The building of scenarios based on drivers of change is confirmed as an integral element in all the practice frameworks, but foresight experts and case study research promoted the view that this process step is beneficial to the top-down component of foresight development. To create the top-down driven draft scenarios, a team of foresight specialists, corporate development managers and future agents combine or cluster signals with mainly qualitative methods to create and describe draft scenarios (the bottom-up component is the scenario/future workshops). The literature confirms that scenario building in the foresight discipline needs to be based on qualitative methods.
Scenarios can bundle, connect and present weak signals (in combination with or supported by strong signals) in a meaningful way in order to decrease the complexity in an unpredictable future environment and help to educate stakeholders regarding potential changes. Managers will benefit from scenarios through learning about strategic uncertainty and opportunities in the environment and the underlying drivers, and will in turn add value by identifying and describing the consequences for the rest of the organisation. Successful organisations describe scenario building as an integral part of both their strategy development process and every business units’ continuous foresight process. These organisations actively encourage all their employees to participate in the development of scenarios through an unfettered discussion of ideas and an open mindset.
The need to canvas multiple futures (or scenarios) is strongly supported by literature and foresight experts. However, in business practice, preparing an organisation to anticipate a variety of potential environments that are fundamentally different not just from each other but also the present, can be inherently problematic and represents a radical departure from traditional approaches to strategic planning.
Successful scenario building methodologies seem to be largely unstructured, using experts, gut-feeling and verbal communication. Unfortunately, the broad literature does not provide detailed information on recommended approaches and methods for combining qualitative, weak signals into scenarios, but case study research has indicated that three methods can be utilised in a best practice framework:
|Method||Combine weak signals with trends to create bifurcations in timelines||Elaborate patterns of logical consequences||Experiment with cross-overs|
|Summary||Track a signal’s anticipated path through time, considering possible turning points (or “bifurcations”) where the path splits into two directions.||A systems dynamics approach is utilised to identify and recognise interconnections between signals and describe the consequences.||Structural changes in markets or industries can arise because new practices or technologies (cross-overs) are introduced from another industry.|
|Practical Application (Best Practice)||Using insights from patterns of logical consequences and by identifying and describing the potential development of signals (projections), images of the futures (or draft scenarios) can be developed.||Matrices and impact analysis help to cluster signals, understand patterns in logical consequences and therefore create signals with assumed logical interconnections or dependencies.||Cross-overs are utilised to acknowledge and include industry foreign concepts to create the foundation of a draft scenario or combine signals to describe new concepts or behaviours.|
Table 1: Recommended Methods for Scenario Building (own illustration following Fuller 2005) (© Marc K Peter / FutureScreening.com™)
The case organisation adopting a foresight approach did not consider a fourth method (entrepreneurial creation of futures) as part of its first rollout of the new foresight process. This method advises the use of entrepreneurs to create potential new futures and business ventures. Entrepreneurial settings are characterised as highly competitive open environments and are associated with rich particular personal or local knowledge, in combination with a presentation of the organisation’s collected signals and insights into future change. The approach is to allow a small group of entrepreneurs (internal or external participants) to combine signals of change into opportunities and threats to build a future world (or scenario) where they could build a new business venture. The outcome of this process is a set of well argued business models (or scenarios) for new ventures that take account of needs, motives and practical issues and make transparent assumptions about the nature and extent of the transformation which the present must undergo.
Based on a combination of the three methods for combining signals (outlined in Table 1), clusters around signals, projections and core themes can be identified and verbally described, tested, then further developed and refined. This leads to the creation of long-term future images or draft scenarios. In organisations applying a foresight approach, they are created during multiple workshops, primarily with corporate development teams, future agents and external experts (foresight experts recommend associated industry experts) to review and enrich the draft scenarios. The recommended methodologies, informed by both practice frameworks and literature, are qualitative methods such as creative sessions, brainstorming, corporate think tanks, narratives and story-telling, visualisation of clusters, prototyping/mock-ups and open-creative conversations. Some foresight experts suggest that qualitative scenario modelling can be combined with quantitative methods, for instance to overlay qualitative models on quantitative data, to determine how the two models could interact and the possible consequences. Gaining acceptance and stakeholder buy-in from both senior management and team members is considered vital when working with scenarios. Therefore, scenarios should be clearly described and easy to understand. The visualisation of scenarios is an alternative (or complementary) way to present scenarios. Both the literature and organisations adopting a foresight framework utilise future maps to visualise scenarios and their underlying drivers.
Scenario building is likely to be one of the most important steps in the foresight process and the utilisation of qualitative methods to combine signals is crucial. In terms of the tested research propositions, it is the foundation for open strategic debate and innovation, which will determine the scope of future strategic projects and enable responsive decision-making later in the process. The required investment to build scenarios based on a catalogue of hundreds of identified signals and in collaboration with a group of managers and foresight or industry specialists is significant. Therefore, it is essential to apply user friendly methodologies which will reduce complexity and generate meaningful and robust scenarios.
Practice Implications Derived through the Research
As literature does not provide user friendly, qualitative and practical methods to combine weak signals, case study research informed the utilisation of a mix of methods from Fuller (2005), namely cross-overs (combine signals which support the building of industry foreign concepts), bifurcations (create qualitative projections of a signal’s most likely behaviour, for instance in combination with other signals) and logical consequences (combine signals and create signal maps depending on their neutral, negative or positive attitudes towards one another). The building of draft scenarios is the top-down component of the foresight framework, followed by the bottom-up element which takes place in the scenario/future workshops.