Wednesday, 29 January 2014

Scenario Planning: Managing the Future

When countries or companies fall apart, you often want to ask: why have unfolding events come as such a nasty surprise? Or if these weren’t a surprise, then why were attempts to mitigate the ill-effects so inadequate? Political processes, diplomatic projects or commercial ventures that do not include preparations for diverse possible scenario outcomes are at far greater risk of failure than those that do.

Was ousted Egyptian President Hosni Mubarak surprised or merely ill-prepared when he lost power? In Damascus, did Bashar Al-Assad make too many assumptions about his regime’s authority, or was Syria’s civil war inconceivable to him? Did either president have any competent contingency plans for the smooth transition of power? After all, no one lives forever.
For captains of industry to presidents of countries, effective planning for the future is essential, but it is often constrained by Groupthink [see http://arkhonlowry.blogspot.co.uk/2013/11/governance-and-groupthink.html]. Adopting Scenario Planning procedures can help to overcome this as well as improve the prospects of managing complex possible futures.

Honest and open discussions are of paramount importance for Scenario Planning to be effective. Political and business arrangements or cultures that do not enable open debate cannot expect full potentials to be attained, and may be incapable of recognising impending disasters in sufficient time to respond effectively.
At the core of the Scenario Planning process is a brainstorming SWOT Analysis of the Key Facts and Factors, as well as the Actors and Entities involved in a Scenario. These are the Drivers of the system. Categorising the Drivers’ influence on the system as strengths, weaknesses, opportunities and threats, helps identify various Possibilities within the narrative of a Logic Path that makes up a route map of a potential scenario. A note of the Motivations of the Actors and Entities may also be included in addition to noting the Parallels, Precedents and Trends relevant to the system. Where the Logic Path comes to a major Branch Point/Critical Uncertainty it may be necessary to create a separate scenario or mini-scenario.

Provided there is adequate feedback within a system, then preparations can be made to deal with various outcomes, and early warning of the unfolding of a specific scenario can be conveyed when certain Critical Events occur or Branch Points are reached. These are the Early Indicators.
Where consensus is illusive concerning the nature of Drivers, or the desirability or plausibility of a scenario, it may be prudent to draw up parallel scenarios and highlight the Branch Points where it would be possible to discount one or more Logic Paths. However, it is best to focus on only four or five scenarios, but crucially these should cover the range of possible outcomes (desirable to disastrous) rather than just those deemed the most likely to occur. The most likely scenario should be included as a base line. During the process, it is useful to note what Assumptions have been made, the Implications and the level of Certainty or Controversy concerning them.

Categorising drivers as Enablers or Inhibitors of a Scenario helps in the development of the Logic Path, and, as far as developing Action Plans are concerned, will highlight whether action is needed to Mitigate or Capitalise on a Driver’s impact on a system. This is especially true with Transformative Scenario Planning (TSP). The key to TSP is to identify what a Desirable Scenario outcome is. Next it is necessary to identify the Key Drivers required to construct a Logic Path and initiate the Critical Events needed to attain that Desirable Scenario outcome.
Scenario Planning should be an ongoing process that allows for frequent updating and reassessment so that Contingency Plans are more effective and Groupthink is avoided.

There are many ways to set out the phases of a TSP process. Here is one:

Analysis

·         Identify the Facts, Factors, Entities and Actors that are the system Drivers;

·         Undertake SWOT Analysis of the Drivers;

·         Identify Possibilities including the Assumptions made, and note the Implications of each possibility;

·         Highlight any Possibilities that are deemed Critical Events.

 

Scenario Development

·         Identify a range of Scenarios from desirable to disastrous;

·         Set out Logic Paths and note the Early Indicators/Branch Points for each Scenario.           

 

Transformative Scenario Planning

·         For each scenario, identify the Inhibitors and Enablers;

·         Develop an Action Plan that steers the system away from undesirable scenarios and towards a Desirable Outcome.

In his book Transformative Scenario Planning: Working Together to Change the Future, (2012 San Francisco, Berrett-Koehler), Adam Kahane sets out five steps of the transformational process. These are:
·         Convene a team from across the whole system;
·         Observe what is happening;
·         Construct stories about what could happen;
·         Discover what can and must be done;
·         Act to transform the system.

Please send an email to arkhonlowry[@]gmail.com if you would like to find out more about establishing Scenario Planning for a range of settings including political, diplomatic, humanitarian, environmental, economic and business arenas. A Dynamic Transformative Scenario Planning process can also be set up to enable the easy and continuous review and updating of the process by subject-area experts and stakeholders who may even be unavailable at the same time or in the same place.

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