After exploring the external environment and making a selection of the most important “game-changing” developments, you delve into that selection in search of core uncertainties that will form the basis of your scenarios. This is the crux of scenario thinking, but at the same time, it is also the most counterintuitive step. As humans, we don’t like uncertainty; we seek certainty instead. A common response to uncertainty is often to ignore it. Not exactly a good strategy, as our world is inherently uncertain. Taking into account every uncertainty is also not healthy. That leads to paralysis, as in the thought experiment of the philosopher Buridan’s donkey. It couldn’t choose between two bales of hay and eventually starved. With scenarios, you try to find a middle ground: you search for uncertainties that can drastically change your operating environment. By thinking through these uncertainties in scenarios (the next step), you can anticipate and make future-proof choices.
Core uncertainties form the basis of scenarios. We have had good experiences with scenarios based on a cross-axis with two core uncertainties. Of course, you don’t have to limit yourself to two, but keep in mind that with each uncertainty or axis you add, the number of scenarios doubles. If you choose four core uncertainties as a basis, you’ll end up with 2x2x2x2, which is 16 scenarios. Try working out and discussing all of those! You won’t gain much wisdom from that. From experience, we know that four scenarios are really the maximum for having a good strategic discussion.
To arrive at that point, you’ll need to go through two steps. The first is to analyze your net list of trends to identify possible core uncertainties. The second step is to actually choose a cross-axis because there are often multiple options. The cross-axis is like scaffolding in construction. It is necessary for building well, but in the end, you should remove it and have a solid house standing. The same goes for scenarios. The cross-axis serves as the starting point for thinking through multiple possible futures, but ultimately, each future story should be readable and plausible even when you remove the cross-axis.
Analyze for possible core uncertainties
A potential core uncertainty should meet three criteria: 1. high impact, 2. high uncertainty, 3. high causal influence. Based on these criteria, you will filter your “trend complex,” which is your net list of external developments.
If you would like to learn more about this trend analysis and the eventual selection of a cross-axis as the basis for scenarios, you can 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