steps to building effective scenarios
Adopting a scenario approach to gain strategic insight into the future of a country or an economy therefore has significant advantages over a forecasting approach. So how would one go about building such a set of scenarios? When applied to a country’s political or economic future, as in our case, this process should follow the following ten steps:[8]
The first step in any scenario-building exercise is to decide exactly what one wants to achieve. Our aim is to establish what it will be like to live in South Africa in 2024. Will there still be good schools? Will property rights still be respected? Will our children find jobs, and be able to study at good universities? Or will conditions have deteriorated? Will the poor have risen up in a second revolution? Will a racist government rule with impunity? Will South Africans with the means to do so look for ways of escaping, and start a new life abroad?
The second step is to establish if citizens want to change the status quo in the country in question or whether they are satisfied with their circumstances in the society being studied. A thorough understanding of the current political, economic, and social environment should be developed. We need to establish who is participating in those environments, and what their expectations are. Are they rich or poor? Content or desperate? And, if so, to what extent?
Again, in our case, this will involve describing what is actually going on in South Africa today. We need to know how the economy is performing, and whether it can deliver the growth, jobs, and wealth to satisfy public expectations. Do we really have the worst education system in the world? What are the current levels of corruption in the public and private sectors? Are they worsening or improving? How angry are the young and unemployed really?
The third step is to understand whether major actors or role players in the country (such as political parties, business, civil society, the youth, and the media) have the means to change the future. Is the society in question a free and open one that can easily be changed by means of lobbying, political activism, and electoral processes? Or is it a closed and undemocratic political system that can only be changed through violent revolution?
In our case, this will depend on whether the rule of law is maintained, property rights are respected, the courts remain independent, the media is free, civil society is allowed to operate, and free political activity is allowed. The alternative would be that all these democratic institutions are eroded by an increasingly powerful state until South Africans lose all control over their future and the government can rule with impunity.
The fourth step is to gain a thorough understanding of the policy environment in the country or economy being studied. What are the major current policies? How successful are they? If they are not successful, why have they been adopted? If the government is under pressure, does it have room to move on policy, and in what direction?
In our case, the question is: Does the government have a vision or national plan, and can it work? Much has been written about the National Development Plan (NDP) that the cabinet recently adopted as South Africa’s developmental blueprint for the next 20 years. However, some analysts say the plan is an exercise in smoke and mirrors, and that the government has no real long-term vision for South Africa, or the political will to implement that vision.
The fifth step is to take all the information produced by steps 2, 3, and 4 and to set them out in a structured list of trends. Initially this will result in a huge amount of often contradictory and seemingly confusing information. However, as one begins to sort and organise the information, some clear trends – between, say, 30 and 50 – will begin to emerge.
The sixth step then is to identify a number of major trends that will play a key role in determining the future direction of the country or system in question. Peter Schwartz, who succeeded Pierre Wack at Shell, and other scenario planners describe these as ‘key driving forces’. These trends are so powerful that, depending on how they play out, they have the capacity to change the future of any given system or country.
While this should not be artificially limited in one way or another, some five to ten of these trends can usually be identified. These trends or key driving forces can lead us to diverse extremes. The direction economic policy takes is a typical example of such a trend – with nationalisation on the one extreme and private ownership of the economy on the other. In this sense these trends provide us with highways that we can use to help navigate our way into the future.
The seventh step is to identify important road signs and route markers along these highways to the future. These will show that we should turn one way or the other in order to reach a certain destination. U-turns are also possible, should the government start to run out of road in a specific direction. There will also be warning signs and even stop signs, where the economy runs out of steam. These road signs and route markers will provide us with much of the information we need to navigate our way into the future.
At the same time, we should bear in mind that trends do not act in isolation of one another. Rather, complex systems theory dictates that these trends, and the actors driving them, constantly interact with each other to produce results far greater than the sum of their parts. If one wants to use the scenario method, it is vital to understand how these trends interact, and what the results of that interaction may be.
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