures (i.e. always more

than one, because “the” future is not pre-determined)

• and think about implications for decision making today

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 (scenarios)

Inputs

Strategy

Outputs

Analysis

Interpretation

“what might we need to do?”

“what will we do?”

“how will we do it?”

“what’s really happening?”

“what seems to be happening?”

things happening

Fore

sig

ht

“what might happen?” Prospection

Inputs

Strategy

Outputs

Analysis

Interpretation

Prospection

Fore

sig

ht

Expanded Perceptions

of Strategic Options

Strategy Development

Strategic Planning

Scenarios

“Deep” Drivers of Change

Trends, Issues, Themes

WHAT ARE SCENARIOS?

Scenarios are possible views of the world, described in narrative form (stories) that provide a context in which one 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 decision makers to take greater control of their situation.

WHY SCENARIOS?

• Provides structured process for people to start ‘consciously’ thinking about the longer-term future and possible implications for strategy today.

• A creative and shared process that allows time for reflection about a region and its future.

WHY SCENARIOS?

Scenarios strengthen a 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

Distance into “the future”

Uncertainty

Predictability

F S H

Forecasting Scenario Planning “Hoping”

Why Scenarios? (Ranges of Usefulness)

t

U

THE SCENARIO PLANNING PROCESS 1. Research the driving forces 2. Determine patterns of interaction 3. Create scenarios 4. Analyse the implications 5. Evaluate scenarios 6. Monitor indicators

Interpretation

Fore

sig

ht

“Deep” Drivers of Change

What’s really happening?

1 RESEARCH THE DRIVING FORCES Define the major sources of change that affect the future, whether those forces are predictable or not. Some of the relatively predictable elements are local demographics, trends in local land use, levels of congestion, and mode split. Less predictable are macro elements such as the global economy, future availability of funding for infrastructure, global environmental conditions, and technological innovation.

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

THINGS CHANGE ...

“We don’t 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

MAJOR DRIVERS OF CHANGE

• Social • Technological • Economic • Environmental • Political

SOCIAL TRENDS

• Rising and ageing population • Movement towards consumer-driven lifelong

education • Increasing life expectancy and quality of life,

supported by a move towards a more holistic approach to health

• Increasing socio-economic inequality • Cultural transformation driven by

globalisation, immigration and technology • Shift of economic power to the consumer • Growth of population in the urban areas

particularly the concentration of knowledge workers around the city centers

• …..

TECHNOLOGICAL TRENDS

• Continued improvements in ICT and increased human reliance on this technology

• More efficient and cleaner automobile technologies

• Increasing development of environmental technologies and businesses

• Major health and agribusiness productivity improvement likely from biotechnology advances

• Greatly advanced materials technologies resulting from nanotechnology

• New and cleaner renewable energy sources becoming economically viable

• ……

ECONOMIC TRENDS

• Declining trade based on traditional commodities

• The global city • Growth of jobs in new export industries

associated with the global economy and increasing participation in the global economy

• Unemployment for those in the old economy sectors

• Change in the locus of wealth creation from industry to the information/knowledge economy

• ….

ENVIRONMENTAL TRENDS

• Increasing acceptance of the concept of sustainable development

• Continued degradation of the natural environment

• Declining water quality • Generally declining air quality and increased

energy consumption • Uncertainty surrounding the impact of global

climate change • ….

POLITICAL TRENDS

• Rising influence of global government to the detriment of national governments

• Rising influence of Transnational Corporations and global capital

• Increasing influence of Non-Government Organisations (NGO’s) on the global and local scene

• Possibility of direct democracy and new communities created by the internet

• New possibilities for global conflict, terrorism and crime.

2: DETERMINE PATTERNS OF INTERACTION

Consider how the driving forces could combine to determine future conditions. To determine these patterns of interaction between driving forces, planners can develop a matrix that identifies the driving forces as a pair of opposites with a potential positive or negative outcome.

BUILDING THE SCENARIO MATRIX

For example, if the economy is a driving force, it can be labeled as having either no growth or fast growth. By determining the interaction of each driving force, scenarios can be created. Choose two drivers that are most uncertain and most critical in terms of impact on your plan.

Critical Uncertainty 1

Scenario 1 Scenario 2

Scenario 3 Scenario3

Critical

Uncertainty 1

Critical

Uncertainty 2

BUILDING THE SCENARIO MATRIX

DEVELOPING THE SCENARIOS

DEVELOPING THE SCENARIOS Four global perspectives that could inform the future of e-learning which were developed by an international panel.

DEVELOPING THE SCENARIOS

3: CREATE SCENARIOS

When generating scenarios, planners should think through the implications of different strategies in different future environments. The goal is to bring life to the scenarios so that community stakeholders can easily recognize and connect the various components.

4: ANALYSE THE IMPLICATIONS

Ultimately, scenario planning is a technique for improving decision making. The scenarios enable planners to explore the shape and nature of their suggestions in a variety of circumstances. The use of visual information to show the interactions in each scenario can help the public and decision makers understand the consequences of potential actions and the potential impacts of various scenarios.

5: EVALUATE SCENARIOS

Planners can measure the scenarios against one another by comparing indicators relating to land use, transportation, demographics, environment, economics, technology, and other driving forces. During large regional public meetings, graphic simulations of alternative scenarios can stimulate understanding and decisionmaking among stakeholders. Through this process, the community can formulate reasoned responses and enhance its ability to respond to change.

6: MONITOR INDICATORS

Scenario planning is an ongoing process. As the future unfolds, planners need to assess and compare real growth patterns to the selected scenarios and devise new scenarios, make new decisions, or create policies to address changing conditions.

1. research driving forcesh

2. Determine patterns of interaction

3. Create

scenarios

4. Analyse implica-

tions

6. Monitor

indicators

5. Evaluate scenarios

STEPS IN SCENARIO PLANNING