SCENARIO

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.

© INTRAC 2017
Phase 4: Apply the scenarios. How you do this phase ▪ By rehearsing responses to possible futures,
depends on your purpose. If, for example, you were using it organisations become more agile in responding to
for country strategic planning, you would examine how well change.
your purpose played out in each of the futures. You might
▪ Considering multiple futures can help to expose taken-
discover that there would be real problems for you in some
for-granted assumptions and reveal unacknowledged
of the futures. This might lead you either to change your
possibilities.
purpose, so that it was robust across all of the futures, or
build new capacities to allow you to continue to operate in ▪ In volatile environments, scenario techniques reduce
the problematic futures. the risk of betting on just one outcome.
▪ Scenario techniques focus on factors which act as
drivers of change, and permit the identification of
Scenario methods early-warning indicators of the direction in which a
There are too many scenario methods to describe in this situation is evolving.
paper. Below, however, are some of the most common.
However, there are also acknowledged weaknesses, some of
▪ The judgement method (Shell): The Shell Planning which are as follows:
Department, which produces global scenarios about
the future of energy every few years, makes a ▪ The technique is only as powerful as the stories of
judgement about key dilemma facing the sector to alternative futures generated. Poorly used, it will not
produce two or three alternative futures. generate surprises and will reinforce taken-for-granted
assumptions about the future.
▪ The two-by-two matrix (Global Business Network):
This method was described in the section above. ▪ Scenario techniques do not lend themselves as easily
Perhaps the most famous example of this method was to the development of indicators of progress as do
the Mont Fleur scenarios that analysed the future more conventional techniques.
course of a majority government in South Africa, and ▪ In the 30-year history of modern scenario analysis,
was said to be influential on the outcome of there is only limited evidence that it has successfully
negotiations between the apartheid government and anticipated major discontinuities, such as the fall of the
the Africa National Congress (ANC) liberation Soviet Union.
movement. This is still the most widely used method,
though critics argue that it is too mechanical.
▪ Trend extrapolation: There are many variants of this Success and failure factors in
type of method. All such methods describe different scenario techniques
evolutions of major trends: often a ‘high road’, a ‘low
There are many factors that may result in the success or
road’ and a ‘middle road’ or ‘best case’, ‘worst case’
failure of scenario techniques. For example, scenario
and ‘middle case’. This is the approach taken in the
analyses are usually collective activities, undertaken by
climate modelling scenarios developed by the UN
groups of people with expertise in the relevant field. Sub-
Intergovernmental Panel on Climate Change. Some
groups often work on different futures. A key success
critics caution against this approach as likely to lead to
criterion is to select a group to include a wide range of
people opting for the middle way in their planning, and
perspectives (such as practitioners, academics, journalists,
ignoring surprises.
and social activists). Ideally, some of the group will be
▪ Event sequences: This technique identifies key branch working in areas that could be considered ‘islands of the
points in a decision landscape, and develops scenarios future’ (for example, people doing urban work in scenario
of the outcome of alternative choices. This method was exercises dealing with humanitarian relief). This will allow
used, for example, in a Chatham House exercise to the surfacing of uncertainties and identification of
develop early-warning indicators of the direction in surprises. Correspondingly, too narrow a group is likely to
which the situation in Yemen was evolving. produce stories that are not very challenging and which
simply reinforce taken-for-granted assumptions.
▪ Incasting: In this technique, participants in the
exercise are provided with broad brushstroke Another key issue is that the mechanics of most of the
descriptions of alternative futures (developed using techniques are simple. This simplicity can be seductive.
any of the methods described above), and then There is very little science in scenarios, but a considerable
elaborate these futures and the trajectory of events amount of art. Using an experienced scenario facilitator is
that lead to them. advisable to avoid some of the common pitfalls. Among
these are: stories that are not challenging, fruitless debates
about the probability of particular futures, and emotional
Strengths and weaknesses of preferences for some futures over others.
scenario techniques
It is important to note that when using scenario techniques,
Some of the main strengths of scenario techniques are as planning and learning become the same process. It is
follows: essential to keep scenarios, once developed, under review
and updated.
© INTRAC 2017
Links to monitoring and evaluation demands that can mean lengthy delays between the
identification of necessary change and action being taken.
Scenario planning has certain implications for how
planning, monitoring and evaluation are conducted within The second factor is the systems and processes used by an
an organisation, programme or project. Firstly, since a organisation to handle adjustments to plans. Again, for
scenario plan contains elements of planning for multiple scenario planning to be effective it is important that an
futures, conventional monitoring and evaluation (M&E) is organisation has the capacity and desire to react swiftly to
normally accompanied by monitoring of early-warning changing scenarios. However, as Green (2014) points out:
indicators of the direction in which a situation is moving.
This is a distinct type of M&E derived from scenario “Working in complex systems where change is
analysis. In order to respond to changing situations in a intrinsically unpredictable and non-linear means
timely manner, organisations also need feedback loops that above all, having fast feedback loops so that you
allow external changes to be quickly identified. This notice when the system is changing, and respond to
requires decision-making processes that can rapidly it. This is really hard for large organisations that try
translate findings into action. to maintain coherence and direction through a
hierarchy of plans (organisational, departmental,
Secondly, if plans are to be redesigned and redeveloped in team and individual). If, after spending months
changing scenarios they need to be kept light and flexible, agreeing these plans, something changes in the
especially if many different stakeholders are involved. This context that suggests a new direction, it is far easier
means planning formats and procedures need to be to ignore it than rip up the plan and start all over
designed from the start to recognise that plans are likely to again.”
be adjusted, sometimes rapidly, in the face of changing
circumstances. In summary, scenario planning is a technique that relies on
effective monitoring and review mechanisms in order to be
There are two factors that could potentially affect this. One effective. Organisations need the will and the power to
is the requirements of external stakeholders such as donors make changes rapidly in the face of changing scenarios, and
or host governments. There is little point in having a appropriate monitoring and review processes to identify
planning methodology that enables plans to be rapidly those changes.
adjusted if a donor does not allow this flexibility, or makes

Further reading and resources

▪ Peter Bishop, Andy Hines, and Terry Collins (2007). “The current state of scenario development: an overview of techniques”
in Foresight 9 (1) pp 5-25.
▪ Peter Schwartz (1991). The Art of the Long View (Doubleday).
▪ Neil MacDonald (2004). “Success is Extinction: Scenario planning in INGOs” in Development 47 (4), pp 115-120.

References
▪ Green, D (2014). Why scenario planning is a waste of time – focus on better understanding the past and present instead.
Oxfam blog, retrieved from http://oxfamblogs.org/fp2p/why-scenario-planning-is-a-waste-of-time-focus-on-
betterunderstanding-the-past-and-present-instead/

Author(s): INTRAC is a not-for-profit organisation that builds the skills and knowledge of civil society
Neil MacDonald organisations to be more effective in addressing poverty and inequality. Since 1992 INTRAC has
provided specialist support in monitoring and evaluation, working with people to develop their own
M&E approaches and tools, based on their needs. We encourage appropriate and practical M&E,
based on understanding what works in different contexts.

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