How can you create challenging scenarios that are relevant and realistic?

1 Define your focal question

The first step is to define your focal question, which is the main issue or problem that you want to address with your scenarios. It should be clear, specific, and relevant to your context and goals. For example, you might ask: How will the COVID-19 pandemic affect our industry and customers in the next five years?

2 Identify key drivers

The next step is to identify the key drivers, which are the factors or forces that influence your focal question. They can be internal or external, positive or negative, certain or uncertain. You can use various sources and methods to gather and analyze data, such as PESTEL, SWOT, stakeholder analysis, or trend analysis. For example, some key drivers for the COVID-19 scenario might be: vaccine availability, consumer behavior, government regulations, or digital transformation.

3 Generate critical uncertainties

The third step is to generate critical uncertainties, which are the drivers that have the most impact and the most variability on your focal question. They are the ones that create the most difference between scenarios and the most challenge for your strategy. You can use a matrix or a diagram to plot the uncertainties along two axes, creating four quadrants. For example, you might plot vaccine availability (high or low) and consumer behavior (adaptive or resistant) as your critical uncertainties.

4 Develop scenario narratives

The fourth step is to develop scenario narratives, which are the stories that describe each quadrant in detail. They should be coherent, consistent, and plausible, but also diverse, surprising, and provocative. You can use a template or a framework to structure your narratives, such as: title, summary, timeline, events, actors, outcomes, or implications. For example, you might name one scenario as: "The resilient recovery", where high vaccine availability and adaptive consumer behavior lead to a fast and smooth recovery of the industry and customers.

5 Test your scenarios

The fifth step is to test your scenarios, which means to evaluate their quality and usefulness. You can use various criteria and methods to test your scenarios, such as: validity, reliability, relevance, comprehensiveness, or creativity. You can also use feedback, workshops, simulations, or experiments to test your scenarios with different stakeholders, perspectives, or actions. For example, you might ask: How would our current strategy perform in each scenario? What are the strengths, weaknesses, opportunities, and threats of each scenario?

6 Use your scenarios

The final step is to use your scenarios, which means to apply them to your strategic decision-making and action-taking. You can use your scenarios to: identify and prioritize strategic options, assess and mitigate risks, monitor and update signals, communicate and engage stakeholders, or learn and adapt. For example, you might use your scenarios to: develop a contingency plan, create a balanced scorecard, design a scenario dashboard, or conduct a scenario workshop.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?