Tutorial: Scenario Analysis

A tutorial to teach you how to conduct a systematic analysis of possible futures in any field of interest. The tutorial can be delivered in a one-hour undergraduate class session or expanded as desired to serve as the basis for a full-fledged professional scenario analysis.

Undergraduate Version. The one-hour introductory tutorial covers all the basic procedures in the methodology. Three to six one-hour class sessions are recommended for an undergraduate scenario analysis class project to provide time to introduce key proprietary extentions to scenario analysis methodology, including milestone mapping, dynamics, and complexity theory. Recommended homework exercises will be provided to follow each presentation. Students serve as the domain experts to construct the scenarios. Longer sessions place more emphasis on the substantive details of the domain under investigation, with the tutorial transforming incrementally into a full analytical exercise.

For an undergraduate class, 3-4 class sessions are recommended to teach students enough to do their own scenario analysis projects, with homework assignments after each session. .

Professional Version. To create a “professional” scenario analysis, i.e., for the situation where the substantive details rather than learning the methodology are the point of the exercise, it may be advisable to assemble a team of outside experts.

****************************************************

What is Scenario Analysis

Scenario analysis is a method of thinking rigorously about the future. Approaches to scenario analysis differ; my approach starts with state-of-the-art structured techniques and then extends them with innovative steps that enhance the method’s rigor by incorporating dynamics and scenario evolution. The underlying dynamics are the forces that cause the surface behavior and thus are essential to understanding what is happening. Scenario evolution is critical because in the real world, scenarios do not just happen and then stop; on the contrary, reality jumps around, first heading in one direction and then another. Scenarios are no more than snapshots or, if you prefer, signposts of a possible situation. Reality is constantly evolving, so to make scenario analysis a practical analytical tool, the focus should be on understanding the underlying dynamics that cause behavior to evolve, first in the direction of one scenario and then in the direction of another.

The GPE Approach to Making Scenario Analysis Effective

  • Step 1 — List driving forces
  • Step 2 — Categorize driving forces into mutually exclusive groups
  • Step 3 — Select the 2-3 most important groups       
  • Step 4 — Define axes & make diagram

    • political-motivation-model-3d.jpg

  • Step 5 — Create scenarios
  • Step 6 — Define milestones (historical baseline & forecasted for each scenario)
  • Step 7 — Plot milestones on diagram

    • palestine-futures-5-7-2007-update.jpg

  • Step 8 — Identify dominant dynamic for each scenario

    • iran-israel-respect-1.jpg

  • Step 9 — Plot dynamics

    • modeling-behavior-dynamic-for-dark-gray-to-red.jpg

  • Step 10 -Analyze & plot forecasted evolution of reality through the scenario landscape

    • modeling-behavior-scenario-evolution-for-true-believer.jpg fig-1-for-jan-12-pub-pakistani-political-evolution.jpg

  • Step 11 -Analyze the results as a complex adaptive system.