Long long ago, my grandmother in Durban had a Zulu lady named Elizabeth working in her house. As my granny ate her breakfast she listened to the news on her little transistor radio. (No TV in those days). After the news she would go up and do final prep before walking out to catch the bus to her work in town. Some days, Elizabeth would meet her at the door and hand her an umbrella. And on those days it usually rained. It was uncanny. One day she asked Elizabeth how she knew it was going to rain. And Elizabeth said “I listen to the weather report on your radio”. (This was not an X-Files case!)

According to Weather Wiz Kids, “Weather forecasting involves a combination of computer models, observations, and a knowledge of trends and patterns. By using these methods, reasonable accurate forecasts can be made up to seven days in advance.”

Without too much of a reach this sounds a lot like the process for creating scenarios

Creating scenarios may best be understood in context of the following considerations of strategy:

  • The prime driving forces of strategy are organisational development and survival.
  • The essence of competitive strategy is to define and execute a fresh, entrepreneurial idea based on a deep understanding of how your Business Idea fits into the environment in which you choose to survive and develop. A unique offer, innovative processes and inimitable resources all contribute to the ‘freshness” of your Business Idea.
  • Your Business Idea is your strategic perspective on yourselves as an organisation. It is an internal narrative, a systemic view of how you intend to impact your market. At StrategyWorks we use Strategy Map to document the Business Idea.
  • It is possible to affect the future. Some components of the future are uncertain, others are determined by what has happened to date. Resolute conversation can distinguish between uncertainties and predetermined elements.
  • Scenarios are the strategic perspective on the environment in which your Business Idea will play out. Scenarios focus on the external, uncontrollable, ‘the world of fate’. Each scenario describes a possible and equally plausible future.
  • Your Business Idea should adapt to the unfolding future. Your role is to understand each scenario and prepare yourselves to continue to be a significant player should the scenario play out.

 

In short, it is possible to learn and change to meet oncoming challenges. Knowing what those challenges are before they reach you will assist you in your preparation. Creating scenarios is the key to gaining this knowledge. We may not know exactly what the future will be, but with careful thought we can distil the future down to a handful of possibilities.

How does this work?

How can creating scenarios guide our business idea?

We may consider two broad processes. You can Generate scenarios and then you can use your scenarios to Adapt your business idea.

Creating scenarios – Generation

In Generation the team peers into the future through the lens of their Business Idea. This is not clairvoyance! The team starts by reviewing their Strategy Map. Then they list the uncertainties in their environment and sift through the fabric of causes and effects. Through the process the team agree the important ways in which the structure of their future is predetermined.

Creating scenarios is an iterative process. With each iteration the team can learn about their environment and their business. This approach to creating scenarios may be shown in the following diagram.

creating scenarios - generation

  1. The agenda: The team first agree the agenda for the process.
  2. Review the Business Idea: They hold a conversation about their Business Idea. In our sessions we review the team Strategy Map. This conversation prepares the team to look to the future.
  3. List uncertainties: The team hold their Business Idea in mind and brainstorm the uncertainties in their business environment.
  4. Identify drivers and predetermined elements: The team work through the uncertainties. they define the drivers for each uncertainty.
  5. Define scenarios: Creating scenarios allows the team to reach a level of understanding about the future. These scenarios usually change in the next iteration.
  6. Play the movie forward: The team discuss the details of each scenario. The describe the detail associated with each of the predermined elements in the scenarios. Through the first iteration in this process the detail will point to the gaps in your understanding. “uncertainty” will be due to lack of knowledge rather than real indeterminate concepts.
  7. Research and analysis: The scenarios raise the questions. Through this part of the process members of the team seek out the answers to the questions. They go out to discover. They fill in the blanks.
  8. Reiteration: the team follow the process again. The strategic conversation grows and enriches with each cycle. The uncertainties change from ‘lack of knowledge’ to ‘actual indeterminates’.

 

The scenarios are great. But the main product of the process is the systemic understanding of the business environment and unique insights into your Business Idea. Insights that may lead to a total reinvention of your Business Idea. The next process describes how this may come about.

Creating scenarios – the Adaptation process

In the Adaptation phase, the team studies their Business Idea in the light of the different scenarios they have created to improve the fit of the Business Idea in the scenarios. This is a linear process although, the measures you collect in execution may be fed back into the next iteration of scenario development. The process may be shown as follows:

creating scenarios - Business Idea Review

  1. Agenda: Again the team agree the agenda.
  2. Review the scenarios: The team review the scenarios to be used to evaluate their Business Idea. This may be in the form of open conversation or a Formal Technical Review.
  3. Review the Business Idea: The team step into each scenario and consider their Business Idea. This can be in the form of conversation though there are exercises they can use to play the roles to understand the stance of different players.
  4. Adapt the Business Idea: the process runs in parallel with the previous point. As gaps and obstacles become apparent in the Business Idea, members of the team discuss possible changes.

 

The scenarios, are test conditions for the Business Idea. Through the conversation the team have organised a large amount of disparate, but relevant, data to create powerful thinking tools. They have categorised the multi-dimensional business environment into manageable chunks. Through the scenarios they have encapsulated their knowledge of underlying structures as well as irreducible uncertainty. By using more than one scenario, the team test the durability of their plan. however, the process does not deliver clear-cut Go/No-go decisions. Rather, through iteration, the team create a better Business Idea.

 

They stretch the range of the organisation’s vision beyond what is traditionally seen as relevant. They develop the ‘‘peripheral vision’’ in the organisation. They move the thinking into the ‘‘adjacent space’’.

**  I persuaded a well known Somerset West Watercolourist to do the illustration for me (it was not difficult)