PLANNING Scenario techniques are used to grapple with uncertainty. Scenario analysis starts by considering what might happen, and then explores a range of future plausible stories. There are many methods for developing scenarios, and they can be used for a variety of purposes. Scenario techniques have implications for how monitoring and evaluation is conducted.
Scenario techniques are used to grapple with uncertainty. Phase 1: Define the scenario question and the time Instead of attempting to predict what is going to happen, horizon. The purpose of undertaking scenario analysis is scenario analysis starts from the ‘what if’ question and defined. For example, what socio-economic changes will we explores a range of plausible and distinct stories of the be confronting in a country over the next five years, and future. how well-adapted are we to respond to these changes? Typically, scenarios are then developed to describe a period Scenarios can be used for a variety of purposes. Most twice as long as the planning period. If the plan is intended commonly, they are used to assist planning and strategy for a five-year period, as in the example above, scenarios development, but they may also be used for other would be developed to describe a ten-year period. purposes, such as to provide early warning indicators of the direction of change, or to support public debate about Phase 2: Identify drivers of change. The futures under desired courses of action. consideration will be driven by a variety of factors. A PESTE analysis (politics, economics, social, technological and Scenario techniques were first developed in war-gaming for environmental) or similar analysis, can be used to identify the Pentagon in the 1960s by Herman Kahn. In their these factors. These drivers of change are then sorted into modern form, they were pioneered by the planning those which are certain and those which are uncertain. At department of the oil multinational, Shell. Shell claims the least in the short-term, factors such as demographic company was able to anticipate the possibility of a decline change, for example, can be considered certain, and data in oil price in the 1980s, and to diversify accordingly. from trend projections can be built into the scenarios. Other factors, such as policy change, for example, are The techniques were introduced into the public sector usually uncertain. The uncertain drivers are used to shape towards the end of the twentieth century, and into the the scenarios. development sector in the twenty-first century. Scenario techniques are now a mandatory requirement for some Phase 3: Develop scenarios. This is where methods differ donors, e.g. DFID, for country programme planning. widely. Here we will use the example of the most widely used method, the two-by-two grid. This should not be taken to mean the method is necessarily the best, or the Developing and using scenarios most appropriate for every use, but it is simple to understand. In the two-by-two grid method, championed There are many methods for developing scenarios. At their by the Global Business Network, the uncertain drivers are core, most share in common the early analytical phases filtered down to the two most important and impactful (see diagram below): drivers. These might be, for example, conflict and governance. Combining the two drivers as two distinct axes creates a grid of four boxes (see diagram). Phase 1: Define the scenario question and the time horizon High Conflict High Conflict Responsive Governance Unresponsive Governance Phase 2: Identify drivers of change Low Conflict Low Conflict Responsive Governance Unresponsive Governance
Phase 3: Develop scenarios
Using all the drivers of change, stories are then developed
to show plausible trajectories of development for each of Phase 4: Apply the scenario these futures. Whatever method you use, it is important to have a workable number of futures to compare. Normally, the number varies between two and four.
