1.4.1 Basic criterias for scenario planning
Basic criterias for scenario planning in SMEs
Foresight and scenario planning are closely interconnected, as both methods aim to systematically explore and evaluate future developments and uncertainties. Foresight provides a comprehensive overview of potential longterm future trends, while scenario planning uses these insights to develop detailed and strategic future scenarios.
Scenario planning …
- as an agile tool, enables SME managers in particular to identify future uncertainties and develop suitable action plans to respond to changes and take advantage of emerging opportunities.
- is important for managers to understand how disruptions affect strategic and operational decisions in the company in order to initiate effective changes in the team or organization.
- for your own company comprises various steps for which different information and company data is required.
- not only affects strategic decision-makers, but also various areas such as innovation management, organizational development and knowledge management.
- have various models for appropriately evaluating an organization’s dynamic foresight activities. One of the most established models is Rohrbeck’s Organizational Future Orientation Model (2010) with the five dimensions of “use of information”, “methods of integration”, “people and networks”, “organization” and “culture”.
Basic criterias based on planning steps
- 1. Task analysis
- 2. Influence analysis
- 3. Trend projection
- 4. Alternative bundling
- 5. Scenario interpretation
- 6. Consequence analysis
- 7. Disruptive event
- 8. Scenario transfer
1. Task analysis
Definition of topic, goal and time horizon
- Why: What is being considered?
- How: required company information for the scenario field
- Company, products, industry, technology, data, etc.
- What: Definition of the topic or scenario question, clear objectives and a time horizon for the scenario planning process.
2. Influence analysis
Identification of trends and uncertainty factors
a. Identification of fundamental trends
- Why: What influences the development?
- How: required company information on influencing factors
- Politics, law, technology, environment, economy, infrastructure, etc.
- What: Identification of independent but relatively certain trends with a strong influence on the future.
b. Identification of critical uncertainty factors
- Why: Which influencing factors are particularly important?
- How: SWOT analysis and required company information on key factors
- Tax laws, infrastructure, prices & resources, competition, etc.
- What: Identification of key factors or uncertainties that influence future developments. These can be internal or external factors.
3. Trend projection
Identification of influencing factors and development of scenarios
a. Identification of descriptors (influencing variables)
- Why: Which indicators show how key factors could change?
- How: required company information for descriptors
- Amount of tax concessions per year, number & equipment of infrastructure, prices for resources, market shares of competitors, etc.
b. Development of scenario bases and drafts
- Why: How could the indicators and descriptors change?
- How: required company information on key factors
- Changes (none, low, high), equipment (rarely occasional, available everywhere), prices (falling, same, rising), market shares (competitors dominate, few are active, market is fragmented) etc.
- Supply-demand analysis with needs analysis for effectiveness, risk and opportunity analyses for planning security
- What: Development of a variety of scenarios that depict different combinations of trends and uncertainties. Creation of diverse, contradictory and plausible scenarios.
4. Alternative bundling
Development of strategic options
- Why: Which trend projections would fit together? (consistency check)
- How: required company information for alternative bundling
- Testing with consistency matrix or comparison (fit, favorability, reinforcement vs. non-fit, exclusion, contradiction)
- What: Development of options for each scenario with prioritization and identification of drivers for each uncertainty. The aim is to bundle alternative assumptions that are consistent with each other.
5. Scenario interpretation
Analysis of the strategic implications
- Why: How can the projections be summarized into an overall picture of individual trend projections (=scenario)?
- How: Use of scenario techniques and recourse to existing company information
- What: Detailed description of the scenarios and their evaluation based on their relevance and probability prioritization of the scenarios according to their importance for the company’s strategy.
6. Consequence analysis
Identification of opportunities and risks
- Why: What opportunities and risks can be derived for the company?
- How: Risk and opportunity analysis (consequence analysis) based on company information
- What: Identification of potential risks and opportunities associated with each scenario. Derivation of the consequences for the necessary measures in the context of the objectives and corporate strategies.
7. Disruptive event
Recognizing internal and external developments
- Why: Which developments could demonstrably affect the scenarios developed?
- How: Conduct a disruptive event analysis between company and scenario
- What: Recognizing possible external and internal developments that could negatively or positively affect the scenarios. Deriving conclusions for reactive or preventive measures.
8. Scenario transferu003c/strongu003e
Implementation of the scenarios
- Why: How can the scenarios be implemented in the company?
- How does collaboration and discourse take place within the team?
- How: Development of action plans and guiding principles for the corporate strategy
- What: Implementation of strategies and action plans with continuous monitoring of measures and adjustments that can be taken in the event of each scenario occurring (via early warning systems).
The entire scenario planning process can only be implemented collaboratively and with various functions within the company management.
Schwartz (1991), Rohrbeck & Kum (2018), Chermack (2011), Gartner (2020)