Name of the tool
Scenario analysis
Aim of the tool
Scenario analysis is meant to help explore into the future on the
basis of current trends and developments. The future may unfold in
different ways (scenarios) and this analysis is meant to help people
be more ready to deal with what the future will bring.
When to use it?
How difficult is it to use it?
-
There is medium to high uncertainty involved in planning,
which is not controllable from within the organisation; there is
a strategic issue and the solution is unclear
- The issue involves a broad (up to global) scope of influencing
factors
- The outcome is not largely predetermined (due to internal or
external forces)
- The organisation is open to change and dialogue
- There is leadership support for the scenario thinking process
- There is time to step back for reflective and creative
conversation
- Necessary resources can be mobilised for a successful
initiative (including good facilitator)
Easy - Moderate to Difficult – for experienced users/facilitators
Tool for thought or tool for
action?
Tool for thought
Benefits
We tend to cut corners in thinking about the future and how to
prepare our development initiatives to fit in a future context.
However, all of your initiatives will take place in the future, not in
the present. Awareness of what the future may hold helps to
become more proactive instead of reactive.
Do not attempt to be complete here; focus on progressing through
the process (prevent getting stuck in very detailed discussions at
any step). Develop a few key scenarios and only describe a few key
factors in these particular scenario. This is a shortened version of a
complete scenario-thinking process.
Issues to be aware of
Description of the tools
-
A scenario is an outline of an hypothesized chain of events. It is not a forecast or prediction,
but an image of the future deliberately crafted for planning or foresight purposes.
-
Scenario thinking is both a process and a posture (a way of viewing the world and changes in
it). It is the process through which scenarios are developed and then used to inform strategy.
Having internalised the process, it guides thinking about and managing change.
-
The test of a good set of scenarios is not whether in the end it turns out to portray the future
accurately, but whether it enables an organisation to learn, adapt, and take effective action.
Examples
Steps needed when using the tool
Step 1: Assess the challenges faced by different stakeholders in relation to the issue
 This basically means exploring factors that influence the situation of stakeholders; this will help
you understand what sort of “driving forces” can play a role in future changes.
 Write down matrix of stakeholders and key challenges
Step 2: Explore the driving forces that already do or could impact current and future challenges that
stakeholders face or will face, both uncertain and predetermined
 Driving forces are the forces of change outside your organisation that will shape future
dynamics in both predictable and unpredictable ways. They include factors within your
close-in working environment, like developments related to your stakeholders, or your
community and shifts in the broader environment - social, technological, economic,
environmental, political.
 Driving forces are variables; they may or may not happen
 Probe assumed uncertainties to test how uncertain they really are.
 Agree on predetermined elements
 Describe explored driving forces and write on cards to display
Step 3: Identify key drivers that are most relevant and essential
 Critically uncertain driving forces
 Predetermined driving forces
 Mark the cards with most relevant and essential driving forces
Step 4: Cross the two most important driving forces that are critically uncertain to explore possible
scenarios, e.g.
 Role of the government
 State of the economy
Step 5: Describe implications of scenarios
 Use decision-making matrix to document
Step 6: Explore possible strategies that would be appropriate in view of the conditions posed by the
described scenarios.
 Use decision-making matrix to document
Critically
uncertain
driving
force 1
Critically
uncertain
driving
force 2
Predeter
mined
driving
force 1
Predeter
mined
driving
force 2
Implications
Fitting
strategies
Scenario
1
Resulting
implications
Appropriate
strategies matching
with scenario
conditions
Scenario
2
Resulting
implications
Appropriate
strategies matching
with scenario
conditions
Scenario
3
Resulting
implications
Appropriate
strategies matching
with scenario
conditions
Step 7: Select your core strategies to adopt
 Are any of the implications valid in all scenarios?
 Are there significantly different implications in each scenario?
 Do differences highlight any strategic choices that you are going to have to address?
 Use decision-making matrix to document
 Most strategic agendas will include a mixed portfolio of low-, medium- and in some
cases high-risk strategies
 Besides the developed scenario decision-making matrix, describe the selected core
strategies that you have decided to adopt.
Step 8a: Test your adopted strategies against your earlier explored stakeholder challenges and driving
forces (step 1 & 2)
 Testing means comparing the tentative strategies with the earlier described challenges
and driving forces
Step 8b: Test your adopted strategies for coping capacity with varied scenario conditions
 To what degree can the set of adopted strategies handle variation in unfolding
scenarios
In the end you will have:
 A chart with the key stakeholders and the challenges they face in relation to the issue
at stake
 A set of cards (also converted to a sheet of paper) with the explored driving forces
 A filled-out scenario decision-making matrix
 A sheet with an overview of the selected core strategies to adopt
Source and further
readings
“What if? The art of scenario thinking for nonprofits” by Diana Scearce &
Katherine Fulton, Global Business Network, 2004.