Building Scenarios by the GBN Approach

-- a university of arizona course on methods and approaches for studying the future

Building Scenarios by the Global Business Network approach, as summarized in "The Art of the Long View", by Peter Schwartz. 1991. Doubleday, 258 pages. The titles below are from the book, and the descriptions are partly from the book and partly mine. The book provides much more rich detail for these 8 steps as well as case histories and guidance in developing scenarios. More information about GBN can be found at gbn.org.

8 Steps to Developing Scenarios

 

1. Identify Focal Issue or Decision

What do you really want to know? Define a specific decision or issue where having scenarios will be helpful.

 

2. Key Forces in the Local Environment

What factors influence the focal issue or decision? What will decision makers want to know when making their choices?

 

3. Driving Forces

What major trends and driving forces influence the key forces?

 

4. Rank by Importance and Uncertainty

Rank the key forces and driving forces on the degree of importance and the degree of uncertainty. Make an xy plot with importance vs uncertainty. Those key forces or driving forces that fall in the quadrant high importance and high uncertainty should be looked at carefully as they are more critical to providing different scenarios that are important. Select 2-3 to study further.

 

5. Selecting Scenario Logics

Following the ranking, take the information to define the key variables for building scenarios.

 

6. Fleshing out the Scenarios

Flesh out the skeletal scenarios by looking at key factors and driving forces developed in steps 2 and 3. Each key factor and driving force should be given some role in the scenario. For example, if you had two key factors and 2 driving forces, that is 4 possible combinations that can be built into a narrative about the scenarios.

 

7. Implications

Once the scenarios are defined, look for implications - what could happen if the different possibilities occurred? Build these into your scenarios.

 

8. Selection of the Leading Indicators and Signposts

Relate the scenarios to real situations - some are more likely than others given the trends underway. Then, identify further indicators (e.g., leading indicators) that could alert you if this scenario plays out.

 

Other Considerations

 

1. Beware of ending up with three scenarios

You end up with one of the three as middle or most likely and that then treats it as a single forecast rather than several possible scenarios.

 

2. Avoid assigning probabilities to different scenarios.

The environment for the scenarios are different and it is not realistic to attempt estimating probabilities.

 

3. Pay attention to scenario names

A good name goes a long way - make them memorable and relevant to the scenario.

 

4. Select the scenario building team carefully

Use three considerations: support from highest levels of management, broad representation across functions and divisions, and imaginative people with open minds.

 

5. Good scenarios are plausible and surprising

If the scenario gets you thinking, breaks old stereotypes, and the makers assume ownership and put them to work, then you have a good scenario.