Scenarios are an essential element of strategic planning. Scenario work helps organisations cope with an uncertain business environment; prepare for alternative futures; and create a solid base for strategic choices. Capful is one of the pioneers of scenario-based strategic planning. Built on the inductive scenario method, our approach is systematic, effective and refined in hundreds of scenario projects.
Capful’s new scenario planning tool, the Scenario Builder™, further enhances the efficiency and functionality of our inductive approach. The Scenario Builder™ draws on consistency analysis to assess the interconnections and logical inconsistencies between multiple alternative scenarios as well as on mathematical algorithms – familiar from machine learning – to produce an informative, interactive scenario map.
How does the Scenario Builder™ work?
- Produces all plausible scenarios based on uncertainties identified in the operating environment and alternative future developments of these uncertainties.
- As an example, 10 key uncertainties, each with 4 alternative outcomes, make it possible to generate about one million different scenarios.
- Analyses internal inconsistencies within scenarios.
- Using consistency analysis, the Scenario BuilderTM assesses which alternative outcomes of the identified uncertainties can logically coexist in the same scenario. The tool then selects, for example, the 1,000 most internally consistent scenarios for further examination.
- Classifies the most consistent scenarios based on their similarities.
- Using mathematical algorithms, the Scenario BuilderTM organises the most logical scenario alternatives – selected in the previous phase – into groups of similar scenarios.
- Visualises similar scenarios as clusters on an informative, interactive scenario map .
What benefits does the Scenario Builder™ provide?
- A comprehensive analysis – involving all alternative scenarios – helps develop a multifaceted view of possible futures in a complex operating environment. Ignoring plausible scenarios is virtually impossible.
- Visual clustering provides a clear overview of the scenario space made up of alternative scenarios. The interactive map makes it easy to navigate the space and select differentiated scenarios for further analysis.
- The informative map draws attention not only to the scenario clusters, but also scenarios on the outskirts and between the clusters, boosting creative thinking with new – even unexpected – perspectives.
- The user-friendly, interactive tool is helpful in understanding the structure and logic of scenarios and in making it easier to compare alternative scenarios.
- A systematic and transparent analysis helps build consistent, plausible and differentiated scenarios – improving the quality of strategic planning based on the scenarios.