7. Scenario planning methodology
7.4 Methodology
For the purpose of this research, a scenario planning methodology is used that is grounded on the work of Schoemaker (1995). His model is adapted based on more recent publications (Godet, 2000; Bishop et al., 2007; Peterson et al., 2003) and project-specific characteristics. Each deviation from the initial model is documented. There are ten steps, which are explained below.
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1. Define scope
A scope is needed to determine what is researched and what not. Such a scope includes also some of the characteristics discussed above. Regarding the model of Schoemaker (1995), certain assumptions are added to the scope section in paragraph 8.1, in order to be able to academically discuss the future. In the end, everything planned or expected to happen in the future is uncertain, and therefore assumptions have to be made to only deliver a specific subset of all possible future scenarios.
2. Identify major stakeholders
Stakeholders need to be identified who have interest in blockchain technologies or financial structures or are affected by these subjects. For Rabobank Netherlands only, thousands of stakeholders can be identified who work in the international payments field. As explained above, most of these stakeholders have never heard of Ripple or other decentralized ledger systems and given the time it costs to educate someone DLPs and cryptocurrencies, it is not manageable to question them due to a lack of understanding. Therefore, only stakeholders are identified which work in these areas but do have an understanding of Ripple or other DLPs. Participants are invited for an interview based on their background, their expertise or their industry.
The goal of identifying stakeholders is not to directly question them for their needs, fears and expectations or to model them in a power-interest matrix. The goal is to get input and feedback from them on current DLPs and future scenarios for DLPs in the interbank payment field. In each interview, participants are asked for their vision on the basic trends, key uncertainties, dynamics and ultimately the scenarios. Their input is thus used for completing step 3-6, and 8.
3. Identify basic trends
This step analyzes what political, economic, societal, technological, legal, industry and DLP specific trends might affect the functioning or potential adoption of DLPs for interbank payments. Stakeholders will be questioned for these trends, but also the desk research approach will be used by analyzing papers from various fields about trends for the financial world. Knowing these trends helps to be better ensured of the likeliness of certain scenarios. If for example biometrical identification is a trend, this might be beneficial for scenarios in which identification in the DLP is of great importance. All participants should agree on these trends. If there are disagreements, the trend becomes an uncertainty and will be addressed in step 4.
4. Identify key uncertainties
Key uncertainties address the events or outcomes which are yet unknown, but will significantly affect future scenarios. Important uncertainties are addressed, and possible outcomes are determined. This enables to create different scenarios, based on these uncertainties. In this, the above discussed scope is of great importance. It can be regarded as an uncertainty if there comes a new crisis which affects current interbank payments, but this is not excluded from the scope. In this scope, some assumptions are presented which ignores this type of ‘surprise’ uncertainties. It is important to analyze the relationships between uncertainties and dynamics. Some combinations might not occur, and can therefore be excluded. The relations between trends, uncertainties and dynamics are visualized in a concept mapping in paragraph 8.6.
Uncertainties should not be under control of a certain actor. If an uncertainty can in any way be deliberately influenced by a stakeholder, this becomes a dynamic. These dynamics address future behaviors of actors within the system, or about unknown changes in system drivers (Peterson et al., 2003). To separate the controllable and uncontrollable uncertainties and events, a new step is added: identify dynamics.
5. Identify dynamics
Scenario dynamics are the events and processes that make up the story of a scenario (Peterson et al., 2003). These dynamics should be plausible in order that nature, networks or actors should not behave in implausible ways. In comparison to the key uncertainties, the dynamics are performed by (partly) influential actors and these dynamics form milestones of the path towards a possible end-state.
6. Construct initial scenario themes
As explained in paragraph 7.2, the technology chosen for scenario creation is Morphological Analysis. Most relevant uncertainties are chosen and they are mapped in one or more quadrants. Shifting away from the traditional method of constructing these scenarios, multiple sets of uncertainties are used to create multiple
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sets of scenarios. These different sets of scenarios should be related, but may depend too much on each other. If one particular scenario of a first quadrant is reached, all scenarios of a second quadrant should still be available, although chances may change.7. Check for consistency and plausibility
As the trends, uncertainties and dynamics are of qualitative nature, the check for consistency and plausibility is also qualitative. After sets of scenarios are made, particular scenarios are deleted or revised which are not plausible or in consistency with the environment. Scenarios might also get a little twist in order to make them more reliable. Some elements can be used to verify each scenario (Schoemaker, 1995). First, if the trends and uncertainties are compatible within the chosen time frame. Second, if there are any combinations of outcomes of uncertainties that can be regarded as impossible. Third, if there are potential stakeholder dynamics which may accelerate or delay some scenarios.
8. Validation by stakeholders and experts
There are two forms in which stakeholders and experts can validate the concept model of scenarios. The first form is the validation on the trends, uncertainties, dynamics and scenarios during the interview. After the stakeholder gives its own input, he validates the summarized input given previous by other stakeholders. Therefore, all mentioned trends, uncertainties, dynamics and scenarios already incorporate this form of validation from the stakeholders. The second form of validation takes place after all stakeholders are interviewed. A final model is created of all scenario planning elements and each stakeholder is personally invited to review this final model. This is a necessary step, as the first interviewed stakeholders did review less content than was ultimately delivered.
9. Develop learning scenarios and finalize scenarios
This step enables to finalize scenarios after receiving validation from stakeholders and subsequently converting these scenarios into learning scenarios including identifying factors. Scenarios are iteratively improved after validation by stakeholders, resulting in not explicitly mentioning this step during the scenario planning.
10. Future research and decision making
The last step in a scenario planning is finalizing scenarios and identifying directions for future research (Schoemaker, 1995). A scenario planning might also be used for decision making. Identifying factors and related consequences should be clearly stated to give management an opportunity to steer into a certain desirable future (Peterson et al., 2003). As a decision model is not in the scope of this research, this step is left out of the scenario planning, but is indirectly treated in the conclusion and recommendation of this thesis.