Scenario planning

The scenario technique is a method of strategic planning, which is used both in politics and the economy. The aim is to analyze possible future developments and coherently represent. It describes this alternative future situations and ways that lead to these future situations. Scenarios represent hypothetical sequences of events to draw attention to causal processes and decision-making moments. In addition to describing how a hypothetical situation in the future can come about, variations and alternatives are presented and show which possibilities there are in each stage for different actors to control the further process. The scenario technique followed such as the analysis of extreme scenarios ( positive Extrem-Szenario/Best case scenario, negative Extrem-Szenario/Worst case scenario ) or particularly relevant or typical scenarios (trend scenario). Scenario technique is still used in psychology and psychotherapy ( psychodrama, socio- drama). Here it goes both to the future and to past scenarios.

Background and applications

The scenario technique with original military roots has found applications in economic and social issues. The preferred areas of application are:

• Preparation of decisions in politics and in the economy ( eg in terms of: technology development, business models, market and industry developments )
• Orientation with respect to future developments
• Strategy development and review
• Early identification of opportunities for change by raising awareness of the future

Other fields of application:

• Crisis Management
• Business Continuity Management
• Project Management
• Risk Management
• Evaluation ( Zielexplikation )
• Corporate Development
• Personnel planning

Examples:

• Economic scenario in combination with the method System Dynamics: Dennis Meadows study for the Club of Rome: The Limits to Growth ISBN 3499168251
• Strategic business planning: At Shell, the scenario technique was successfully used in the 70s to cope with the oil crisis.
• The International Panel on Climate Change (IPCC ) has developed scenarios of how the world of the future will look like, and may have the effect of climate change.

Scenario funnel

Scenarios are often presented in the form of a scenario funnel. The starting point of consideration is the trend scenario, which is mounted on a timeline. This trend scenario represents the future development under the assumption of stable environmental developments is ( ceteris paribus ). Since it must be assumed, however, as a rule of unstable environmental conditions, both positive and negative possibilities for development are considered.

Due to the ever more distance from the present and the associated potential deviations from the trend scenario, the span increases with continued time. That extreme scenario, which shows the best performance ( "best case " ), represents the upper end of the funnel, whereas the so-called "worst case", ie, the worst possibility for development, forms the lower end.

Alternative scenario funnel

In the present scenario, the funnel is the narrowest. At the exit point, the relations in the system under consideration and the factors affecting them are known. However: Even when considering the present, there are different views of reality, which are characterized by various estimates. An essential element of the scenario thinking is thus the realization that the future vision is often concentrated in a specific appearance of the present and it is necessary to skip these limit when the field of possible alternatives should actually be illuminated. The funnel illustrates the possible space of plausible futures, which can be imaged with scenarios. These hoppers can interact developments and events, which, although under present circumstances an extremely low plausibility is metered, but which are nevertheless not excluded and can have a major impact on the development over time. One speaks of wildcards or discontinuities.

Phases

The application of the scenario can be divided into the literature in phases. There you will find different phase models, which only slightly differ from each other in general. In the following the actions of the scenario technique is illustrated by a simple phase model.

Step 1: Tasks and problem analysis

In the context of tasks and problem analysis of the test object is first defined and described. Subsequently, the factors / descriptors are identified which describe the subject matter or the future scenarios of this field and possibly influence.

Output of this phase is a detailed task and problem description and a list of factors.

Step 2: Effects Analysis

In the impact analysis examines how the individual factors influence each other. This can be determined with a networking table. Here, the descriptors are compared with each other. In a direct comparison, it is determined what impact (none, medium impact, high impact ) has a factor to another factor. Then each of the active and the passive effects accumulated and the influence factors in a matrix can be compared. (This step can also be found in Frederic Vester's Sensitivity Model ).

Output of this phase are the networking table and an influence matrix and an overview of the magnitude of the influence of the individual factors. With the help of which one can reduce the often very large number of influencing factors to a manageable number, if you select only the most influential factors.

Step 3: Trend projection and identification of scenarios

First, it is the different development options for each selected factors to determine. What forms / future developments are possible / feasible for the individual factors? The different forms can be generically determined in a morphological box.

Due to the mathematical combination of the different factor levels arising possible scenarios. For example, you combine the first occurrence of the first factor to the second occurrence of the third factor: "Factor 1 Education " with the expression "Overall high level of education in the society " is combined with the expression of the factor 3 " Technologieverständis " "Overall, deep technological expertise ". However, since not all combinations may be useful or even exclude, or more combinations can be summarized because of their similarity or meaning, a bundling of alternatives and a restriction on the further study on selected scenarios or alternative bundle is useful. In order to effectively work with the scenarios, it is useful to select a number from four to eight scenarios. Usually, one would at least consider the two extreme scenarios, the trend scenario and possibly a few selected scenarios on. Using an interaction analysis can be correlations between different future events that may occur represented, analyzed and evaluated for their mutual effects. Thus, the previously identified, possible scenarios can be tested for their plausibility.

Output of this phase are the possible values ​​of each factor / descriptors, as well as their combination / bundling to different scenarios. Afterwards, offers a description / formulation of scenarios to make them more understandable and easier to communicate.

Step 4: Evaluation and interpretation

The selected scenario is investigated in this phase. The scenarios are compared with their estimated probabilities and the respective scenario risks and rewards. In addition, the scenarios and expected situation ( Where is the future developed ) can regarding the current situation (in which scenario we are? ) Rate. According to this view, companies can define actions / action options for each scenario in order to prepare for this. With the help of scenarios, a company can also check out his strategy. When it detects that its current strategy in any of the developed scenarios is successful, an adaptation of the strategy needs to take place. Scenarios help in this case in the future robust strategy development.

Output of this phase are reviewed and confrontation and derived options and activities of the selected scenario.

Qualitative or quantitative procedure

The methods for the development and analysis of possible future developments ranging from purely qualitative approaches on the basis of plausible description of development paths over the heuristic use of ordinal values ​​of a rating scale to purely quantitative methods such as factor analysis. The transition from qualitative to quantitative approach is the controversial thesis that in the application of at least four different values, the user implicitly assume a scaling interval. If one accepts this hypothesis, then we can assume an interval scale level and apply quantitative methods. Negates to this thesis, then one remains purely qualitative.

Combination of Delphi and scenarios

Researchers and strategists have the opportunity both Delphi scenarios as well as scenario - Delphis use in the context of innovation management. Both combinations allow an improvement of the individual methodologies by the benefits are summed. In practice either of the two techniques for parent methodology is determined and the second integrated at a specific phase in the control. The combination of Delphi and the scenario technique so far have been relatively rare ( see for instance the study of line 2010).

The integration of Delphi in the scenario process is more common than the development of scenario - Delphis, ie the assessment of scenario elements in a Delphi study. In the literature, this type is discussed as Delphi or expert-based scenario. According to recent research shows that the validity, acceptability, plausibility and consistency can be greatly increased by scenarios by expert knowledge is integrated by means of Delphi surveys in the process. The Delphi technique can be used in particular in the scenario phase of the trend projections. Expert on the future is systematically recorded by a Delphi survey and thus can be used as input for the generation of alternative scenarios. Based on the opinion of a Delphi panel to relevant events and developments are assigned probabilities. Furthermore, can be identified by a Delphi survey central lines of argument and extreme developments, for the scenario creation process.

A scientifically based process for creating Delphi -based scenarios can be found in the canal (2010)