Scenario thinking also known as scenario planning can be described as the experimenting to find out how something or someone changes or behaves when certain variables are shifted. Wilkinson (2009) observes that, “given the impossibility of knowing precisely how the future will play out, a good decision or strategy to adopt is one that plays out well across several possible futures. To find that “robust” strategy, scenarios are created in plural, such that each scenario diverges markedly from the others. These sets of scenarios are, essentially, specially constructed stories about the future, each one modeling a distinct, plausible world in which we might someday have to live and work.” (Wilkinson, 2009, p.1). Virtually any aspect of our lives can make use the scenario-thinking model effectively. Fear of the future is one phobia that every so often gets a grip of us all. Wilkinson continues to assert, “We look out into the future, trying our best to make wise decisions, only to find ourselves staring into the teeth of ferocious and widespread uncertainties. If only everything didn’t depend on, well, everything else.
How do we decide what kind of career path to pursue when it’s not clear what industries will exist in 10 or 15 years? How do we plan our children’s education when we can’t know what sort of society they’ll live in? As we face each of these problems, we confront a deeper dilemma: how do we strike a balance between prediction – believing that we can see past these uncertainties when in fact we can’t – and paralysis – letting the uncertainties freeze us into inactivity.” Scearce,D. Fulton, K. and the Global Business Network community (2004) notes that ” scenario thinking is a tool for motivating people to challenge the status quo, or get better at doing so, by asking “What if?” Asking “What if?” in a disciplined way allows you to rehearse the possibilities of tomorrow, and the to take the action today empowered by those provocations and insights” (Scearce, D. Fulton, K. and the Global Business Network community, 2004, p.3)
Benjamin Franklin once remarked thus, “Only three things are certain in life, birth, death and taxes.” To add to that, I say change. Bruce Sterling a science fiction writer argues, “Futurism is the art of reperception. It means recognizing that life will change, must change, and has changed, and it suggests how and why. It shows that old perception have lost their validity while new ones are possible.”
Scenario thinking at a glance may seem as a complicated economic concept that is the reserve of economists. An example will help de-mystify this concept. Imagine you want to measure the economic development of your country.
You grab a piece of paper and draw two lines. One vertical running on the left hand side of the paper from top to bottom. Draw another horizontal line from the base of the first line running from left to right. Now you have a sample of graph paper with x-axis and y-axis.
Now name the y-axis at the base, “Bad Governance and at the top, “Good Governance.” Likewise, name the x-axis at the base, “Weak Economy” and at the far end, “Vibrant Economy.” Note that the x-axis will represent economic development.
Next, draw two diagonal lines one starting at the base of the intersection between the two lines running from left to right. The other diagonal line starting from the top of the y-axis running diagonally from left to right. The result is a diagram similar to that of a supply and demand curves as used in economics.
Now assume the supply curve to represent the effect of good governance brought about by for instance democracy, peace, and order etcetera. You will notice that as you move further and further away from the base of the curve the resultant effect is a vibrant economy or economic development. The reverse being if there is bad governance the result is a weak economy or stalled economic development.
Let the demand curve represent enemies of development for instance war, anarchy, corruption. In addition what you notice is that as we move further from the top of the curve towards the far end down along the curve, represents better economic development and vice versa. The intersection of these two curves will represent the equilibrium; the point at each economic development is at any particular time.
It follows that scenario thinking is a concept that can be used on any kind of situation in our lives so long as we have shifting variables. It is important to note that various assumptions are made while using this model. The scenario described herein represents an almost certain eventuality by the shifting of the variables. However, there are some situations whereby the outcome is quite unpredictable. Questions of uncertainty, probability or what if are what was described by Wilkinson (2009) as, “long fuse, big bang” problems. Whatever you decide to do will play out with a big bang – often a life or death difference to an organization – but it can take years to learn whether your decision was wise or not. Worse yet, “long fuse, big bang” questions don’t lend themselves to traditional analysis; it’s simply impossible to research away the uncertainties on which the success of a key decision will hang.” Your better judgement, intuition and experience will come in handy at this point. Make the right decision the first time.
Global Business Network. Available from: http://www.monitorinstitute.com/downloads/what-we-think/what-if/What_If.pdf [Accessed: 12/04/2013]
SCEARCE, D. FULTON, K. AND THE GLOBAL BUSINESS NETWORK COMMUNITY (2004) What if? The art of scenario thinking for non-profits [Online] Available from: http://www.monitorinstitute.com/downloads/what-we-think/what-if/What_If.pdf. [Accessed 12/4/2013]
WILKINSON, L. (2009) How to Build Scenarios. Planning for “long fuse, big bang” problems in an era of uncertainty [Online] Available from: http://www.wired.com/wired/scenarios/build.html [Accessed 24/04/2013]