Once you have established a scope (see previous article), you have a clear picture of what the scenarios should and should not cover and how far into the future you should look. The next step is to look at the external environment. Scenario planning is a method where you look ‘outside-in’ at important developments in the outside world. Towards developments that you have no control over yourself, but which do raise the issues that your organization must anticipate. In the past, we had to talk like a salesman to convince organizations that external developments, whether certain megatrends or emerging game changers, could dramatically change their playing field. With a ‘dotcom bubble’, two global pandemics, a debt crisis, the Arab Spring, Trump in the White House, a nuclear disaster, Brexit, a refugee crisis, and the war in Ukraine that characterized the past two decades, this message has sunk in. And with, among other things, new waves of international protectionism, conflicts over scarce production resources, disruptive technologies, climate issues, growing social divides, and double aging in prospect, organizations can brace themselves for the future. It is therefore more important than ever to get a good idea of what is happening in that complex, uncertain external world.
Of course, you can call on the help of ChatGPT for this, but it is especially valuable to do this together within an organization, to learn from each other’s perspectives. It can also help to involve people from outside (experts, unconventional thinkers, stakeholders) in this process. Together, you can see more and better assess developments. Identifying relevant external developments is easier said than done, as humans have several psychological limitations, or filters, that can distort our view of the outside world.
Our filters distort our perception
Leventhal & March wrote the influential article ‘The myopia of learning’. They provide an overview of myopias (or filters) that cause us to misinterpret information. The most important ones are temporal, spatial, and hubris myopias. Temporal myopia states that in filtering information, short-term priorities always take precedence over long-term ones. Spatial myopia explains why we often get stuck in existing structures and find it very difficult to anticipate change. Hubris myopia says that we often see lessons and insights from the past as guiding for the future.
Therefore, if you want to create scenarios or just perform a trend exploration, it is important to be aware of these myopias and to keep each other sharp on tunnel vision.
The external environment
To have a complete understanding, it is important to proceed systematically, to peel the external environment like an onion. The outermost ring is formed by the macro environment, and the middle ring by the organization’s immediate environment. In our article, we explain what these environments are and what useful tools are available to explore them.
Would you like to learn more about exploring the external environment, then download the article here.
Jeroen Toet is a senior strategist at Jester Jester Foresight. For over 10 years, he has helped organizations in the private and public sector make robust choices for the future using different foresight methods, among which scenario planning.
Question regarding this article? Get in touch with Jeroen: firstname.lastname@example.org of +31 6 11 45 13 11