N-factorial scenarios : A systems-theoretical approach to scenario-planning

Abstract

<p>Scenarios are among the most popular techniques for managing the uncertainty and complexity of the future. Even the more sophisticated scenario designs, however, often reduce the future to a narrow set of typically only two key factors that are arranged into a four-square matrix representing four distinct yet interrelated scenarios. Consequently, scenarios have been criticised for being simplistic or reductionist by design. In this article, we address these criticisms by proposing a basic design for n-factorial scenarios. Following a short discussion of the procedures and limitations of classical scenario design, we draw on the example of a standard 2 × 2 matrix titled ‘Four Scenarios for the Digital Transformation’ to illustrate the limitations of the standard approach and demonstrate the potential of a digital approach to scenario building. We conclude that standard scenario planning is often characterised by a systematic omission of potentially critical scenarios, which our proposed digital approach can detect and map out.<br></p>