SCENARIO BUILDING

Scenarios are different quality models of “plausible futures”. They give a deeper understanding both of the potential environments in which a company might have to operate and of what a company might have to do today.
On the basis of this information, you can make some predictions about the future and then you can apply them to possible future scenarios which are based upon the present time.
Western companies often rely on single forecasts and market trend analysis. However, these are static predictions and do not provide any information about interactive cycles opportunities.
On the contrary, Scenario Building helps you to identify a range of potential opportunities that can make company planning and decisions more flexible. If you are not able to formulate accurate forecasts about the future, you need to have a flexible approach to any possible situation.
Scenarios address specific problems. To develop scenarios, follow these steps:

1. State the specific decision that needs to be made.
2. Identify the major environmental forces that impact on the decision.

Example 1

Suppose your company needs to decide how to invest R&D funds in order to be positioned for opportunities that might emerge by the year 2020. The major environmental forces might include:

- Social bonds;
- Economic growth;
- International trade access;

3. Scenario building. Build scenarios based on the principal forces, by using the information available to you;
4. Identify business opportunities within each scenario;
5. Examine the opportunity links and synergies across the range of scenarios. This will help you to formulate a more realistic strategy for investment.

This technique can be easily implemented and work group members are neither required to be experts in any specific matter, nor to cooperate too close. Scenario building can especially help you to foresee the technological developments of a given company area.

[Source: www.mycoted.com]

CLASS	B
PHASE	External mapping
DESCRIPTION	Scenarios are different quality models of “plausible futures”. They give a deeper understanding both of the potential environments in which a company might have to operate and of what a company might have to do today. On the basis of this information, you can make some predictions about the future and then you can apply them to possible future scenarios which are based upon the present time. Western companies often rely on single forecasts and market trend analysis. However, these are static predictions and do not provide any information about interactive cycles opportunities. On the contrary, Scenario Building helps you to identify a range of potential opportunities that can make company planning and decisions more flexible. If you are not able to formulate accurate forecasts about the future, you need to have a flexible approach to any possible situation. Scenarios address specific problems. To develop scenarios, follow these steps: 1. State the specific decision that needs to be made. 2. Identify the major environmental forces that impact on the decision. Example 1 Suppose your company needs to decide how to invest R&D funds in order to be positioned for opportunities that might emerge by the year 2020. The major environmental forces might include: - Social bonds; - Economic growth; - International trade access; 3. Scenario building. Build scenarios based on the principal forces, by using the information available to you; 4. Identify business opportunities within each scenario; 5. Examine the opportunity links and synergies across the range of scenarios. This will help you to formulate a more realistic strategy for investment. This technique can be easily implemented and work group members are neither required to be experts in any specific matter, nor to cooperate too close. Scenario building can especially help you to foresee the technological developments of a given company area. [Source: www.mycoted.com]
REFERENCES	Miller W.C., The Creative Edge: Fostering Innovation Where You Work, Reading, Mass., Addison-Wesley, 1987. Andriopoulos C., Lowe A., Enhancing Organizational Creativity: the Process of Perpetual Challenging, Management Decision, Vol. 38, n. 10, 2000, pp. 734-742. De Bono E., Serious Creativity Using the Power Lateral Thinking to Create New Ideas, The McQuaig Group, 1992. Lawson B., Samson D., Developing Innovation Capability in Organisations: a Dynamic Capabilities Approach, International Journal of Knowledge Management, Vol. 5, n. 3, 2001, pp. 377-401.