2020-James Derbyshire

The effect of scenario planning on individuals' perceptions of uncertain futures

Principal Investigator: Dr James Derbyshire (PI), Middlesex University

Co-Investigators: Prof Dilak Önkal (Brunel University), Prof Mandeep Dhami, Middlesex University

Project summary: Scenario planning is a management tool designed to broaden the perspective of decision-makers, ensuring they take account of highly uncertain but potentially highly impactful futures, for example those resulting from the current Coronavirus pandemic or Brexit. Yet, despite its long lineage, many questions remain about how it should best be implemented as well as its effectiveness and, as a result, new but inadequately evaluated approaches have proliferated in recent years.

In this project we conducted randomised controlled trials that examine the effect of scenario planning on individuals’ perception of uncertain futures and the underlying mechanisms by which it might change this perception. We tested for a conjunction fallacy effect in scenario planning, which previous research suggested to be the mechanism by which it stretches individuals’ perception of uncertainty. We found no evidence for such a mechanism and instead postulate that any increased perception of uncertainty stimulated by scenario planning is more likely to come from it providing a structured, group-based process for eliciting and discussing uncomfortable and inconvenient strategic issues. We also tested for the effect of using different words (‘plausible’, ‘probable’ and ‘surprising’) to elicit and attribute extreme values to variables associated with the higher-level drivers of change identified in the early stages of the scenario process, which go on to frame the scenario writing. The literature presently recommends asking participants to attribute ‘plausible’ extreme values because asking for ‘probable’ values embeds thinking in what has happened in the past. However, we found that using ‘plausible’ may cause individuals to draw on the past as a guide to potential extremity in the same way that probability does. Using the word ‘surprising’ stretches participants’ thinking more. This finding holds across different levels of complexity. We therefore suggest the word ‘surprising’ be used to attribute extreme values to the outcome of drivers of change within the scenario process.

Published papers:

'Increasing Preparedness for Extreme Events using Plausibility-Based Scenario Planning: Lessons from COVID-19' Derbyshire, J. in Risk Analyis available here

'Borrowing from Keynes' A Treatise on Probability: A non-probabilistic measure of uncertainty for scenario planning' Derbyshire, J., Feduzi, A. and Runde, J. in European Management Review available here

'The value of experiments in futures and foresight science as illustrated by the case of scenario planning' Derybshire, J., Dhami, M., Belton, I. and Önkal, D. in Futures & Foresight Science available here