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How do I work with future scenarios?

In our current VUCA world, working with self-created future scenarios has become highly important. Whether small, medium or large companies, scenarios allow us to better innovate, decide and create strategies.

I would like to help with this article to demystify this topic future scenarios and make it usable for each team. Future scenarios can be used by any team to achieve fast, target-oriented effects and results – they are by no means just a tool for strategists, top management, visionaries and futurologists.

Frequently asked questions about future scenarios

I have heard the following questions frequently and will try to shed some light on them:

  • What is a future scenario?
  • How do I use future scenarios efficiently in innovation work?
  • What are useful scenario techniques?
  • How do you work properly with future scenarios?
  • How do future scenarios help in the sustainable transformation?
  • What is the difference between trends and future scenarios?
  • What are the main use cases for scenarios?
  • What is a scenario simply explained?
  • and many more

First of all, what are future scenarios?

Well, in simple terms, future scenarios are a set of written down assumptions about possible future events and their positive or negative impact on our business. You can focus on different aspects such as technology, economics, politics and even society.

These scenarios are then used to identify potential strategy and actions that can help a company better prepare for the future. Thus, scenarios are an effective tool in many departments such as innovation, research & development, sales, marketing and production.

Future scenarios have been an important part of our work at the verrocchio Institute for many years and are therefore also included in our Innovation Coach training. As I look back I can definitely say that, without proper scenario work, most of the innovation projects would have failed.

Important: Future scenarios are not meant to accurately predict the future! They are rather intended to provide a broader understanding of possible, likely developments to enable more robust strategic planning. In practice, you can use future scenarios in different areas. I will talk about these areas later.

What should be the components of a future scenario?

In order for the scenarios you create yourself to be effective, they don’t have to be highly complex or contain pages and pages of information. Over the last few years, we have identified 6 essential components that every scenario should contain – these components can be best described in form of questions:

  1. Who or what is changing?
    This is the focus of your scenario that you reflect. This can be a client, a competitor, a technology, a certain industry, a norm or a law.
  2. How does it change?
    Here you describe in what form or manner your focus is changing – in relation to your business, it can be a positive or a negative change.
  3. When and how long does it change?
    It’s about the timing of the change here. What do you think, when exactly will this change happen und how long will it last?
  4. What is the effect on our business?
    Here you describe the exact effect that changing the focus point has on your business. Try to be very detailled about your effect.
  5. What evidence and sources do I find for this scenario? What have I observed?
    It is very important for you to communicate the sources and the evidence you have for your scenarion in order to validate it. Generally – the more evidence, the better!
  6. What should we do? What is our derivation?
    At this point you connect your scenario to the future of your business. You create ideas, plan actions and strategies about what you think should be done in order to be part of this change or in order to avoid possible negative changes.

As an efficient and quick working format, it is recommended to create the scenario as a whole on a DIN A3 sized surface. In some large group formats, you should use even larger formats.

How do I work with future scenarios?
MethodPad Future scenarios by verrocchio Institute

The MethodPad “Future Scenarios” from our verrocchio Institute is such a DIN A3 work format or worksheet for the goal-oriented creation of scenarios. This MethodPad is also ideal for scenario work on collaboration boards such as Conceptboard or Miro.

Relevant and known application areas

The application areas of scenario work are such a large field by now and there are so many different possibilities on how you can practically work with scenarios. I gathered some of the most common application areas for you:

  1. Strategic planning
    The scenarios you created can be used to develop or check your business strategy. You can run different scenarios and see how your company would react in different situations. This can help to uncover weaknesses in your current strategy and identify potential improvements.
  2. Innovation Management
    Future scenarios can help you discover new business ideas, new business models or potential fields of innovation. By studying trends and potential developments, you can identify potential gaps in market demand and how you could fill them through innovation.
  3. Evaluate the scope of decisions
    If your team has big and very relevant decisions to make, scenarios can help clarify the scope and importance of the current decision. This way the important discussions about the decision are way more clear and less stressful because everyone is synchronised about the possible outcomes.
  4. Vision development
    Companies that have a strong vision are way more successful in our time than companies that don’t have such a vision. A gallery of scenarios can help to efficiently develop a strong vision that every employee as well as all stakeholders feel connected to.
  5. Development of core service orders
    In addition to a vision, core performance statements for teams, divisions and departments in the company are also indispensable for innovative and sustainable success. Scenarios can help to quickly identify effective core performance statements.
  6. Reflection / classification of the current situation
    In our current VUCA time, it is common for Teams and companies to unexpectedly be confronted with new and challenging situations that make them struggle. The most common questions that occurs in these situations: “Is this a short-term phenomenon or a long-term change?” With your self-created scenarios you can classify a situation and get a reliable answer to this question.
  7. Challenging the status quo
    “Why are things the way they are and can’t they be done in a different way?” Those who ask themselves this question are already half way there to innovation and transformation. With the help of scnearios It is much easier for us to realize which aspects of our economic value we should put to the test in order to discover potentials for a new way of thinking.
  8. Risk Management
    By going through different scenarios, you can identify potential risks and plan measures to reduce these risks. If you already make plans ahead of potential crisis, it can be easier to deal with the crisis once it’s there.
  9. Human Resources Development
    By imagining how the world of work might evolve in the future, you can better plan what skills and competencies your employees will need. This can help you create more effective training and development programs.
  10. Product development
    By creating future scenarios that take into account technological advances and changes in consumer preferences, you can better plan what products or services you should develop to stay competitive.
  11. Customer Relationship Management
    By envisioning how your customers’ needs and wants might evolve in the future, you can be better prepared to meet them and thus build and maintain strong customer relationships.
  12. Supply Chain Management
    Future scenarios can help you anticipate potential changes in your supply chain. These changes can be e. g. political, ecological disasters or technological progress that have impact on your supply chain.
  13. Sustainability management
    Future scenarios can also help you to evaluate your company’s environmental impact and develop strategies to reduce it.
  14. Marketing and sales
    Future scenarios can help identify trends and changes in consumer behavior that could affect your marketing and sales strategies.
  15. Legislation and compliance
    By looking at potential policy and legal changes, you can be better prepared to respond to them and ensure your company’s compliance.

We live in times that are very volatile, unpredictable, uncertain, complex and even contradictory sometimes. Our business is moving faster and virtually all cycles are getting shorter. Regarding this especially, an integrated and permanent work with future scenarios can be of great help to continue to act, innovate and transform in a meaningful and goal-oriented way.

The basic work packages for teams

If you decide to pick up the work with future scenarios you should focus on the following work packages. That way you can achieve good results fast and easy.

  • Create scenarios together
    The very basic first step is to create an own gallery of scenarios. Do this in a pair of two, one of you is the thinker and the other one is the writer of the scenario. I can tell from experience that your first gallery should contain at least 20 scenarios. But don’t create more than 50 scenarios since this amount is not manageable anymore.
  • Read scenarios together
    It is now important that each and every one in the team reads every single scenario. Ask each other questions if something is unclear.
  • Synchronize scenarios in the team
    I also recommend to clarify if all team members have the same understanding of each of the scenarios. That way you can easily remove redundancies or combine scenarios.
  • Visibly mark the scenarios regarding who believes in which scenarios
    Every team member now marks (with his own initials) the scenarios that he truly believes in. That way you can easily see how well accepted each scenario is in the team. It is totally normal that there are weak but also strong scenarios in the gallery. This acceptance can also change over time.
  • Compare and cluster scenarios, e.g. with the help of the Scenario Map
    Depending on the area of application, it can make sense to compare the scenarios, cluster them or integrate them into scenario maps in order to derive ideas, measures or strategies from them.
  • Make scenarios visible to everybody, e.g. on a scenario wall
    In order for scenarios to have a long-term effect on business, it has been proven that it has a great effect if the gallery of scenarios is placed in a way that is visible to everyone. This can happen on a large wall or on a centrally organised collaboration board.
  • Check and update scenarios regularly
    After the gallery has been created and the scenario work has begun, experience has shown that the gallery should be subjected to a short stress test once every three months to check whether the significance of the scenarios has changed.

Concrete tools and methods for scenario work

In order to work efficiently with scenarios, I have gathered some tools I like to work with in the context of scenario work:

What typical errors exist?

Many problems that occur during the work with scenarios can actually be reduced to one really typical and very significant mistake: “The level of details and the framework are not defined.”

For future scenarios to be acutally helpful, they MUST be fundamentally comparable! They have to be sychronised in certain dimensions, such as: regarding the team, for the product, regarding the customers, regarding the industry, regarding the country or regarding the world. The dimension time must also be defined: are we looking at a scenarion in one year, in 2 years, in 5 years, etc.

Exactly at this point of determining the helpful and target dimensions we put in a lot of effort with our customers, which is always rewarded.

Now, I hope this information gives you some insight into how you can directly use Future Scenarios in your teams. Remember that it is important to always consider a broad range of possible scenarios, not just the most likely or desirable ones. This way you are prepared for all eventualities and can set up your company for a robust and sustainable future.

In case to want to dive in even deeper: we at the verrocchio Institute offer e.g. very efficient team workshops and 90-minute impulse workshops for working with future scenarios.

Handwritten by Benno van Aerssen