Tuesday, December 9, 2014

Prospective Scenarios: How to Build a Better Future

By Adrian Alvarez
Founding Partner
Midas Consulting

Coutinho Marcial and Raul José dos Santos Grumbach are considered “the” scenario experts in Brazil, and their book, Cenários Prospectivos, Como construir um futuro melhor (Prospective Scenarios, How to Build a Better Future) is a classic in Portuguese for this theme as it moves into its fourth edition. This is a very recommendable book, as it successfully merges theory, practice, and advice in areas and issues that deserve particular attention. It also suggests ways to overcome the most common problems encountered when you are developing scenarios.

Marcial and Grumbach cover four frameworks (Godet’s, Porter’s, Schwartz’s, and Grumbach’s) very thoroughly. They also cite the viewpoints of other leading scenario authorities such as Pierre Wack and Liam Fahey, thus demonstrating several points of view on the same subject. This approach allows the reader to receive a clear and balanced overview of scenarios.

The Latin American Scenario Paradox

As the authors state, it is particularly paradoxical that scenarios are not widely used in Brazil (and I would add in Latin America in general), despite the fact that its volatile environment is ideal for using scenarios. The reason that potential users give for not using scenarios (as mentioned by the authors and consistent with my own experience) is that the environment is so volatile that no one technique can predict where it is going.

I believe that this assertion is wrong. This book has the potential to close the gap between this perception and reality. A chapter devoted to actual cases of successful scenario analysis makes it clear that the “too-volatile environment” explanation is simply not true.

Methodologies, Key Steps, and Core Processes

Marcial and Grumbach do an excellent job of summarizing three scenario schools of thought—those of Godet, Porter, and Schwartz. They do so in terms of methodology, key steps, and core processes where problems could arise, and they offer suggestions on how to overcome these problems. Additionally, the authors extensively portray Grumbach’s model over two chapters, one which explains how the model works and another one on how it could be applied.

In my opinion, the book could be improved by adding a chart that summarized and compared the scenario frameworks mentioned in the book and included the situations where each model fits best, as well as each framework’s strengths and weaknesses. This summary could help the book’s readers (especially novices) decide which model to use according to the situations they face.

For example, Grumbach’s model would not be apt for a situation where the Delphi method cannot be applied, because the results of a Delphi analysis are one of its inputs. Porter’s model would be more suitable for a scenario where competitive response plays a key role, as it is the only one of the four methods that specifically addresses competitive response. It must be noted that for most situations, all frameworks should yield similar results, as they all consider several scenarios as their output and have several common departure points and methodologies.

Practical Examples Facilitate Successful Future Implementation

I particularly liked the chapter that contained actual cases where scenarios were applied, such as in Shell, Banco do Brasil, CAMR (Brazilian Navy), and Secretary of Strategic Issues (SAE). This chapter outlined how each scenario was developed, the resources invested in it, the scenario’s key steps and methodology, and the lessons learned. In some cases the chapter includes suggestions on how readers can try to implement scenario development and analysis in their own organizations. The case studies and their lessons include:


  • Scenarios can successfully be used to develop local and global strategies.
  • Consulting with outside experts helps take bias out of scenarios.
  • Scenarios have to be relevant and short to ensure that they are read and used by decision makers.
  • Scenarios have to be shared throughout the company to facilitate learning and communication.
  • Scenarios can be shared with suppliers, distributors, and the government.

SAE (Secretary of Strategic Issues)

  • In the case of a country, not only exploratory scenarios but also desired scenarios have to be developed as a means to reach the desired scenario.
  • To establish a group to develop a set of scenarios and shortly afterwards dismantle it is fruitless, but unfortunately common in Latin America, especially in politics.

CAMR (Brazilian Navy)

  • Scenarios can be successfully used to assess and define capital expenditures.
  • Scenarios serve not only to understand the future, but also to improve environmental scanning.
  • Top management’s buy-in is extremely important, as it ensures the deployment of resources and the use of the developed scenarios in decision making.
  • The team’s training and expertise is key, as it determines the quality of the process.

Banco do Brasil

  • Sharing scenarios with other audiences can shed light on issues not previously taken into account.
  • Working with scenarios improves organizational learning as an event’s cause and effect are clear even before the event occurs. The development of contingency planning, as employees begin to think in terms of “if this happens, then...,” due to the use of scenarios.
  • Using easy names to label the scenarios facilitates communication, comprehension, and memory.

The lessons learned from the outlined cases are applicable to any type of organization working with scenarios. Personally, I do not agree with Shell’s point of view of sharing the scenarios with other key stakeholders, because the company runs the risk that its competitors can obtain this information. I recognize, however, that this is the way Shell works throughout the world. An exception is the Banco do Brasil example, as its scenarios were related to the Y2K bug. This information would yield no advantage to competitors, and Banco do Brasil benefited from sharing its point of view with other key stakeholders, as the company discovered issues it had not previously considered.

For the book’s fifth edition, I would also recommend that the authors include a chart comparing the approaches used in each of the cases (for example, steps used, number of scenarios generated, sources considered as more reliable), their weaknesses and strengths, and the lessons learned from them. Also helpful would be a summary identifying which scenario approach case study most resembles another. In my opinion, Shell’s approach resembles Schwartz, CAMR is similar to Grumbach, and SAE looks like Godet, while there is not enough information on Banco do Brasil.

Another suggestion would be to include more cases, for example one of a company using Porter’s approach or cases where the authors were related, such as Abraic or Brazshipping. I recommend such a chart and the addition of more cases because I generally find that many persons who want to practice competitive intelligence specifically look for cases where they can actually see how a certain technique works, and I believe this would facilitate learning.

A must-read for Portuguese and Spanish speakers

Summing up, this book can be very useful for anyone seriously wishing to understand scenario development. The book is overall a very easy read. It provides a high level of detail in a very short space, as the book is only 140 pages long. If you are Spanish speaker you will be able to understand the book, and I recommend that you read it if you have any interest in scenarios and how they can help your competitive intelligence.

This article originally appeared in Competitive Intelligence Magazine, Vol. 10, No. 3, May-June 2007.

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