What are the best practices for using scenario analysis to guide organizational change?

1 Define your scope and purpose

Before you start creating scenarios, you need to have a clear understanding of why you are doing it and what you want to achieve. What are the key questions or challenges that you are trying to address? What are the main objectives or criteria that you are using to evaluate your options? What are the relevant time frames and boundaries that you are considering? Having a well-defined scope and purpose will help you focus your analysis and communicate your results.

2 Gather diverse perspectives and data

Scenario analysis is not a solo exercise. It requires input from different stakeholders, experts, and sources of information. You want to capture the diversity of views, assumptions, and expectations that exist within and outside your organization. You also want to collect relevant data and evidence that can support or challenge your scenarios. This will help you create more realistic, credible, and useful scenarios that reflect the complexity and uncertainty of the future.

3 Identify key drivers and uncertainties

One of the main tasks of scenario analysis is to identify the key drivers and uncertainties that will shape the future. Drivers are the forces or factors that influence the direction and magnitude of change, such as trends, events, or decisions. Uncertainties are the aspects of the future that are unknown or unpredictable, such as outcomes, probabilities, or impacts. You want to prioritize the drivers and uncertainties that are most important and uncertain for your scope and purpose, and use them to create different scenarios.

4 Create and test multiple scenarios

The next step is to create and test multiple scenarios that represent different plausible futures. You can use different methods or frameworks to generate and structure your scenarios, such as axes, matrices, or narratives. You want to ensure that your scenarios are consistent, coherent, and contrasting, meaning that they follow a logical storyline, avoid contradictions, and cover a range of possibilities. You also want to test your scenarios against data, evidence, and feedback, and refine them as needed.

5 Analyze and compare scenarios

Once you have your scenarios, you need to analyze and compare them to understand their implications and differences. You can use different tools or techniques to do this, such as SWOT analysis, impact analysis, or sensitivity analysis. You want to identify the commonalities and variations among your scenarios, and how they affect your objectives or criteria. You also want to assess the strengths and weaknesses of your current strategies or plans in each scenario, and identify potential gaps or opportunities.