Our Scenario Approach
The HHL-Roland Berger approach to scenario-based strategic planning scenario development process comprises six consecutive steps. Based on our experience in teaching strategic management and advising corporate clients around the world, we have developed innovative scenario tools that support each of these steps. For more details, scroll over the information below.
The six-step scenario-based approach to strategic planning in detail
Step 1: Definition of scope
In Step 1 we define the overall scope of the project. Fur this, we use the framing checklist as a framework. It specifies the goal, strategic level of analysis, participants, time horizon and stakeholders to be included in the analysis. Defining the project goal is particularly important, as it sets the scope for the entire analysis. The most important aspect of the framing checklist is defining the relevant internal and external stakeholders, which should be as broad as possible.
Step 2: Perception analysis
The goal of the Perception Analysis is to examine the perspectives of internal and external stakeholders on future developments in the industry. The assumptions and mental models of internal stakeholders, particularly the top management team, are challenged by confronting them with the views of external stakeholders. Step 2 results in a comprehensive list of factors potentially influencing the future of the industry. These factors are then evaluated in terms of their potential impact on the company's performance and their degree of uncertainty. The views of the different stakeholder groups are compared. This allows the company to identify blind spots (areas consciously or unconsciously ignored) and weak signals (initial indicators of future changes in the environment). Our framework for Step 2 is the 360° stakeholder feedback. At its core lies a two-step survey process that analyzes the perceptions of the internal and external stakeholders identified in the framing checklist. The tool results in a list of key factors influencing the industry. With this list, the company can easily identify possible changes in the macro environment as well as any blind spots or weak signals.
Step 3: Trend and uncertainty analysis
The general aim of the trend and Uncertainty Analysis is to discuss and evaluate relevant trends and critical uncertainties.
The Impact/Uncertainty Grid is a matrix with two dimensions: Uncertainty on the x-axis and potential impact (for future performance) on the y-axis. The goal is to cluster the relevant factors that we identified during the Perception Analysis into secondary elements, trends, and especially critical uncertainties. Critical uncertainties have a high impact on a firm's future success and are highly uncertain.
Step 4: Scenario building
At the heart of the Scenario Building step is the scenario matrix. The scenario matrix is based on two key uncertainties that have been derived from all uncertainties identified in step three. The two key uncertainties serve as scenario dimensions. They are hence the basis for building as well as describing the four scenarios. Each scenario should be given a concise and easily memorable name.
Step 5: Strategy definition
The overall goal of the strategy definition step and its Strategy Manual tool is to generate and develop a core strategy as well as strategic options for the firm. The Strategy Manual tool facilitates strategy development and identifies precise strategic measures to be implemented. At the core of the Strategy Manual is the development of scenario-based portfolios.
Step 6: Monitoring
The overall goal of the monitoring step and its Scenario Cockpit tool is to identify which previously developed strategic options should be implemented and at what point in time this implementation should take place.