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Scenario-Based Workforce Planning
Executive Summary
There are a variety of tools and approaches available for organizations to use in planning and developing
their workforce. Scenario-based workforce planning is one of those methods. As an executive or
manager involved in strategic planning or as a human resources (HR) professional, using scenario-based
workforce planning can improve the organizations effectiveness.
This guide provides some recommended steps to help with your agency’s workforce planning process. It
is organized into the following sections: (1) background and uses for scenario-based workforce planning
and (2) how to apply scenario-based workforce planning. A list of additional information about scenario-
based workforce planning is also included.
What is scenario-based workforce planning?
Scenario planning is a method used during the strategic
planning process.
Scenarios are developed in the form of stories with characters
and plots to illustrate possible futures in a compelling manner.
They encourage decision makers to imagine possible future
events in the environment.
Why use scenarios in workforce planning?
The purpose of scenario-based planning is to help develop information to plan for unforeseen and
foreseeable events. Helps leadership make informed decisions about how to best (strategically and
methodically) allocate resources, train staff, etc. in preparation for what lies ahead. Scenarios assist
leaders with planning for the future by developing options
for what may lay ahead.
Many organizations create and use scenarios to encourage
more flexible, diverse thinking about their futures and create
awareness and readiness. Organizations use scenarios to help
organizational members:
• Envision possible and plausible future conditions
• Shift their thinking about the external environment
• Consider how future conditions will affect
their organization
Scenarios are stories about the future
that help people break through mental
blocks and assumptions.
Ringland, 1998, p. ix
The Mont Fleur Scenarios
Planners used the scenario
methodology to explore possibilities
for transforming South Africa at the
end of apartheid. In 1991, a group met
at the Mont Fleur Conference Center
in South Africa to create scenarios
about what the country could look like
in 2002. The group compiled 30
possible stories about the next decade
and reduced these to 4 that were
plausible and internally consistent.
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1. Project
Preparation
2. Scenario
Exploration
3. Scenario
Development
4. Scenario
Application
5. Project
Evaluation
• Think of alternative responses
• Imagine the consequences of actions and decisions
• Develop long-range plans and contingency plans
• Assess ramifications for workforce and competency requirements
• Develop skills gap closing strategies
• Develop anticipated budgeting requirements
Organizations can test the viability of workforce plans against scenarios to identify weaknesses in their
plans. They can compare workforce requirements for different scenarios to find similarities and
dissimilarities in workforce needs and develop a reasonable range of plans
Qualitative planning techniques, such as scenario planning, can help organizations go beyond merely
extending trends based on past quantitative data.
How do you develop and use scenarios for workforce planning?
In the following, we focus on five key steps to scenario-based workforce planning.
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Step 1.
Project Preparation
• Identify the purpose of the scenario project. If you do not already know, start by finding out why
the originator or sponsor for the project wants to use scenario planning.
This phase may include interviews, meetings, or a workshop with project sponsors and other
stakeholders and a review of reports and documents. Key questions include:
• What has motivated interest in using scenario planning?
• What is the key issue or question that is the project’s focus?
• What decisions have to be faced?
• What are the biggest uncertainties?
• What are the expected outcomes for the scenario project?
• What do sponsors and stakeholders expect to get out of it?
Scenarios need to have a central purpose or question, or they will lack focus and internal
consistency. The focal question puts scenarios into context (Chermack, 2011; Ringland, 1998).
Researchers report that a “lack of purposefulness” is a major reason for scenario project failure.
Thus, establishing a clear purpose and focal decision or question to guide the project is an
important step for improving the likelihood the project will succeed (Chermack, 2011).
In the case of workforce planning, example focal questions may begin with something like,
“What size and type of workforce will we need in the future to fulfill our organizational
strategy?” or “What workforce plans will make us more flexible and agile in responding to a
range of likely alternative future scenarios?” The Australian Public Service (APS, 2011) frames a
question that may be a useful focal point: “What does your organization need from its
workforce—capacity and capability—to deliver its business outcomes now and into the future?”
• Build the scenario team. Scenario planning is a participative group process. Select a team that
represents the organization and lends credibility to the project and its results. The process of
interviewing stakeholders and selecting team members can help you build organizational
support for the project. Involve key decision makers directly and on an ongoing basis.
Participants should include people with a thorough knowledge of the agency and its issues
(Ogilvy and Schwartz, 2004). The team should include people who are unorthodox and
challenging thinkers from inside and outside the organization. The team should be diverse and
reflect differing:
• Levels, perspectives, and roles
• Cultures
• Intellectual disciplines and functions
• Programmatic functions
• Strategic and core/operational functions
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Some questions to consider when forming a team include:
• Who has the leadership and facilitation skills to lead the team?
• What individuals have the creativity and openness to envision and create alternative
future scenarios?
• What different parts or functions of the organization need to be included to develop
a broad and realistic understanding of how scenarios will affect the organization
and workforce?
• Who has the writing skills to complete scenarios?
• Who has the availability and motivation to commit to being part of the team?
• Develop a project plan. The plan should build agreement between the project leader and
organizational decision makers. The following checklist can help you develop a complete
project plan
Check if
Completed
Project Plan Element
Identify the purpose and focal question of the scenario project
Clarify the expected outcomes of the scenario project
Select and develop measures you will collect during the project to assess
achievement of the expected outcomes
Determine the estimated scope of the scenario project: How far into the
future do sponsors want the scenarios to project? (Agencies may want to
use political cycles to consider how far out to explore.)
Specify resources the organization is investing in the project
Identify team members and their roles on the team
Develop a timeline with specific deadlines
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Example 6-Month Project Timeline
Time Period
Step
Weeks 1-4
Round up relevant literature; conduct a series of interviews; book a site
for workshops; select the team; develop and finalize a project plan.
Week 5:
Workshop 1, Day 1
Articulate the focal issue (1 hour).
List key factors and environmental forces (3-4 hours).
Prioritize forces and settle on an official future (inductive approach) or
scenario matrix (deductive approach) (2-3 hours).
Week 5:
Workshop 1, Day 2
Discuss second thoughts about skeletal scenario logics (1 hour)
Elaborate one scenario with the entire team, from beginning to middle
and end (1-2 hours).
Break up into smaller groups that each elaborate one of the other
scenarios. Have experienced note takers record the ideas. (4-5 hours).
Weeks 6-10
(4 weeks)
Conduct interim research and reflection while writing scenarios. Research
qualitatively (through interviews) and quantitatively (through analyses
and forecasts) to develop credible scenarios.
Week 11:
Workshop 2 (1-2 days)
Bring the scenario team back together to present, critique, and revise
draft scenarios. Identify questions to be used for exploring the
implications of each scenario on the organization and its workforce.
Week 12:
Workshop 3 (2 days)
Explore implications of each individual scenario for the organization and
its workforce. Answer the question, “So what?” based on all of the
scenarios as a set. Record results of the discussions.
Week 13
Have team members review the notes on the results from the discussions
to ensure they correctly represent the results.
Weeks 14-16
Have assigned team members develop a draft report.
Weeks 18-19
Ask other team members to review the draft report.
Week 20
Have assigned team members revise the draft report.
Weeks 21-23
Have assigned team members develop a briefing.
Week 24-25
Have other team members review and revise the draft briefing
Week 26
Deliver the report and briefing to sponsors or to the next level for review.
(Based in part on Ogilvy & Schwartz, 2004, and Chermack, 2011.)
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Step 2.
Scenario Exploration
• Conduct workshops to develop scenario logic. Scenario exploration is about selecting scenario
logic. The aim is to identify a number of plausible future scenarios (combinations of possible
events) that will vary in their impact on workforce demand.
Typically, two-to-four full-day workshops are used to build scenarios. The number and length of
workshops needed varies based on the number of people involved, size of the organization, and
degree of complexity of the issues involved. A team with six-to-twelve members will provide
different points of view without become unwieldy or diffusing responsibility for tasks too much.
It is useful to have some time between workshops for reflection.
Allow the team to spend the first hour discussing the key decision that faces the organization
and questions to ask about it. Sometimes, team discussion leads to a change in the focal
decision or question. Throughout scenario exploration and creation, keep sight of the purpose
for the exercise and the focal question.
Experts provide different advice on the number of scenarios that a team needs to develop.
Chermack (2011) suggests at least two and no more than four scenarios, which is the range in
which most experts’ recommendations fall.
However, others (e.g., Ringland, 1998) report that:
• Two scenarios allow two very distinct situations to be developed—but they should not
just be a “high” and a “low” or a “bad” and a “good” version of the same basic scenario.
• Having three scenarios—low, medium and high—is not useful. People just end up
focusing on the middle as the “real” forecast
• Four scenarios encourage vision and divergent thinking
In contrast, Royal Dutch Shell’s Executive Vice President for Talent and Development (Mercer,
no date) said they develop multiple scenarios and look across their business to see what skills
they have, need, and are likely to need. Typical scenarios include the “base case” based on the
business plan, a “high case” based on the assumption that all known projects go ahead and
optimization projects happen sooner, and a “low case” that assumes business growth is
minimal. They model these 5-to-10 years into the future. For example, they look at what would
happen if they recruited at 10% a year or if there was no recruitment for the next 15 years.
• Select a deductive or inductive approach. You can approach scenario planning deductively or
inductively. The number of scenarios you choose to develop may depend on the approach you
take to scenario development. Deduction moves from the general to the specific. Induction is
moving from the specific to the general.
In scenario planning, the deductive approach starts with prioritizing a list of key factors and
driving forces to find the two most critical uncertainties.
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In contrast, the inductive approach has two variants (Chermack, 2011; Ogilvy & Schwartz, 2004):
• The group brainstorms “emblematic events” or plot elements and spins larger stories
around them, or
• The group identifies the “official future” and then looks for ways the future might
deviate from it.
With any of the approaches, the scenario team will spend time in a workshop brainstorming
issues the organization faces. This should be led by a person experienced at facilitating the
brainstorming process who is also objective (e.g., from outside the organization). The facilitator
should prevent participants from immediately disparaging ideas, write the ideas on flip charts,
and tape the charts to the walls to refer to later. The team should look for driving forces and key
trends that will drive the scenario plots. Members should group items that overlap and combine
duplicates (Ogilvy & Schwartz, 2004). In the following sections we describe each approach in
more detail.
Pros and Cons to Deductive and Inductive Scenario Planning Approaches
Cons
Deductive Approach
• More structured
• Helps cut through complexity
• Can contribute to community
building in the organization by
providing workshops involving
joint reflection
• May not be as well suited to
organizational cultures that
are used to creativity and
innovation
Inductive Approach
scenario planning
• More systematic if one uses
the “official future” variant
• Good when specific staff are
dedicated to strategy as their
core function
• Not as well suited for
inexperienced scenario users
because it is less structured
• Requires more group
discussion, patience, and
debate to reach a consensus
• Less systematic and requires
more imagination to use the
“emblematic events” variant
(Based in part on Chermack, 2011.)
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• Option 1: Use a deductive approach. The deductive approach typically features workshops,
ranking exercises, and a 2 × 2 matrix (Chermack, 2011). This approach helps cut through
complexity. Have the scenario team start by brainstorming a list of key factors, or driving forces,
for future workforce needs. The team should then proceed with ranking the factors according to
their impact on the organization and their uncertainty of occurring. For example, the team may
rank organizational restructuring as having higher impact than the implementation of a new
program because the restructuring will affect the whole organization, while the new program
will only affect a part of the organization. The team should develop scenario logics by selecting
factors that are high on both rankings. Scenario logics are the general frameworks or outlines of
the scenario plots.
One-half or full day can be spent on brainstorming major forces the organization is facing that
are related to the focal questions. Ringland (1998) recommends that teams identify two types
of forces:
• Internal forces – What is going on in the organization or local environment that could
influence the success or failure of the decision?
• External forces – What are the driving forces in the macro-environment that will
influence the organization or local environment?
Possible Drivers of Workforce Needs for Government Organizations
Internal Drivers
Plans
•
Strategic plans
• Business plans
• Budget forecasts/budget statements
• Planned new programs
• Planned new technology
• Planned agency or departmental restructuring
• Current and planned service arrangements
• Changes in management
Performance
• Organizational performance
• Customer feedback
• White papers or suggested reforms
External Drivers
Political
•
Change in administration
• Government directions, policy, and initiatives
• Future service demand
• Taxation
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Social
•
Demographic changes that alter community needs and expectations or the
profile of an organization’s workforce
• Lifestyle trends
• Consumer attitudes and opinions
• Educational changes
• Changes in values
• Nature of work
• Aging population/retirements
• Geographic population shifts and mobility
• Attitudes to work
• Income distribution
• Client-focused service delivery
• Pipeline data (e.g., educational attainment)
• Bureau of Labor Statistics workforce projections
• Realistic supply of skills
Economic
• Financial environment (national and global)
• Interest rates
• Unemployment
• Exports and imports
• Industry demand for products and services
Technological
• Improvements in technology for service delivery or business processes
• Technology legislation
• Access to technology
• Communication channels
Environmental
• Seasonal or weather issues
• Climate change and global warming
• Pollution control
• Use of natural resources
Legal
•
Emerging cases
• Legislation and regulations
• Health and safety
• Employment law
(Based in part on Australian Public Service (APS), 2011.)
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After identifying the forces or drivers of future workforce needs, have the team rate their likely
impact on the organization and their degree of uncertainty.
While ranking impact, team members can use sticky notes to order the forces horizontally on
a wall from lowest to highest. The sticky notes can be placed from lowest impact on the left
to highest impact on the right. Ranking may take one-half to a full day (Chermack, 2011).
The group should consider which forces are most likely to define or significantly change the
nature or direction of scenarios, and how important a force is to the organization (Ogilvy &
Schwartz, 2004).
When the team is done with both rankings, they can be combined in a matrix with impact on
the horizontal axis and uncertainty on the vertical axis. Forces in the top right quadrant that
have both high impact and high uncertainty can be used as the key factors for scenarios
(Chermack, 2011).
Another way to approach this task is to have the scenario-planning team select one internal and
one external factor, with two levels on each factor to create the 2 x 2 matrix. Have them create
four scenarios based on the four quadrants. The internal axis has a factor the organization can
control, and the external axis has a factor that the organization cannot control (Human Capital
Institute, 2010).
As an alternative to using sticky notes to rank order forces, give every participant 25 poker chips
to assign to the forces on the list. This can help narrow the focus to the two most critical. These
become the axes of the 2 x 2 matrix. Using a matrix helps ensure that scenarios are different in a
logical, non-random way based on the top scoring key factors (Ogilvy & Schwartz, 2004).
Although three axes can be used, instead of two, three axes or dimensions may make it harder
to communicate scenario logics to others who were not part of the process. Experts note that
groups have greater difficulty discussing or remembering more than four scenarios. A Federal
agency project that developed 10 scenarios resulted in too many to be meaningful—their
distinctions were too blurred. Those who fear losing complexity by settling on only two factors
should be reassured that they will add complexity in as they flesh out scenarios (Ogilvy &
Schwartz, 2004).
• Option 2: Use an inductive approach. One inductive approach is to have the team brainstorm
different scenarios. The goal is to develop stories that are based on major events or innovations
(“emblematic events”) that have dramatic implications (Chermack, 2011). In this approach, have
the group start with events or plot elements and spin larger stories around them.
Using the second inductive approach, known as the official future approach, have the team start
with the future that decision makers really believe will occur and then develop radically
different futures. The “official future” is a term used to denote a desired future that has been
“selected” by senior management. It is usually a plausible, non-threatening scenario with stable
growth and no surprising changes from the environment, but it may reflect fears that the
company is in trouble (Ogilvy & Schwartz, 2004). It is often the surprise-free, status quo future
(Chermack, 2011). This may also be called the “no change future state.”
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Annual reports, forecasts and other analyses are also useful for identifying the official future. An
official future scenario may be developed by trending out, or extrapolating, current workforce
statistics and developing a scenario around them. It can provide a baseline against which other
scenarios are compared.
Interviews can be highly useful for the inductive approach (Chermack, 2011). For example,
interviews with 10-15 top managers in different parts of an organization can be used to identify
key drivers, using questions such as:
• What will the future look like in 10 years?
• Where will the organization be in 10 years, and how will it get there?
• Where might our forecast be wrong?
• What keeps you up at night?
After conducting interviews and defining the official future, have the team brainstorm variations
to the official future based on possible, but surprising, changes to the key driving forces.
Understanding the driving forces of the official future can help determine how to vary it to
develop alternative scenarios. The team should explore how interactions between key forces
may produce unexpected outcomes and different scenario logics (Ogilvy & Schwartz, 2004).
Groups may produce variations on the future (Australian Public Service, 2011; Human Capital
Institute, 2010).
A possible future
Something that could happen and is not impossible to imagine
A plausible future
Something that could realistically happen and may be worth
considering
A probable future
Something that may be likely to occur and may be an
extension of a current reality and quite predictable
The preferred future
Where the organization would like to go
The targeted future
A future that may be an offset of the preferred future, but it
can be realistically achieved. It can help drive gap analysis and
action planning
The APS (2011) advises organizations that they will usually need no more than three scenarios
that vary in their impact on workforce demand. These should include the “known path” or
“baseline” and “alternative futures.” In refining and filtering scenarios, the APS suggests moving
from the possible to the plausible to the probable.
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In contrast, the U.S. Department of Energy (2005) recommends that four scenarios should
be created:
• A best case scenario
• A worst case scenario
• The most likely scenario
• The preferred scenario
One study (Human Capital Institute & Aruspex, 2008) reported that companies thinking
strategically tended to follow three primary steps:
1. Quantitative Futuring: Articulating the future and what the workforce for it would look
like were a steady state likely to continue
2. Qualitative Futuring: Identifying potential alternative business futures (“scenarios”)
and the capabilities and demographics to deliver the business strategy to meet
each scenario
3. Targeted Futuring: Analyzing the resulting content and fine tuning it to develop a
targeted future with a measurable plan of action
Thus, this approach seems to include a no change future state based on extrapolation of current
trends, development of alternative futures, and selection of one future scenario that the
organization wants to target. This targeted future is a similar concept to that of the official
future, although as a result of the scenario planning process it may have modified the official
future to include improvements.
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Step 3.
Scenario Development
• Finalize selection of scenario logics. When following Chermack’s (2011) deductive approach, the
scenario team should develop the scenario logics by selecting issues ranked high on both impact
and uncertainty to build a scenario matrix. Issues ranked low impact—high uncertainty require
further research because of the high uncertainty ranking. High uncertainty rankings simply mean
that the eventual outcomes of these issues are unknown. Even though the group has agreed
that their impact is low, it is worth conducting some
extra research because of the issues’ potential
volatility. Finally, issues ranked high impact—high
uncertainty are considered the critical uncertainties.
These are the issues that have the potential to
fundamentally shift assumptions for strategy. These
critical uncertainties are used to construct the
scenario logics in this approach. One develops
scenarios by com
bining two critical uncertainties.
When following an inductive, official future approach,
have the team identify the scenario that will be the
official future or known path and make it the main
focus of the workforce plan (APS, 2011). The other
plausible scenarios will become alternative futures.
The team should analyze the impact on future
workforce demand of the official future, as well as the
alternative futures. By analyzing the impact of the alternative futures, the organization can
respond more quickly to rapid changes from the official future to the alternative future.
Consider looking at possible scenarios that would take the organization above and below their
known path for the number of staff and mix of capabilities required. In addition to the impact on
workforce demand, these techniques will help to assess the likelihood, consequence, and
mitigation strategy for each alternative future identified.
A word of caution: Some experts express concern about overemphasizing a known path or
targeted future. Ogilvy and Schwartz (2004) suggest that one should not just check the most
likely scenario plots or assign probabilities or likelihoods to the scenarios. They recommend not
fixating on just one desired scenario and being in denial about other possibilities. If managers
identify one as the most likely scenario, it may not challenge decision makers’ mental maps.
That would defeat the purpose of scenario planning (Ogilvy & Schwartz, 2004).
• Fully develop the scenarios. Once the group has chosen the scenario logics, have it populate
each scenario with a storyline or plot. The scenario team may want to break up into sub-
teams responsible for each of the scenarios. Writing may be best done by an individual
(Chermack, 2011).
Scenario logics should be plausible,
challenging, and relevant. They must
be plausible in that they can
potentially draw from data and facts
and present an acceptable view of the
future. They must be challenging in
that they can assemble events and
facts in a way that challenges the
current mental models. They must be
relevant in that they relate to the key
issues that have been expressed during
the project and draw on managers’
real concerns.
Chermack, 2011, Kindle locations
2579-2580.
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You may wish to label the matrix extremes and develop a narrative for each quadrant. In the
narrative, the team should describe the situation and impacts on the organization, its ability to
execute strategy, and its workforce (Human Capital Institute, 2010). Simple plots and a short list
of characters help managers understand, use and communicate scenarios (Chermack, 2011).
Each scenario needs a narrative with a beginning, middle, and end. Questions useful for
developing narratives include (Ogilvy & Schwartz, 2004):
• How did the world get from the present to the new scenario situation?
• What events are necessary to get to the end of the new scenario?
• What characters live in the scenarios?
• What institutions, nations, or companies are drivers?
Scenarios need to be absorbing, convincing stories with believable plots to be effective. Each
scenario should have a newspaper headline or name that describes its essence to aid memory. It
can be useful to have an “elevator speech” or short summary describing each scenario to help
communicate it (Ringland, 1998).
Common plots include winners and losers, good news versus bad news, challenge and response,
and evolutionary change (growth or decline) over time. Others include revolution/dramatic
change, disaster, economic cycles, infinite growth, lone ranger against evil/corruption,
generational, epic, impossible mission, coming of age, doing the right thing, perpetual change,
or a wild card scenario that does not fit neatly on a 2 x 2 matrix (Chermack, 2011; Ogilvy &
Schwartz, 2004).
Some common scenarios faced by the public sector may include (Australian Public
Service, 2011):
• Implementation of a new piece of legislation requiring an internal organizational
restructuring
• Introduction of a new policy
• New policies arising out of an unexpected election outcome
• The ending of function due to a change in who is responsible for it (i.e., privatization of a
service or function)
• Reduction in funding resulting in a reduction in workforce affordability
Each scenario needs to present data to support its story line in a surprising and interesting way.
Members or sub-teams may need to gather more information on the driving forces in each
scenario, as well as what is uncertain and what is inevitable. Such research might include
questionnaires, observations, surveys, documents, strength-weaknesses-opportunities-threats
(SWOT) analysis, forecasts, trend analysis, and internal interviews to understand dynamics of
the internal and external environments. Involve those who will use the scenarios and internal
leaders from different functions and levels of the company, as well as individuals with a high
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degree of organizational knowledge. Explore social, technological, economic, environmental,
and political forces (Chermack, 2011).
Team members should talk through the scenarios and give each key factor and trend some
attention in each scenario, then weave the pieces together in the narrative (Chermack, 2011).
The interplay between the key factors ultimately shapes the scenarios, but the other significant
environmental factors from the brainstorming phase are used to develop the plots. The group
can look at other factors and trends and ask, “What is the value of this variable in each of the
scenarios?” Each should be given some attention in at least one scenario, and some, such as the
predetermined elements, may show up in all of them (Ogilvy & Schwartz, 2004).
Each scenario needs a summary, a slide deck, and, perhaps, a glossy booklet with images.
A timeline with memorable incidents can be a useful graphic. Graphics are important for
communication—pages of small type with a lot of detail and no explanation of the essence
of the scenario will not communicate as well (Ringland, 1998). The more involved managers
get with the scenarios, the more likely they are to understand their implications
(Ogilvy & Schwartz, 2004).
Step 4.
Scenario Application
• Scenario application techniques. This phase is concerned with how to use scenarios for
workforce planning. Although many companies use scenario planning interventions, most
emphasize scenario development rather than application. The development of scenarios can
be fun, but their value for strategic planning is in their
application. The time and effort spent on scenario
development should be mirrored in scenario
application and use (Chermack, 2011).
Members of the team that apply the scenarios to
workforce planning do not necessarily need to be the
same as those who developed the scenarios. Those
chosen to develop scenarios may have skills and
abilities particularly relevant to that process, while
those who can assess how the scenarios will affect
workforce needs may include others with knowledge
and insight particularly valuable for this phase of the process.
Those who will be applying scenarios to analyze how they would affect the organization’s
workforce demands will require a clear understanding of the scenarios. Some techniques that
others have used in the application phase for presenting scenarios include:
Communicating the scenarios and
their operational implications is a
critical part of the scenario planning
process. Scenario planning will fail if its
product is merely a handsome report,
read once by only a few executives,
and then allowed to gather dust on
the shelf.
Ogilvy & Schwartz, 2004
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• Scenario presentations. The scenario project leader or facilitator can present all of
the scenarios, or individuals who wrote the specific scenarios can present them. The
presentations should be short, involve the essence of the stories, and use colorful
pictures or slides to describe each scenario. The leader or facilitator then facilitates
a dialogue relating back to the initial focal question for the scenario project.
• Scenario videos or plays. These may be more powerful than presentations in
communicating scenarios and bringing them to life (Chermack, 2011).
• Scenario rooms. For each scenario, team members assemble a room reflecting
one of the scenarios. Each room has walls plastered with artifacts, posters,
banners, and newspaper articles that characterize the scenarios. Scenario rooms
may increase the degree of immersion in scenarios (Chermack, 2011).
Potential techniques for analyzing scenarios include:
• Different views. The leader or facilitator asks participants to focus on a scenario using a
particular view for a short time. The participant(s) must maintain that perspective
during this period. Example of views are:
Logical and analytical
Emotional
Devil’s advocate
Cautious
Positive/optimistic
Creative
Synthesizing
• Use of outsiders. The team involves outside experts and individuals with very different
points of view to provide objectivity and original contributions.
• Strategy development. The team develops a strategy to deal with conditions of one
scenario, then tests the strategy against other scenarios. Finally, the group develops a
“resilient” strategy that can deal with wide variations in business conditions
(Ringland, 1998).
• Strategy evaluation. In this technique the focus is on testing a current strategy. The
group asks, “Is the strategy effective in the range of conditions presented in the
scenarios? What modifications to strategy or contingency plans are needed?”
(Ringland, 1998).
• Wind tunneling. Wind tunnels are used to test the aerodynamics of solid objects by
blowing air past the object using a powerful fan system. In scenario planning, wind
tunneling is similar to the techniques described above under strategy development and
strategy evaluation—wind tunneling is used to analyze the possible effects of a variety
of conditions. Wind tunneling is used to test decisions for robustness and for exposing
opportunities and risks through sensitivity and risk analysis (Ringland, 1998).
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The scenarios are used to explore strategies, capacity, key decisions, and other
important items. Scenarios act as conceptual wind tunnels in which the team is
adjusting assumptions as they enter the different worlds described in the scenarios
(Chermack, 2011).
• Scenario immersion. The facilitator explains that the goal is to develop as many ideas as
possible about how the organization should proceed and encourages participants to
think broadly to capture a wide range of possible actions decision makers could take. As
each scenario is presented, the facilitator asks participants to identify three to five
opportunities and three to five threats. Once this is completed, participants nominate
one threat and one opportunity they believe to be critical to a scenario. Participants’
combined input is used to identify a core set of opportunities and threats. When critical
opportunities and threats have been identified, the process turns to strategies for
capitalizing on strengths and addressing threats. Participants then develop a strategy
they believe could be effective for addressing that scenario. The group is asked to
consider all of the strategies that have been brainstormed, and to look for the strategies
that are useful more than one scenario. The goal is to identify two or three strategies
that are viable across all or multiple scenarios. (Chermack, 2011).
• Discussion questions for each scenario. There are many questions that a group may choose from
to explore scenarios for workforce planning. The table below lists potential questions you may
wish to choose from.
Questions to Ask About Each Scenario
Questions for Comparing Scenarios
•
What impact would this have on the work
you will undertake in the future?
• What activities would cease?
• What particular outputs would
be affected by this change?
• How would you deliver
those outputs?
•
Something that could realistically happen
and may be worth considering
• How will changes in the scenario affect:
• Our employment brand?
• Organizational climate?
• Attrition?
• Organizational structure?
• Recruitment?
• Workflow?
• Use of technology?
• Job design?
• Selection?
• Mission critical occupations
or roles?
• Something that may be likely to occur and
may be an extension of a current reality
and quite predictable
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•
Mission critical competencies
or skills?
• Our staffing and competency
needs for leaders?
• Clients/customers/stakeholders?
• Geographic location of the
workforce?
• What vulnerabilities have
been revealed?
• What risk management strategies and
contingency plans are needed?
• What additional information would we
like to have?
• What leading indicators or signposts could
the organization use to monitor the
environment as early indicators of which
scenario is closest to what is actually
unfolding over time? That is, what are the
early warning signs for each scenario that
would indicate that
it is occurring?
• How can the organization supply the
workforce needed?
• How would the particular
conditions in a scenario affect how
the organization can supply the
needed workforce? That is, how
would the conditions constrain or
enable the organization’s ability to
supply the necessary workforce?
• What general actions would we
recommend, having considered
each of these scenarios and their
implications?
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Step 5.
Project Evaluation
The relationship between scenario planning and organizational performance improvement may
seem obvious, but not all scenario planning projects succeed. Few studies have examined the
link between scenario planning and performance in terms of economic benefit (Chermack,
2011).
How can you decide whether the scenario-planning process was useful? Establishing a clear
purpose and focal decision or question to guide the project is an important step for improving
the likelihood the project will succeed (Chermack, 2011). The purpose and outcomes can also
provide the foundation for evaluating whether the project has succeeded. Using the focal
decision or question and expected outcomes for the project, an evaluator can measure actual
project outcomes relative to the expected outcomes.
Levels of evaluation for a scenario-based workforce planning effort can include:
• Participant and stakeholder reactions and satisfaction with the project
• Knowledge or skill gain, if learning was an objective for the effort
• Degree to which the organization was prepared for changing workforce needs in the
years following the scenario planning exercise
• Cost-benefit results
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Case Study
Step 1. Project Preparation
The Chief Human Capital Officer (CHCO) and Chief Performance Officer (CPO) for Agency DOZ decided to
use scenario-based planning as part of the workforce planning process for agency strategic planning.
The project was assigned to the Manager for Workforce Planning. The CHCO and CPO, in giving the
assignment to the Manager for Workforce Planning, indicated that the purpose for conducting scenario-
based planning was to identify workforce plans that would make the agency better able to respond to
alternative future scenarios affecting national health.
The CHCO assigned two HR specialists with experience in project evaluation to work with the Manager
for Workforce Planning to develop an evaluation plan during Step 1 of the project. These HR specialists
were only involved as evaluators for the scenario planning project, but did not participate in scenario
exploration, development, or application.
The Manager for Workforce Planning formed a Scenario Development Team that included managers,
supervisors, and senior, experienced employees. The Scenario Development Team members included
two individuals from the HR department, two from strategic planning, and one from budget and each
operating division. They had assistance from two clerical and administrative staffers from the strategic
planning department.
After developing a project plan and schedule, they began by updating an environmental scan that had
been conducted two years earlier. They examined:
• External influences on DOZ’s environment, including changes in the U.S. population and related
effects on the demand for its services
• The political environment and possible changes to their mission and programs from legislative
action and upcoming major legal decisions
• Expected future budget challenges facing the department
• Expected changes in the technology that DOZ uses in its work
To collect information on these themes, the project Scenario Development Team:
• Interviewed division and branch heads
• Conducted external interviews with partner organizations
• Conducted a literature search on the changing nature of the population and technology and
futurist themes related to the above issues
• Interviewed technology providers about innovations and current research and development
• Analyzed workforce data and survey data on intent to remain with the agency from the
past 5 years
Members of the Scenario Development Team presented their findings to the CHCO and CPO.
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Step 2. Scenario Exploration
The Scenario Development Team had an external expert facilitate workshops on scenario exploration to
develop the logic for their scenarios. They used three full-day workshops for this step. They had two
workshops the first week and the third workshop the next week.
Because the organization did not have experience using scenario-based planning, they decided to use a
deductive approach to prioritize the list of key factors and driving forces they had identified during the
environmental scan and interview process. They started with an introduction and then brainstormed a
list of key factors influencing future workforce needs.
On the second day, they ranked the factors on the list based on expected impact on the agency and
uncertainty of occurring. After ranking each factor on both issues, they arranged the issues on a matrix
that had impact on the horizontal axis and uncertainty on the vertical axis. Based on their rankings, they
found that the factors with the greatest impact and uncertainty were political (i.e., possible government
directions from legislation, policy change, and pending court decisions) and agency budget for new
technology.
On the third day of their workshop, the Scenario Development Team outlined four scenarios. The
outlines included the levels on the two main factors (i.e., political directions and technology budget) and
other factors that should be incorporated, if possible, into the scenarios because they are also relatively
high on impact and uncertainty. Similar to the U.S. Department of Energy’s (2005) recommended
approach, the Scenario Development Team outlined:
• A best case scenario
• A worst case scenario
• The most likely scenario
• The preferred or targeted scenario
Step 3. Scenario Development
The Scenario Development Team broke up into four sub-teams. Each sub-team spent the next month
conducting additional research and discussion. They began drafting the scenarios. Members of a sub-
team worked together to develop a narrative plot line, with a beginning, middle, and end and what led
to the situation in the scenario. They identified central characters and the external institutions, leaders,
and technologies that were important to the scenario. In addition, they developed a title, short
summary, and news article to describe the scenario. They also developed a slide deck and booklet to
describe the scenarios. During the scenario development process they had access to the expert
facilitator when they had questions about how to move forward.
All sub-teams completed their scenarios within 10 weeks.
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Step 4. Scenario Application
Representatives from each sub-team presented their scenario to a scenario application group that
included the other sub-teams as well as several additional managers and operational specialists. The
main focus of the discussion of each scenario was on how the situation would affect the work the
agency does and the workforce needed to do the work.
The scenario application group was asked to consider the following questions for each scenario:
• What impact would the scenario have on the agency’s work processes?
What activities would cease?
What activities would need to be increased or added?
How would the agency perform those activities?
• What impact would the changes on work processes have on the types of jobs in the agency?
What kinds of workers could perform the new or increased activities?
What kinds of workers currently perform the activities that would cease?
What options would there be for a mix of different types of workers/jobs to perform the
work under the scenario’s conditions?
• How does the agency’s current workforce compare to the workforce that would be needed in
this scenario?
What jobs would need fewer workers?
What jobs would need more workers?
What new jobs would need to be created?
• How would the scenario’s conditions affect the ability to supply the additional workforce
needed to perform the work?
• What vulnerabilities have been revealed?
• What additional information would we like to have?
The facilitator and her assistants recorded the methods used for the sessions, the scenario application
group’s line of discussion, and their conclusions. The original, smaller Scenario Development Team
reviewed the reports and developed a summary report that explored the range of alternatives for the
workforce and the most common or likely impact on workforce demand and supply. Executives involved
in strategic planning, including the CHCO and CPO, reviewed the final draft reports. The facilitator and
Scenario Development Team also briefed the executives on the results. After collecting some additional
information, the Scenario Development Team finalized the reports.
The Manager for Workforce Planning was responsible for taking the output from the scenario-planning
process to refine workforce projections for the number of employees needed by job for the most likely
and target scenarios.
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Step 5. Project Evaluation
After completion of Step 4, the HR specialists responsible for evaluating the project administered
questionnaires to participants about their reactions to the process and satisfaction with its usefulness.
The evaluators also reviewed stakeholder comments on the reports that resulted from the project. Each
year, for three years following the project, the evaluators compared how actual workforce supply and
demand compared to the projections and interviewed key stakeholders about how well prepared the
agency was to meet workforce demands. They examined the degree to which the scenario planning
results were used to prioritize recruitment, orientation training, and workforce development. They also
examined productivity records for common, central processes that continued throughout the period.
24 | Page
Where to Look for More Information
References
Australian Public Service Commission (2011, December). Australian Public Service workforce planning
guide: Demand analysis. Retrieved from
http://www.apsc.gov.au/publications-and-media/current-
publications/workforce-planning-guide.
Blyth, M.M. (2005, March). Learning from the future through scenario planning. Four Scenes Pty Ltd.
Retrieved from
http://www.fourscenes.com.au/LearningFromScenarios0305.pdf.
Chermack, Thomas J. (2011). Scenario planning in organizations (Publication in the Berrett-Koehler
Organizational Performance). Berrett-Koehler Publishers. Kindle Edition.
Economist. (2008, September 1). Scenario planning. Retrieved from
www.economist.com/node/12000755.
Chermack, Thomas J. (2011-02-14). Scenario Planning in Organizations (Publication in the Berrett-
Koehler Organizational Performance) (Kindle Locations 4079-4080). Berrett-Koehler Publishers.
Kindle Edition.
Human Capital Institute (2010). Strategic workforce planning participant’s guide, v. 3.0. Cincinnati,
OH: Human Capital Institute.
Human Capital Institute and Aruspex (2008, November 17). Identifying business value in workforce
planning: Articulating the return on strategic workforce planning Retrieved from:
http://www.hci.org/files/portal-upload/hci/hciLibraryPaper_80228.pdf.
Kahane, A. (2007). The Mont Fleur scenarios. Retrieved from:
http://www.montfleur.co.za/about/scenarios.html.
Mercer (2011). The need for rigorous strategic workforce planning in today’s volatile environment.
Mercer LLC. Retrieved from
http://www.imercer.com/uploads/Europe/pdfs/hc-strategic
workforce planning.pdf
.
Nana, G., Stokes, F., & Lynn, A. (2010, November). Academic workforce planning—Towards 2020. BERL
Economics Report #project 4783 to the Universities NZ HR Committee Project Steering Group.
Wellington, NZ: Business and Economic Research Limited. Ogilvy, J., & Schwartz, P. (1998 ). Plotting your
scenarios. Global Business Network. Retrieved from
http://www.gbn.com/articles/pdfs/gbn_Plotting%
20Scenarios%20new.pdf
.
Ringland, G. (1998). Scenario planning: Managing for the future. Chichester, England:
John Wiley & Sons, Inc.
U.S. Department of Energy (2005, September). Guide to workforce planning at the Department of
Energy. Retrieved from
http://energy.gov/hc/downloads/guide-workforce-planning.
Vernez, G., Robbert, A.A., Massey, H.G., & Driscoll, K. (2007). Workforce planning and development
processes: A practical guide. Santa Monica, CA: RAND Corporation.
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Web Sites
www.thomaschermack.com – The latest research on scenarios.
www.scenarioplanning.colostate.edu – The Scenario Planning Institute at Colorado State University.
www.weforum.org/en/initiatives/Scenarios/index.html –A variety of reports and scenario projects are
free to download directly from the World Economic Forum.