6. 6
WHAT IS SCENARIO PLANNING?
Scenarios are stories of potential futures that
capture and frame certain outcomes or situations.
These narratives can be as small as future use
cases or as large as understanding shifting market
dynamics. Scenarios enable us to explore how we
fit within the context of the word, not how the world
fits to the context of us.
Strategic Scenario Planning is a method used to
gain better insight about the future. No one can
predict the future; however, we can make educated
guesses on how trends and drivers come together
to enable certain outcomes to take place. Scenario
planning is just that, it is a process of looking not at
the what will but rather the what might be. Scenari-
os are not intended to be solely rooted in probabil-
ity and instead focus more on the plausibility of a
situation coming to life.
The scenario planning process uses trends and
drivers (see call out A) to explore how these seem-
ingly independent elements might come together to
create plausible futures. We can then explore how
we might fit within that picture and what might have
to change or reframe to grow. By understanding
what the landscape looks like we can then identify
weak signals to leverage if we see certain activities
of our futures coming to light.
As figure 1 illustrates, scenarios can come in many
different timescales or lengths; however, the best
scenarios look more broadly into the future.
WHAT ARE TRENDS?
Trends are the visible effects and
changes taking place within a society.
Typically, we think of trends in fashion
and design, but trends also encom-
pass broader themes such as mobile
commerce and social networks.
WHAT ARE DRIVERS?
Drivers are the less visible effects tak-
ing place within a culture. They are the
deeper-rooted causes that bring about
trends. For example, the diffusion of
smart phone technology and commu-
nications has caused the emergence
of mobile commerce and the ease of
social networks to be adopted.
WHAT ARE WEAK SIGNALS?
A Weak Signal is an indicator that
change is beginning to take place.
These indicators might come in various
forums from R&D to public policy to
changing social perceptions. These
indicators can be used to identify and
make potential change.
CALL OUT A:
8. 8
STEP 1: BUSINESS MODEL CANVAS
The Business Model Canvas (BMC) (Fig. 2) used
in JETPACK’s Business Identification stage from
Business Model Generation is a perfect tool to be
leveraged within scenario planning. As a framework
it is great for exploring how a business model
might adapt iteratively over time in the context of
scenarios.
The BMC is divided into nine key elements
that align with how an organization functions.
The canvas as a tool is intended to explore the
venture’s operations at an easily digestible, high
level. It can be viewed as two sides of a single
coin, with all the elements on the right aligning with
external, customer-facing elements of the business
and those on the left focusing inwardly on how the
venture actualizes it value delivery.
While you can work your way around the canvas
how you see fit, it is easiest to first begin with
your Customer Segments and Value Proposition
and identifying the key external factors first. After
this, you should begin to address the back-end
activities and capabilities that enable you to deliver
your value proposition.
Once you have the foundations of your scenarios
later on, you will be revisiting your Business Model
Canvas in these new landscapes to explore how
you might function in the future.
Payment Providers
Ex. PayPal
Traveler Networks
Key Partners Key Activities
Key Resources
Cost Structures Revenue Streams
Channels
Customer
Relationships
Customer Value
Proposition
Customer
SegmentsPlatform
development &
maintenance
Traveler Networks
Selection of local &
international places
to rent
AirBNB Brand
Platform Development & Design
Local & Traveler Insurance
6-12% Booking Fee (Traveler)
3% Successful Booking Fee (Local)
Word of Mouth
Social Media
Local Events
Partner Program
24/7 Customer
Support
Online
Community Ranking
Local Brand
Ambassadors
Travelers (Renters)
Budget Travelers
Business Travelers
Globetrotters
Stay in unique
places with locals,
meet new people
(traveler)
Rent out and extra
room, share local
knowledge, meet
travelers (local)
Efficient Resource
Consumption
Example of a Service: AirBNB
Investors
Ex. Sequoia Capital
Locals
Ex. High-volume
Local Renters
Videos &
Photography
City & Community
Engagement
Platform
Locals (Leasers)
Extra Room
Social Tour Guides
Expats and Students
Marketing & Community Management
12. 12
STEP 2: DEFINING THE FUTURE TIMESCALE
Every new scenario project must start with a key,
driving question that helps to frame the overall
initiative. What might it be for you? Having a central
question as your guiding light will bound your
project going forward. It is also helpful that your
question not be overly specific and tactical nor
should it be exceptionally broad in scope either.
An example of a too-specific question might be,
“What is the future of hypodermic needs in Cape
Canaveral, FL?” While this question might be one
worth exploring, it is too narrowly focused for the
context of using scenarios for strategy. Being too
vague or broad is also a challenge, such as simply
asking, “What is the future of play?” This too is a
great question to ask and can bring about some
amazing scenarios, but it might also be too vague.
When you frame your scenario question try to land
somewhere in the middle that will be contextually
relevant to your venture’s focus. The middle
ground should be broad enough in scope to
explore many changing dynamics, while relevant
enough to your industry or niche. For example,
“How might the shifting market dynamics between
the East and West affect technological adoption
of solar infrastructure?” This question is broad
in exploration while narrow in a targeted scope.
As you frame your scenario question always be
seeking the middle ground.
Once you have framed your question, the second
question is about timescale. How far in the future
are you looking to build your scenarios in? The best
scenarios can be developed using longer-range
timescales of 10 to 20 years in the future. Where
would you like your narrative to be and what events
might lead up to that?
14. 14
POLITICAL ECONOMIC SOCIAL TECHNOLOGICAL ENVIRONMENTAL LEGAL
Government
Subsidies
City Government
Deepening the River
Xenophobia
Slowness
Zoning Laws
City Ordinance
Legal Barriers
“Old Guard”
Innovation Hubs
Poverty
Death by
Committee
Gerry Mandering
“Local”
Startups
New Business
Growth
Innovation
Built Environment
(Architecture, etc.)
Real Estate
Tourism
Working Poor
Industry/
Manufacturing
Port City
Experience
Economy
Seasonality
Parenthood/
Child Planning
Community Mindset
“The Who You
Know” Factor
Arts Culture
Pocket Communities
Walkable/Bikeable
City
Startup Culture
Coworking and 3rd
Spaces
Foodie Region
Rise of Social Media
Ability to Remote
Work
Social Profiles
Lean Startup
Information Access
Emerging Smart
Cities
Using Technology
for Civic
Engagement
Increasing Cost of
Oil
Community
“Greening”
Social
Entrepreneurship
Cradle to Cradle
Changing
Perceptions to
Commuting
Structure of
Cities/Urban
Development
Increasing
Populations
Tourism
Greenspacing
Rising Culture of
Community
Sustainability
New Laws
Emerging Urban
Plans
Legal Approach to
Addressing Poverty
JOBS Act
Healthcare
Legislation
Equity
Crowdfunding
Fig. 3: PESTEL Analysis
PESTEL FRAMEWORK
16. 16
STEP 4: IMPACT & UNCERTAINTY
With a robust PESTEL analysis compiled we can
turn to understanding Impact and Uncertainty.
The Impact and Uncertainty Matrix (IUM) is a
tool developed from Ian Wilson and Bill Ralston’s
Scenario Planning Handbook: Developing
Strategies in Uncertain Times, which allows us
to explore how various trends and drivers might
affect the venture. The IUM is a lens to identify
those trends and drivers that might play out in the
most critically unknown ways. As a framework it
can be used either simply as a 2x2 or 3x3 matrix
(Fig. 4) with the y-axis assessing uncertainty and
the x-axis examining impact. You can complete the
framework as a two-step process (Fig. 5 & 6):
PHASE: 1 HOW TO RATE UNCERTAINTY?
Begin by plotting your trends and drivers across
the y-axis of uncertainty. How might we best
asses the level of uncertainty? You can think of
uncertainty by leveraging it to initial criteria with
the first being, how visible is this already in reality?
For example, nano technology is becoming big in
the news; however, its direct application within the
market space is still limited. The second criterion is
timescale. If nano technology is still largely in the
R&D phase, how long might it take to fully come to
reality, 10 to 20 years? If this is the case one could
say that this driver might be somewhere along the
middle of the y-axis, because we know it will be
coming.
UNCERTAINTY
IMPACT
LOWH IGH
LOWHIGH
Fig. 4: Impact & Uncertainty Matrix
18. 18
STEP 5: LEVERAGING LOGIC AXIS
Logic axis allow you to take the most interesting
trends and drivers and explore how they interact
and create scenario foundations. A logic axis is
essentially a 2x2 diagram that takes two trends
or drivers and compares them as extremes. You
can use this to then think of exploratory scenario
vignettes.
You can begin by picking one trend and placing
it on the center of a single axis and then identify
two opposing outcomes. For example, if we use
nano technology as a trend, on one end you
might decide that it could be used for healthcare
innovation, while on the other, it might be used for
technological warfare (fig. 7). This can be done for
a second trend or driver for the other axis.
Once you have assembled a 2x2 you can then
explore how these might come into play with one
another in each of the four quadrants (fig. 8).
Depending upon how complex you are looking to
develop your scenario narratives, it is helpful to do
a series of logic axis to visualize different vignettes
within your story. The more you develop the more
rich and varied your narratives can become. Use
the blank templates on the following pages to guide
your scenario development.
Fig. 7: Logic Axis Structure
TIP: If you are having trouble directly identifying how two extremes might
come together or create a potential outcome it is encouraged you revisit
your research and findings for added inspiration. It might also be helpful
to use a mind map to explore how various elements come together as well
as thinking in terms of analogy or comparison.
EXTREME EXTREME
TREND
OR
DRIVER
20. 20
STEP 6: BUILDING SCENARIO NARRATIVES
Now that you have complied a series of scenario
vignettes along with your trends and drivers it is
helpful to string them all together. This step in the
process will leverage three phases, the first is a
rating scale of importance of the vignettes; the
second will focus on building the timelines through
backcasting; and the third on the value of naming.
PHASE 1: RATING RELEVANCE/IDENTIFYING
CENTRAL THEMES
The first step of this process to use the Scenario
Score Card (SSC) (fig. 9) to identify key and central
themes that will run through out the scenarios. The
SSC is a tool to evaluate both relevance and major
story elements while cataloging supporting and
supplemental vignettes to build into the overall
narratives.
To use the SSC you must first identify four key
factors that align within your central question that
are a major focus for the scenario planning project.
Using the example above for solar technology, four
factors might include the diffusion of photovoltaic
technology, changing consumer perspectives,
increasing energy needs, and shifting economic
relationships. Each of these factors play a part
TIP: To align your factors even further, you can weight your factors in value
and calculate a percentage for your averages. You can do this simply
by assigning a priority percent for each factor such as Factor A might
have 25% relevance while Factor D might only have 13%. Once you have
chosen your Likert score for the proto-scenario you can then multiply each
by the weight score add the percentages to calculate the totals.
within the guiding scope of the project and each
scenario vignette should be rated on a 1-5 or
1-10 scale for relevance. Refer to the tip section
below for more information on how to weight your
vignettes.
If you chose to build several vignettes in Step 6,
you will find that some become more central than
others; however, you can still leverage the less
important ones to build more dynamic stories.
24. 24
STEP 6: BUILDING SCENARIO NARRATIVES
PHASE 2: PLOTTING YOUR NARRATIVES
Now we have arrived at the most fun part within
the scenario planning process, building scenario
narratives. Strategic scenario planning is not about
building one sole futurescape, but rather it is best
to build four or five core scenario narratives. The
reason for this is that one scenario is too limiting;
two scenarios can be seen as it will be this or
that; and three scenarios are typically viewed as
good, bad, and somewhere in the middle. This
is why four or five make for a stronger position.
Furthermore, scenarios should also not be seen as
entirely negative or entirely positive, just like reality,
they are a mixture of both good, bad, and a lot of
gray. To build strong and rich narratives you must
incorporate a mixture of both good and bad.
Fig. 10: Backcasting
There is no single way to write a scenario narrative;
however the most helpful process is to leverage a
technique called backcasting (fig. 10). Backcasting
allows us to envision our future scenario; set to the
end of the time scale, and build backwards all the
elements and things that might take place between
then and now.
SCENARIO
FUTURESCAPE
PRESENT
MAJOR EVENT
28. 28
STEP 7: ESTABLISHING WEAK SIGNALS
How do you identify weak signals and what are
they really? A weak signal can be thought of as
an emerging indicator to take note of. Identifying
weak signals can have a major impact for your
environmental scans and strategic planning. To
identify potential signals refer back to your scenario
narratives and look for unique pressures that align
to your central question and key factors. Weak
signals can come in a variety of different forms
and may emerge from within wholly unexpected
industries.
The Weak Signal Rate Card (fig. 12) is a simple
tool for keeping track of weak signals. You can
use these indicators and examine how they might
change over time. As they evolve, if they do at all,
it is good revisit them to see if their level of impact
has changed. You can use the blank Weak Signal
Cards to track your own.
Weak signals not only act as benchmarks to
react to, but they provide a greater opportunity to
become proactive based on the new context. If
these pressures were to become true, how might
we find and build new or better offerings? Are their
certain elements that broadly affect our competitors
as well? How might this create a strategic niche?
These are all elements that can be explored in the
context of the scenario planning process.
30. 30
WEAK SIGNAL RATE CARD
TIME FRAME
TO MONITOR
LEVEL OF
IMPACT
INDICATOR NAME: INDICATOR DESCRIPTION:
HOW WILL WE KNOW?
HOW MIGHT WE TRACK IT?
HOW MIGHT WE RESPOND?
IMPACT FACTOR PRIMARY:
IMPACT FACTOR SECONDARY:
NEAR
MID
LONG
LOW
MID
HIGH
32. 32
STEP 8: REVISITING THE BMC
Throughout this exercise you have learned how
to frame, build, and identify strategic scenarios
for your organization. Step 9 focuses on revisiting
your Business Model Canvas (BMC) from within
your scenario narratives. You can begin by looking
at your current state business model and your
Weak Signal Rate Cards (WSRC) to mark where on
your timeline key pivot points may take place. It is
helpful to remember, that these indicators are not
a definitive prediction; however, they are plausible,
fact-based assumptions given the data you have.
How the actual future might come to be, might
be faster, slower, or not at all depending on the
situation.
Once you have marked a handful of various
benchmarks along your scenario timelines, you
can begin to rework your BMC based on the
situation. How might things change? In what ways
might you react? If this situation were to emerge
as true, would it necessarily be a bad thing?
How might we reframe a negative situation into a
positive opportunity? As you work your way around
your new BMCs, think about how you might set
the seeds strategically to explore some of your
identified opportunities.
34. 34
CONCLUSION
You now have a robust set of scenarios, identified weak signals, and a new set of potentially identified
opportunities and pivots, but so what? If no one can reasonably predict the future, what value does this
actually create for me? To answer this we have to look back at the venture’s strategy and its where to
play and how to win positioning. When you understand where you are and where you want to go it is
much easier to explore a wider array of plausible futures to help you get there. The value add of strategic
scenario planning is that it provides teams a better, more rich set narratives to understand how the orga-
nization can better prepare to respond, but adapt as time moves on.
Your scenarios should be used to build support for your current strategic efforts. This process is just one
methodology that should be integrated into the business’s strategic thinking approach.