Introduction to Scenario Building

A scenario is a way for to create or craft a narrative.

Scenarios can be either inspiring or shocking - both provide a tremendous value for stimulating the imagination.

Scenarios are comprised of a variety of different possible futures and based on observable trends.

A good analogy to a scenario is a science fiction or historical fiction story, in that it is based on fact, but incorporates the fiction, the fictive, or fantastic into the story.

Scenarios are a way to craft/predict a future based on a variety of different futures based on trends.

The steps in scenario building are as follows:

1. Specify your reality
Are you talking about a firm, a country, or industry? What time frame is german to the scenario? Are we discussion this weekend, this week, a day, a quarter, semester, a one year plan, five year plan, ten year plan, one hundred year plan, etc . . .

2. Specify the industry
See the playlists of Industry Analysis I and II for assistance in defining industry boundaries.

Ask yourself the following questions to assist with defining industry boundaries:

What makes that industry attractive?
What are the specific strategic groups and their accompanying key success factors?
What time horizon are you looking at short medium or long and what will take place in those horizons?

3. What are the specific variables german to your scenario? Create a list of different variables called actors and factors.

Use the Dynamic environment or pest analysis to identify actors and factors.

Asking yourself these questions can be used as a check list to ensure you did not miss any variables.

There are two types of variables in scenario building - Pivot and Key Variables.

Pivot variables are defined by high uncertainty (or low certainty, depending on how you draw your chart) and high impact. These are the variables that we don't know if they will occur, but we better pay attention if they do! These are the events that will make or break a firm. Use pivot variables to derive the "fiction" piece of scenario building.

Key Variables
These variables are defined by high impact and high certainty (or low uncertainty, depending on how you draw your chart). These variables are considered basic statements of fact, are seen an irrefutable, and have a impact on the organization or firm in question. If you are unsure if you are dealing with a pivot variable - ask your colleagues - snickers will confirm it is a key variable because people will be surprised you had to ask something so obvious.

Key Variables form the basis of the "fact" piece of the scenario.

How to write a scenario:
Smash one key variable with two pivot variables. This is your golden ratio - if you use two key variable, then use four pivot variables, etc.

Blend the fantastic with the obvious - this is what makes a good narrative. The wilder the story, the more useful the scenario.

Repeat combining key and pivot variable three times to come up with three mini scenarios.

Write a little narrative to go with each mini scenario. Usually a mini scenario is three sentences long. Each sentence corresponds with one of the variables you have chosen. Make sure to link the sentences together so the narrative is not too choppy!

The pick one mini scenario and narrative to recommend it to the boss.

Its good to have a couple of scenarios that are not really that great and one that is great.

Allowing the boss to choose empowers the boss so they can pick and choose which appeals to their goals.

Never give just one scenario - the boss will feel as though you are telling him/her what to do.

[anthonywalker]

It is wonderful that this channel is dedicated to offering high-quality education at no cost. It is a genuine gift to students everywhere.-Anthony Walker

[cateriabrown]

I appreciated the comparison made between scenario building and genres like historical or science fiction. It clarified the balance needed—avoiding scenarios that are overly mundane with only factual elements, yet also steering clear of extremes that render them too unrealistic.-Cateria Brown

[lyss]

from this video i learned that what scenario building helps you build a craft and narrative based on different futures. this video helped me understand the meaning of scenario building!

[justinjoseph]

I love how you spoke about the importance of scenario building and the different parts of it.

[sydneyjohnson]

This video helped me understand scenario building by connecting to the type of books I enjoy. This aspect of these videos is what helps keep viewers engaged. Sydney Johnson

[MontezHolton]

This introduction was a great reminder in breaking down the parts of scenario building. Its something that we as working professional do on a daily to help solve problems and this video provide detail to how to be more effective with constructing the scenario(s)

[antoinetteneal]

Great video explanation about preparing for the future with scenario building. Scenario building is a good way to create or design different narratives as well .

[juaniglesias]

I really liked the comparison between scenario building and historical/science fiction it made it easier to understand that you don't want a scenario that is too mundane that everything is factual but at the same time not something so extreme that it becomes too unrealistic. - J. Iglesias

[israelmares]

This is a great reminder of how important it is to simply lay the groundwork for ideas you have because I have dealt with scenario building before, especially while taking your class.

[auhstens]

I learned about the steps to scenarios building, including the difference between key variables and pivot variables. Very helpful! -Auhsten S

[anasiareynolds]

I think it's so important to have a layout for your ideas and for yourself. It's like having a back up for a back up so you never have to worry. I like scenario building I think I might use this for when I start my business back up.

[latreacesankey]

This video was good at explaining how you can prepare for the future by scenario building. The opportunity to think thorough options(scenarios) to present to leadership(industry) was very informative. I liked the reference to historical/science fiction which provided a clear perspective.

[EdgarRamirez-zgiu]

Never new what scenario building was, let alone how to scenario build. Im glad I learned this! -E. Ramirez

[aaliyahriddle]

I learned that scenario building is essentially the creation of a narrative for your business!

[tochukwuikeh]

I liked how you explained pivot and key variables and how we need to balance them correctly. A scenario with too many key variables becomes boring - Emmanuel Ikeh

[viel_breach]

Definitely the best explanation of scenario building I have ever seen! Thank you so much for the upload!

[robertadams]

Great video discussing the concept of scenario building and its relevance to business history lectures and the dynamic environment. Scenario building is like crafting narratives based on possible futures. - Robert Adams

[eatmeatdogcats]

Scenario building is very new to me. After watching this video, I was about to get a better understanding on how scenario building works. - C. Thong

[anitabhujel]

A great introduction to Scenario building and I have a better understanding of it because of the example you provide. I'm looking forward to learning more about it.-Anita Bhujel

[francisdean]

I have never really heard about scenario building until this video but it taught me a lot and gave me a better understading.