Scenario development is an instrument used for drafting a future-proof strategy. It is used to comprehensively depict various future scenarios and to take these into account in strategic decision-making. Scenario development assists in making decisions not by expecting a desired or probable future but by being prepared for possible worse, better or unexpected alternatives. In this way, environmental influences and known, but not definitively foreseeable, trends can be included in the strategy development. Likewise, potential specific shocks can be considered in the scenario development. In order to prepare the future scenarios, quantitative prognoses and qualitative assessments can be combined in order to represent future developments systematically.
1. Determine a scenario group
The first step is to consider who will be included in the scenario development. The important thing here is that significant competencies are bundled. The composition of the group will also determine whether and which techniques (e.g. focus groups or Delphi surveys) can be used in the scenario development.
2. Define the framework of the scenario development
The frameworks that scenario development must have will then be determined so that all the important aspects can be adequately taken into account and that those that are not significant can be removed. This means: what is the time horizon? What influences do we need to consider? In what geographical boundaries are we active? etc.
3. Describe the current situation
The basis of scenario development is the exact description of the current starting situation. All the relevant facts must be assembled. A SWOT analysis, for instance, is suitable for this.
4. Identify and classify influencing factors
What are the possible influencing factors on the intended project? The opportunities and threats from the SWOT analysis can give an indication here. Asking experts can also be meaningful in order to identify influencing factors that have not been thought of before. Likewise it is also important what the impact of the factors is: Is it a constant influence, a once-off, directional impulse or is it an uncertain event that cannot be foreseen?
5. Determine the method
The methods with which the scenarios will be developed can then be selected depending on the influencing factors identified. If they are quantifiable and constant trends that are based on unknown initial figures (e.g. population growth) quantitative prognosis methods may be used. Qualitative methods are suitable for taking relevant influences into account that are not measurable from a subjective (expert) point of view.
6. Draft scenarios
With the assistance of the selected methods and taking into account the influences selected as relevant, scenarios are drafted that describe the situation at the previously defined x point in time. Various strategies arise by varying the development trends and influencing factors. It is important that the scenarios are plausible and conclusive in themselves even if they paint surprising pictures (which is desired!). As a rule it is possible to draft a probable scenario as well as two alternatives (e.g., best-case, worst-case or with the occurrence of a particular impulse) in order to not be hampered in the capability to act by all the conceivable scenarios.
7. Determine strategy
A strategy can then be drafted based on the scenario that is classified as probable but which can also take the extreme scenarios into account and, if necessary, be quickly modified to these if required.
8. Adjusting the strategy (if applicable)
If it becomes evident that the actual development will be more in line with the forecast trend of an extreme scenario or special influencing factors occur, the strategy can be quickly adjusted to the now probable future. A new scenario development may then become necessary.
- Phase 1 – Strategy group:
- Competence: Make possible scenarios known to decision-makers
- Communication: Ensure transparency in the decision-making basis
- Capability to implement: Show the reasons for the reform and its necessity
- Phase 2 – Agenda Setting:
- Competence: Have knowledge of (probable) future necessities
- Communication: Show the necessity of the reform
- Capability to implement: Make the necessity for the reform clear; be able to provide positive and negative alternatives
Tom Leney, Mike Coles, Phillip Grollman & RaivoVilu. Handreichung zur Szenarioentwicklung. Luxemburg: Amt für amtliche Veröffentlichungen der Europäischen Gemeinschaft. 2004.
Hans-Henning Schröder & Dennis M. Tull (Hrsg.). Europäische Energiesicherheit 2020. Berlin: Stiftung Wissenschaft und Politik, Deutsches Institut für Internationale Politik und Sicherheit. 2008.