3.4.1 Intuitive Logic School

The intuitive logic approach says that business decisions stem from a intricate interplay of economic, political, technological, social, resource, and environmental factors.
While many of these factors lie beyond the company’s immediate control, understanding them is crucial for gaining insights and enhancing decision-making in areas like product development, venturing into new markets, expanding capacity, adopting new technologies, and devising business strategies.

Some of these factors, such as demographics, can be precise, quantitative, and somewhat predictable. However, many others, like consumer attitudes, political climates, financial structures, lifestyle trends, and product demand, are characterized by imprecision, qualitative nature, and unpredictability.11

The intuitive Logics School was developed in the 70s and 80s and is an 8 Step Process.12

  1. Analyzing the decisions and strategic concern 12
    → identify or uncover a decision, a strategy or a specific important question for the company.
  2. Identifying the key decision factors
    → build a list of key factors that have the capability to influence the success or failure of the decision under analysis
  3. Identifying the key environmental forces
    → list and sort out the “Driving Forces” of the macro-environment influencing the “Key Factors” defined in the previous stage, trying to establish a “map” of interrelations between them. Differentiate between forces that, by their characteristics, can be considered as “pre-determined” elements and those whose evolution is considered to be highly uncertain. This usually needs extensive research into markets, new technologies, political factors and economic forces.
  4. Analyzing the environmental forces
    → ranking the key factors and the driving forces on the basis of two criteria: 1) the level of importance to the success of the decision or to clarify the central question of the process; 2) the uncertainty level associated to those drivers and trends. Determine the two or three most important and relatively independent uncertainties that will form the two axes around which we will build the scenarios.
  5. Defining scenario logics
    → development and selection of general scenario logics according to the matrix resulting from the two uncertainty axes of Step 4
  6. Elaborating the scenarios
    → incorporate the previously identified Key Factors and Driving Forces, along with the chosen scenario logic, to develop a timeline for each narrative. It’s important to empathize key events to ensure coherence in the scenarios.
  7. Analyzing implications for key decision factors
    → explores the implications of the developed scenarios to the decision or major question. At this stage it is important to draw conclusions about the main decision or clarify the central issue, based on each of the scenarios built.
  8. Analyzing implications for decisions and strategies
    → select “leading indicators” that will allow us to know in advance which scenario is closer to happen in reality (for more on how to figure out Strategy out of a Scenario see Module 4)