Thinking in Scenarios - as a method of innovative strategic planning (part 2)
(translated by Christopher Schönberger/Austrian Armed Forces Language Institute)
“It is not important to know, but to be prepared for the future” (Pericles)
Scenarios in strategic management
Scenarios can be used as part of strategic management, in order to assess existing or alternative strategies, or to develop new ones.
- Assessing existing strategies by means of scenarios
As part of this approach, the existing strategy is examined with regard to its adequacy vis-à-vis alternative developments. In this, the strategy is assessed by comparing it with individual scenarios - how favourable or unfavourable it appears given the respective alternative conditions. The scenarios, as it were, form a test environment if certain strategies and decisions have to be evaluated.
- Developing strategies by means of the thinking-in-scenarios concept
As the first part of this treatise already outlined a generic process of strategic management, this part describes the use of scenarios in this generic process. The use of scenarios in the development of strategies largely corresponds to the concept of scenario management. In this, networked, future-oriented, and strategic thinking are combined (see fig. 5).
This process model was especially influenced by Prof. Jürgen Gausemeier of Paderborn University’s Heinz-Nixdorf Institute and the company ScMI (Scenario Management International), and will henceforth be referred to as the Paderborn Model. By means of this process model it can be ascertained that scenario-based strategy development is strongly follows the generic process of strategic management. In the final analysis, it is, a ‘traditional’ process of strategic management, the difference being that it is consciously based on alternative, possible futures. In this, external scenarios are used for external analysis, and steering scenarios for the internal possibilities.
In the following, the focus is put on those steps of the process which differ from the above-mentioned generic process model.
The Paderborn Model 
Strategic analysis (step 1)
The starting point for achieving a successful strategic orientation is an analysis in which the current situation is depicted just like it is in the generic process model of strategic management. Additionally, an organisational analysis of the generic model is carried out, as well as an analysis of the current environment. The various instruments of strategic management can be employed to this end.
Developing external scenarios (step 2)
Matching the scenario field to the respective design field is crucial to this step. Following the selection and formulation of the external scenarios, the risks and chances inherent in the respective external scenarios are analysed. In order to develop the external scenarios as part of the Paderborn Model, the scenario technique or morphological analysis procedures are proposed.
Developing courses of action (step 3)
In the development of strategy options, two procedures concerning options development can be distinguished:
- developing strategy options directly informed by the scenarios
Many courses of action are reactions to existing environmental developments. In this approach, the effects on the design field are analysed directly from the scenarios.
A good tool for options development is an impact matrix, by means of which the consequences of the scenarios created for the design field are systematically processed. To this end a matrix lists the scenarios as columns, and individual areas of the design field as rows. In a specific cell, the effects of a certain scenario on a specific design field component are investigated.
Developing systematic strategy options and scenarios
In many cases, options development directly informed by the scenarios is no longer enough. The framework conditions concerning an organisation’s options are now much more complex than in the past, and there are too many options which are much too dependent on each other. The demand for future-oriented thinking must not be restricted to the external environment, but has to be consistently applied to one’s design field and field of action as well.
In order to incorporate future-oriented thinking in the one’s field of action, systematic strategy options and scenarios can be developed. Strategy options (or scenarios) comprise an organisation’s alternative, conceivable, and visionary strategies. They form a connection between the classic (environment) scenarios and the strategies initiating action.
In this area, the Paderborn Model shows great application flexibility. Strategy options (or scenarios) can have flexible characteristics, depending on the point of view. They can be located at the competence profile level, in order to develop a task portfolio adapted to future developments. They can also be established at the level of concrete options, by means of which the previously determined vision is implemented. They can, however, also be placed at the visions level. To this end, extensive internal scenarios pertaining to the organisation are developed, in order to draft visionary objectives that lay out the area of possibilities concerning visions.
Strategy options (or scenarios) are hybrids. On the one hand they are scenarios, because they reproduce an area of possibilities by means of alternative visions of the future, and on the other hand they are strategies, as they describe how the organisation will be itself in its environment in future position. This is why the same methods are applied in their creation, and similar elements are used as in the creation of external scenarios:
- influencing factors become strategy elements
- key factors become key elements
- projections of the future become options for the future
After the options for the future have been compiled, they are linked up to form strategy options or strategy scenarios. To achieve this, the procedures for scenario creation presented in the previous chapter are employed:
- with reference to the deductive-intuitive approach (scenario planning or morphological analysis) the term used is strategy options;
- with reference to inductive model-supported approach, options of the future are linked by means of software-based consistency analysis, and the term used is strategy scenarios.
For the strategic management process, the formation of strategy options or scenarios offers numerous advantages: it replaces the focus on a traditional and preferred strategy and also triggers changes in the mental models. Through the intelligent combination of individual options new possibilities concerning actions reveal themselves.
A further advantage not to be underestimated is the fact that during strategy options development wide-ranging strategic discussions can take place in which different ideas concerning the future of the organisation can be openly talked about, with these conflicts being voiced and dealt with.
Developing a strategy (step 4)
Developing a strategy can be regarded as the central step of the Paderborn Model. This is where the results of the situational analyses (external and internal in step 1), the interpretation of the future environment (step 2) as well as potential courses of action (step 3) are merged. Even if they have been worked out in great detail and precision, they do not yet form a strategy. Forming a strategy is a highly creative process which does not lend itself to a mechanistic formal approach.
The central question at this point is: on the basis of how many and which external scenarios and strategy options should an organisation plan? This is why two basic patterns of scenario-based strategies can be distinguished:
- (environmentally) focused strategy
If a strategy is based solely on an external scenario, the term used is (environment) focused strategy. The decision then has to be made in the direction with regard to which scenario the strategy must be optimized.
Porter lists various possibilities:
1) settling for the most likely scenario (if probabilities are used), or
2) settling for the scenario most advantageous for the organisation. Kiesel lists the additional possibility of following the scenario which is the most adverse for the organisation and involves the greatest risks and dangers.
- (environmentally) robust strategy
Environmentally robust strategies are based on several, selected external scenarios, or – possibly – on the entirety of developed external scenarios and should produce relatively satisfactory results in any constellation of data.
Focused and robust strategies can be combined to create the following scenario-based strategies. Between the two extremes of purely focused strategies and fully robust strategies the following scenario-based strategies can therefore be derived:
- essentially, robust strategies are based on courses of action which are ideal for numerous scenarios.
- dual strategies go further as regards use of resources, and aim at concomitantly preparing for various scenarios by means of multiple strategies. This is why for every strategy-forming scenario strategies are developed separately, which are suitable in the event of this scenario becoming reality. This requires a lot of resources and is reminiscent of running with the fox and hunting with the hounds.
- complemented strategies, are quintessentially based on a scenario, they are, however, complemented by individual courses of action, tailored to strategy-critical scenarios.
- hedged strategies also focus on a scenario, with specific risks being met by individual, additional measures which are not linked, but aligned to the total strategy.
- sensu stricto, focused strategies are based on one scenario and are geared towards it.
Flexible strategies constitute a special case of scenario-based strategies. Organisations can increase their flexibility vis-à-vis uncertain environmental developments by gearing their strategy towards multiple scenarios, taking certain important decisions only after individual scenarios have become reality, and consciously dragging delaying inflexible decisions (e.g. high capital investments).
Note: strategy-forming versus strategy-critical scenarios
From the point of view of strategy two types of scenario can be differentiated:
- strategy-forming scenarios are the basis of one’s actions. They are often further substantiated and subsequently serve as the basis for roadmaps and planning.
- strategy-critical scenarios, in contrast, cannot be used as a basis for one’s strategies. They are, however, not negligible, which is the central point of strategy management. They have to be kept in mind and therefore form a focal point in a systematic process of early detection within scenario monitoring.
Additionally however, the Paderborn model also works with strategy options or scenarios.
These strategy options represent the second dimension in the Paderborn Model's deduction of strategy forms. Taking this second dimension into consideration, Fink identifies the following strategy archetypes:
- environmentally robust single-track strategy (archetype 1)
This strategy could be regarded as the ideal form of scenario-based strategic management. It makes it possible to deal with numerous, or even all, imaginable environmental developments by means of a clearly demarcated strategy.
- focused single-track strategy (archetype 2)
This approach results in a clearly demarcated strategy, which, however, is only tailored to one external scenario. This approach makes best use of available resources and strengths and offers high potentials for success. Such a strategy, however, runs counter to the principle of retaining flexibility, and the prospects of success are bought at the risk of future developments going into a direction the strategy has not been tailored to.
- environmentally robust multitrack strategy (archetype 3)
If the environmental developments’ uncertainties are so strong that an individual development cannot be decided upon (neither internally nor externally), a softening of the respective strategy may have to be accepted. With such a strategy, flexibility can be strongly increased. However, it undermines the principle of focussing resources and strengths.
- focused multitrack strategy (archetype 4)
This option is often employed, however it should be avoided. Such a strategy violates the principle of focussing resources, as well as the principle of maintaining strategic flexibility. There are, however, specific situations in which such a strategy is advantageous, e.g. prior to extensive restructuring.
In the final analysis, strategy development and the assessment of individual strategy alternatives take place at the interface between the principle of focussing resources and strengths, and the required strategic flexibility. If the one principle is strengthened, the other will be watered down, and vice versa. This statement holds true for all strategy development processes and is not restricted to the scenario-based process.
It has to be noted that focused strategies may make an optimised employment of resources possible, but strategic early warning is called for due to the high number of strategy-critical scenarios. This early warning process also ties up resources.
Establishing the necessary mix between strategic flexibility and the concentration of strengths and means is the biggest challenge in the development of new strategies. A very good means to this end is the assessment of strategy options (or scenarios) against the backdrop of external scenarios.
Combining strategy options (or scenarios) with external scenarios and deriving a strategic approach
At the end of the strategic management process the organisations cannot apply multiple strategies but have to decide upon one strategic approach. Subsequent to the development of external scenarios and strategy options (or scenarios), the unclear issues are examined in two directions, separately from each other. Both perspectives of the future are then combined. To this end, the suitability of the individual strategy options (or scenarios) within the framework of the individual external scenarios is assessed and entered in a so-called future matrix (strategy options-external scenarios-matrix). This matrix makes it possible to analyse and answer two questions:
1. How robust is a strategy option? Individual lines clearly set out how robust a complex course of action is vis-à-vis complex environmental developments.
2. Which strategy options are suitable for a specific external scenario? Individual columns explicitly lay out which alternative course of action is suitable in a specific situation. This second point of view serves the development of scenario-specific eventuality strategies.
In this example, an environmentally robust, multitrack strategy is decided upon. Two strategy options (a combination of strategy option A and B) were chosen, as well as strategy option C to hedge against external scenario 4. It must be pointed out, however, that this matrix is never the sole basis for a decision. The starting point, as well as the two future axes, have to be evaluated:
- On the part of the environment, the organisation’s expectations are an important parameter in decision making. An external scenario deemed highly likely will therefore have greater relevance in determining the strategy.
- On the part of the organisation numerous factors play a role. Primarily, the question in how far a strategy option contributes to meeting the target, as well the use of resources connected with a certain scenario.
Formulating the strategy (step 5)
Once an organisation’s future strategic orientation has been decided upon, the next step is strategy formulation. The same principles apply here as in the generic model of strategic management.
Implementing the strategy (step 6)
Also here, the same principles apply as in the generic model of strategic management, yet scenarios can be employed especially in examining premises. The developed scenarios are observed and, if need be, developed further (scenario monitoring).
The decisive questions in connection with scenarios are:
- How do certain scenarios develop? In this, the key factors and projections of the future underlying the scenarios are observed, and the scenarios are extrapolated.
- Are the strategy premises still valid? Here the focus is on continuously observing the premises underlying a strategy.
Thinking in scenarios in security-political reality
In the previous chapters it was shown in a more or less theoretical manner what scenarios are, how they are created, and how they can be profitably applied in the strategic management process. In this chapter, two applications from the field of longer-term armed forces development are discussed, which more or less follow the model described in this text.
Defence policy principles concerning the capability-oriented planning process
Based on the deliberations presented in this text, the Bureau for Security Policy of the Federal Ministry of Defence and Sports (MoDS) drafted the defence policy principles of the capability-oriented planning process and revised the sub-strategy defence policy, thereby creating the basis for the future development of the Austrian Armed Forces (AAF). This project was carried out in accordance with the process of scenario-based strategy development outlined earlier.
Thinking in options was not limited, however, to the environments, but, with a view to future courses of action, various options, the so-called strategy options, were included in the analysis. This means that such a scenario-based analysis and planning relies, as previously stated, on various possible visions of the future, both of the relevant environments, as well as the organisation’s development possibilities.
This process, however, not only served long-term armed forces planning, but this project was also designed to trigger a process of strategic analysis of the future, to support the long-term design of security and defence policy, as well as of decision making processes. Furthermore, the basis for a dialogue, open to future developments, between the armed forces, politics, society and security-political elites was to be created.
Summing up, the process of scenario-based strategy development contained:
- an analysis of the future international environment, with a focus on its changes, both security and armed forces-related (external scenarios);
- an analysis of the Austrian security and defence policy’s courses of action (and thereby of the possible developments of the AAF);
- an assessment of our courses of action against the background of possible environmental developments;
- the development of a strategic direction as a basis of vision determination which is robust vis-à-vis the future.
To this end, workshops were organised and a high-level working group established, consisting of representatives of numerous AAF departments. For the workshops on external scenario creation, this core group was augmented by a number of external experts from the fields of (security) policy, industry, etc.
Within the project framework two different procedures as regards scenario creation were applied. The external scenarios were created with the scenario technique procedure, and the strategy options (steering scenarios - referred to in this project as profiles) with a morphological analysis.
The development of the external scenarios
The design field is central to the strategic planning process. In the present case, the design field is the future orientation of Austrian defence policy, and, derived from this, the future development of the Austrian Armed Forces. The external scenarios were developed so as to be able, when shaping Austrian defence policy, to take into account future environmental conditions and therefore opportunities and risks in an adequate and differentiated manner. The external scenarios, therefore, were not to describe the possible design field developments, but the possible future variants of the central area of consideration, which is of great relevance for the development of Austrian defence policy.
For the future orientation of Austrian defence policy, the relevant environment (and therefore the scenario field) comprises the system levels
- possible developments in Austria (especially the possible security-political developments);
- possible developments of the EU; and
- possible global-strategic and geopolitical developments (with, in turn, significant influence on the developments of the EU and Austria).
During scenario field analysis, the environment’s complex system was systematically covered and analysed. In this, identifying this underlying pattern is the decisive step towards knowledge, in order to produce a measure of the whole. Scenario field data analysis comprised areas of influence formation, factors of influence determination, and key factor selection.
In total, 79 factors of influence were identified and described in the scenarios illustrated here. Examples of these factors of influence are:
- economic and income development in Austria;
- labour market in Austria;
- threat perception/defence willingness in Austria;
- level of international operations ambition in Austria;
- political EU integration,
- institutional and political model of the EU;
- global political developments etc.
Not all the identified factors of influence have the same scenario field relevance, and a model with too high a number of factors would be difficult (if not impossible) to handle. This is why the essential system nodes (key factors) were now determined. As a point of reference, for most scenario projects 16 to 20 key factors have shown themselves to be advantageous. A convenient method of identifying the system nodes is interconnectedness analysis. In this, the totality of interdependencies with the other influencing factors and their respective interdependencies are illustrated. This analyses the cybernetic role played in the total system by an individual influencing factor. The interconnectedness analysis would go beyond the scope of this paper and therefore cannot be illustrated here. As part of this project, 19 key factors were selected.
Subsequently, these key factors’ projections of the future were determined, which means that potential alternatives or conditions were developed for every key factor. Developing projections of the future is a creative rather than a systematic process. Specifying the projections of the future was carried out, as part of the present scenarios, via two or more dimensions. The dimensions are characteristics by means of which a key factor’s relevant developmental possibilities can be described in as wide-ranging a manner as possible. Every key factor is visualized in a portfolio, in order to illustrate both comprehensibly and clearly the various projections of the future.
At the end of the process there were three to six manifestations for every key factor. These projections of the future were, by means of model-based logic, inductively linked to form scenarios. In doing so, every projection pair was intuitively allocated a consistency value. For this paired evaluation the question was asked: how does projection of future A (line) correlate with projection of future B (column)? The individual paired consistency observations were combined in a consistency matrix. Subsequently, the software algorithm determined and calculated all possible combinations of the projections of the future.
This model-based scenario formation process basically produced eleven scenarios, which, on the one hand, boasted a high level of consistency, and, on the other hand, described ample alternative futures of the relevant environments. Intensive discussions in the working group reduced this number to eight scenarios, with similar scenarios being combined and those which offered no additional benefit for use in the whole process eliminated.
- Scenario 1: Diffuse threats in a volatile environment
In a confrontational world which has lost its predictable structures, some European states (Core Europe) are meeting the new security threats through intensified cooperation and integration in all policy areas, especially that of security policy. With regard to foreign and security policy, Austria is fully integrated in this Core Europe.
- Scenario 2: Europe as an actor in global rivalries
In a world characterised by a shrinking economy, rivalling power blocks, and the threat of war, the EU states aspire to military capabilities with a view to global operations. To this end, a group of states has come together in an exclusive Core Europe, with Austria (especially as regards foreign and security policy) fully integrated into this.
- Scenario 3: Renewed transatlantic partnership
Given the US’ undisputed pre-eminence in a conflict-ridden world, and a rather strained global economic situation, a number of EU states are merging to create an exclusive Core Europe, which, in security-political matters, heavily relies on the US and NATO. Despite a fraught financial situation and the need to economise, Austria is fully integrated in this Core Europe and maintains modern and effective armed forces.
- Scenario 4: The EU as a regional power
In a fragmented international system, made up of several ideologically hostile blocs which also are economic competitors, the EU is becoming one of the global power centres. EU integration is pursued through individual steps. As a part of this changing geography, Austria participates in the enhanced security political and defence policy initiative with effective armed forces.
- Scenario 5: Autonomous EU defence in an unstable environment
Given NATO’s marginal importance, the European states have to take security provisions into their own hands, despite the difficult economic situation. EU integration is pursued through a series of steps. Austria participates in security political and defence policy integration only with limited resources.
- Scenario 6: Europe as a civil power in a cooperative world
In close cooperation with Russia, Europe, as a civil power, contributes to a global order of effective multilateralism. European integration is pursued through individual approaches as part of a mutable geometry. Austria only contributes a minimum to such a deepened security political and defence policy cooperation.
- Scenario 7: Effective multilateralism
In a globalised, collaborative world, with effective cooperation between states, Europe bears a significant share of the responsibility to lead. Austria’s role remains undefined, with two avenues possible: Austria either shows solidarity and participates in this multilateral security-political cooperation, or backs out.
- Scenario 8: Renaissance of the nation state
A debt-ridden Europe, bedevilled by the collapse of the EU, becomes a trouble spot in a world characterised by the peaceful coexistence of self-sufficient nations. Defence policy is completely nationalised, and - despite its bad economic situation - also Austria has to increase its efforts in this field drastically.
The profile versions (strategy options)
In a first workshop tasked with creating the strategy options, the working group identified, on the basis of the draft security strategy (including its recommendations), 18 main tasks concerning defence policy, such as territorial defence, disaster relief, stabilisation operations, etc. These tasks make up the strategy elements.
In the next step, four to five possible developments – the so-called options of the future – were drafted for every strategy element. These options describe alternative possibilities of how the allocated tasks could be fulfilled.
In a second workshop, the 74 options identified in this step were combined to create ten different strategy options (referred to as profile versions in this project) pertaining to defence policy, with different emphases each (strategy core).
This resulted in the following profile versions with different strategic root ideas and strategy cores:
- Profile version A: territorial defence and protection
- Profile version B: from crisis management to common defence within the framework of the EU
- Profile version C: international operations for humanitarian reasons
- Profile version D: new domestic task spectrum, with a concomitant reduction of conventional military defence
- Profile version E: dual focus on military and non-military threats to Austria
- Profile version F1: flexible and adaptable
- Profile version F2: increased national and international cooperation
- Profile version G: dual focus on humanitarian operations and innovative security cooperation
- Profile version H: robust stabilising profile
- Profile version J: loss of relevance
The profile versions developed were subsequently assessed against the background of the external scenarios (using a matrix of the future). However, in this project, the assessment was not carried out directly, but by means of a detour via a relatively complex three-step process, which screened the profile versions as to whether they met security-political target criteria and implementation criteria.
Based on the results of this three-step assessment procedure carried out against the background of the possible environmental developments, profile versions C, D and F2 were presented to the AAF’s civilian and military command, which finally opted for profile version F2.
This was the first time such a strategic management process model was applied in the MoDS. In the final analysis, it must be stated that this is a prototypical process which still offers potential for improvement. As stated previously, this process not only serves the AAF’s strategy development (and therefore long-term armed forces planning), but through this project a strategic management process was to be created, based on scientific and systematic methods of analysing the future. From the author's point of view, both goals were achieved. Despite severe time constraints, it was possible to achieve results which offer a good basis for the AAF’s long-term development, and the strategy development procedure described here appears suited to form the basis of the future strategic management process. In any case, this made it possible to create a stringent link between the military-political and military-strategic planning levels.
It does, however, seem necessary to point out that this strategy management process does not end once the decision in favour of a certain strategy option (here profile version) has been taken, but that strategy control should follow (see also strategy implementation).
Systematic scenario monitoring should be carried out in a systematic and institutionalised strategic early warning process. In this context, the following questions arise:
- What is the development of the scenario indicators and levers?
- In the direction of which scenario is the environment developing?
- How are possible wild cards developing? (see strategy implementation)
The Future Policy Survey of the Armed Forces of the Netherlands
In 2009/10 also the Netherlands Armed Forces carried out a comprehensive strategy development process in order to create a basis for long-term armed forces development, so that the Armed Forces of the Netherlands are in a position to meet future challenges to the best of their abilities. This was an inter-ministerial project, with the Netherland Ministry of Defence being responsible for project management. This strategy development process was based on external scenarios and alternative possibilities of development relating to the Netherlands Armed Forces. The project comprised the following steps:
- executing a comprehensive trend analysis, integrating core trend developments which will influence the Netherlands’ security and defence policy (globalisation, economy, demography, climate change, etc.)
- creating external scenarios
- analysing and identifying courses of action open to the Netherlands’ security and defence policy (policy options)
- assessing courses of action against the backdrop of potential environmental developments
The external scenarios
Scenario planning was used to create the external scenarios. The key uncertainties dominant actors (state or non-state actors) and characteristics of the international system (cooperative or non-cooperative) were defined, and four scenarios were derived by means of the scenario logic described earlier:
The multipolar and multilateral scenarios described environments in which the states are still the central actors within the international system, even if non-state actors have gained in importance. These two scenarios, however, describe a power shift to Asia, with the West having lost power. In the multilateral scenario there is a fully developed system of effective multilateralism and supportive cooperation in most areas of international policy. In the multipolar scenario regional power blocks, pitted against each other, have formed.
The network and fragmentation scenarios describe environments in which states have mostly lost their monopoly of power to non-state actors, although the states as such remain. Unimpeded globalisation has taken its course in the network scenario, with most sections of the global population a part of this. In the fragmentation scenario, globalisation was slowed down.
The policy options also describe alternative developmental possibilities of the Netherland defence policy and therefore of the Netherland Armed Forces. These, however, were not developed by employing the procedures for scenario creation described here, but by using a very simple and creative method.
The various policy options are based on seven so-called strategic tasks:
- deterrence (in the sense of conventional national defence);
Subsequently, ten different policy options were formed, by combining these strategic tasks in different ways and with different emphases.
Against the backdrop of the external scenarios, these ten policy options were then analysed in how far they allow for environmentally robust strategy development. Following this evaluation process, four policy options remained, which were presented to the political leadership:
- staying secure (focus on national protection tasks),
- brief and robust (focus on interventions),
- bringing security (focus on stabilisation operations),
- versatility (multifunctional option).
The political leadership of the Netherlands finally chose option four: versatility.
The future, as reiterated in this paper, is a dimension which cannot be predicted by man. Following Hugues de Jouvenal’s demand vis-à-vis futurology - that it should support us in the design of the future - it became clear in the course of this paper that more precision is required. The design of the future environment (the external future – e.g. the international system or global markets) will not always be possible, or only with great difficulty. One’s own position in the future system of environments (or rather: in the possible future systems of environments), however, can be proactively designed. This proactive design of one’s own position and behaviour within the system, however, requires information about the future.
Three core competences have emerged in order to ‘successfully' deal with the future:
- dealing with a lack of knowledge
The future is uncertain. The farther one peers into the future, the more uncertain the prospect.
- dealing with complexity
Future developments are the multicausal results of interdependencies and relations between system components within a system and its environment.
- dealing with the dynamics of change
A system’s complexity very often depends on the dynamics of change. This is a non-controllable quantity and requires openness and flexibility. In this, early recognition is just as important as the ability timely to adapt entrenched thinking and actions.
It must also be noted that the thinking in scenarios concept is only one of many methods in the methodical toolbox required for the strategic analysis of the future. In the context of knowledge, however, the thinking in scenarios concept is a chief instrument in order to:
- systematise strategy determination
There is a multitude of instruments available for strategic analysis. In contrast, determining and formulating scenarios is often done intuitively and by relying on implied visions of the future. Scenarios make it possible to make this step more systematic, more descriptive, more easily comprehensible;
- take decisions robust enough to stand up to future challenges
Developing scenarios can reduce environmental ambiguity. Organisations can develop scenarios which look promising for various possible developments of the future;
- generate knowledge that can serve as a guiding light
Scenarios are important instruments in order to develop knowledge providing orientation, which can be employed flexibly, and by means of which a longer-term view of the future is possible.
- create a forum for strategic dialogue
Scenarios are instruments which permit and document open and creative dialogues about a company’s perspectives and strategies. They also enable management/command personnel to disengage themselves from day-to-day operations and to broaden their perspectives;
- interlink knowledge of the future
Very often there is a considerable amount of knowledge available concerning an organisation's potential future. Scenario processes help to collate this knowledge, to find a common language and thereby create a communication platform which transcends the result in question.
Scenarios, however, cannot predict the future or describe ‘the one true future’. They are cognitive models by means of which we can approach future challenges and opportunities. None of the scenarios developed in a scenario project will become reality exactly as described, which, however, is no criterion for their usefulness. Scenarios are ‘good’ if they stimulate the right decisions. Furthermore, scenarios are no objective depictions of the future. They are always visions of the future which are group-subjective; which means they reflect the views of the scenario developers. Scenarios also do not represent strategies or decisions, but are tools to support decisions and to develop sustainable strategies.
One obstacle to the development or introduction of scenario-based strategy development processes is that they are highly time, personnel and cost intensive. As a rule, it is necessary for the decision takers to be integrated into the entire strategy process, as there might otherwise be a danger of results not being accepted. Most of the time, there is a need for external support provided by strategy consultants specialised in scenario processes. In the public sector (especially the security sector), which is struggling with financial straits, this, of course, is a hurdle that should not be underestimated.
The following might seem banal, but it is the psychological barrier which in daily practice is a major (if not the decisive) obstacle to the systematic introduction of scenarios as a basis for security-political analysis and the strategic planning based on it. Most corporate and organisational cultures are geared towards quantitative prognoses or implicitly present/assumed conceptions of the future. The decision takers very often regard the predominantly qualitative information provided by scenarios as nothing more than a dreamy vision (or ‘invented stories about the future’) which, due to a lack of precision, cannot be used for concrete strategic planning. When working on the basis of alternatively potential visions of the future, the decision takers must view the future and the decision making process as a choice of alternatives. This thinking in alternatives is, however, very often new and unfamiliar. Thinking in alternatives and thereby dealing with ignorance also impacts on every decision taker’s fundamental competence, namely that s/he knows what is happening and that s/he therefore takes the right decision. Graf, on the other hand, concludes that thinking in scenarios forces one to admit to a certain measure of ‘incompetence’, of ignorance, and of not-being-in-a-position-to-know.
Also Schoemaker is of the opinion that “(t)he organizational and psychological bias against uncertainty is one of the most significant obstacles to profiting from it. (…) People want to operate in their comfort zone, whereas the real opportunities lie outside of it.”
This is why the Thinking in Scenarios concept requires a significant change in an organisation’s corporate culture and thereby also impacts upon normative management, a part of which is corporate culture. Corporate culture must develop in such a manner that open-ended thinking, thinking in alternatives and options becomes a matter of course before a decision is taken. At the same time, creative and open thinking about the future (external and internal) must be permitted and fostered.
In the last few years, the Thinking in Scenarios concept has become the central methodological instrument to analyse long-term security-political developments, and if not to predict, but at least to project suitable foundations for the design of security-political instruments. It must be reiterated at this point, however, that scenarios do not attempt to predict the future. This was stressed by Schoemaker in his book Profiting from Uncertainty: “This leads us to a very important use of scenarios - exploring the future in order to develop a new set of instincts. The purpose of developing scenarios is not to pinpoint the future, but rather to experience it.”
Here, Schoemaker advocates regarding Thinking in Scenarios not chiefly as an innovative planning instrument. He is of the opinion that working with and thinking in scenarios should, above all, change decision takers’ instincts and mind-sets. It is the task of scenarios to challenge the mental models we all cling to.
 cf. Kiesel, 2001, p.74.
 A similar process model is designed by Schoemaker in Paul J. H. Schoemaker, Profiting from Uncertainty: Strategies for Succeeding No Matter What the Future Brings, The Free Press, New York, 2002, p.19ff.
 cf. Hans Georg Graf, In die Zukunft führen. Strategieentwicklung mit Szenarien, Rüegger Verlag, Chur, 2003, p.131.
 cf. Fink et al, 2002, p.121-181.
 cf. Fink et al, 2002, p.140-150 and Fink, Siebe, 2006, p.80-93.
 This is the notion used by Schoemaker. For more information cf. Schoemaker.
 cf. Fink, Siebe, 2006, p.86-89.
 see also Porter, 2000, p.593ff. and Ian Wilson, ‘The Effective Implementation of Scenario Planning. Changing the Corporate Culture’, in, Fahey, Liam, Randall, Robert M. (eds.), Learning from the future. Competitive foresight scenarios, Wiley, New York, 1998, p.362f. and Kiesel, p.71-89.
 cf. Porter, 2000, p.591ff.
 cf. Kiesel, 2001, p.77.
 see also Kiesel, 2001, p.87.
 cf. Fink, Siebe, 2006, p.72f.
 cf. Kiesel, 2001, p.85 and Porter, 2000, p.595.
 cf. Fink et al., 2002, p.154-156.
 cf. Kiesel, 2001, p.78.
 Wild cards are events which may be relatively unrealistic, but which have a high creative power in the system and thus merit observation.
 cf. Fink et al, 2002, p.200.
 cf. Bernhard Richter, ’Umfeldszenarien als Grundlage verteidigungspolitischer Strategieentwicklung’, in, Johann Pucher, Johann Frank (eds.), Strategie und Sicherheit 2012: Der Gestaltungsspielraum der österreichischen Sicherheitspolitik, Böhlau Verlag, Wien-Köln-Weimar, 2012, p.707ff.
 These 79 factors cannot be illustrated here in their totality, as this would go far beyond the scope of this text.
 For more information see Richter, 2010, p.46-54.
 The various software tools employ different scales to assess the (in)consistency of the projection pairs. So as to reduce complexity they will not be illustrated in this text. For more information, see Richter, 2010, p.59-61.
 This text presents a synopsis of the individual scenarios. In a complete version of the scenarios, every key factor’s projection of the future is described elaborately.
 For reasons of complexity, there will be no illustration of the profile versions. Every profile version is elaborately described on numerous A4 pages.
 This text uses a condensed version of the scenarios. Each of the four scenarios is elaborately described in the Future Policy Survey (approx. 4-5 A4 pages per scenario).
 cf. Klein et al., 2006, p.354f.
 cf. Alexander Fink, Szenariomanagement. Intensiv Workshop, event on 14 May 2009, Paderborn. Organised by Scenario Management International AG.; see also Karlheinz Steinmüller (ed.), Grundlagen und Methoden der Zukunftsforschung. Szenarien, Delphi, 1997, Technikvorausschau. Sekretariat für Zukunftsforschung. Available online: http://www.institutfutur.de/_service/download/methoden-zukunftsforschung_sfz-wb21.pdf, last verified 29 January 2008, p.50f.
 cf. Bernhard Richter, Langfristige globale strategische Entwicklungen und ihre Auswirkung auf die sicherheitspolitische Ausrichtung der EU und ihr Einfluss auf die Streitkräfte, Thesis, GRIN-Verlag, München, 2008, p.116.
 cf. Fink, 14 May 2009.
 Schoemaker, 2002, p.175.
 cf. Hungenberg, 2008, p.24.
 cf. Graf, 2003, p.55f.
 Schoemaker, 2002, p.15.
 cf. Schoemaker, 2002, p.15 and p.20.