In 2009, UNIFE, the association of the European rail industry, felt certain that the future would not be a linear projection of the past. The financial crisis and subsequent recession were putting unprecedented stress on customers. Trade patterns were shifting. New competitors were emerging. UNIFE’s members needed to think both more expansively and more creatively. They needed scenarios.
They convened a small working group of executives from major rail companies. This group took four weeks to prepare for a one-day scenarios workshop. They explored data on a carefully selected set of megatrends—such as urbanization, the rise of China, sustainability, terrorism, the increasing scarcity of fossil fuels, and increasing bandwidth and other technology trends—that had some bearing on the future of the rail industry. Eventually, they settled on four “2025 variables” that would be the starting point for the workshop:
Shipping bananas from Harare to Barcelona
Preparing a tender for bids to supply trains for a new rail project
Arriving at New York Penn Station on a Monday morning
Reading the cover of the 2025 year-end holiday double issue of the Economist
On the day of the scenarios exercise, a broader group of senior executives brainstormed a set of hypotheses for each variable. Their hypotheses had to be plausible and supported by specific industry, macroeconomic, or social trends—yet also improbable, as in the Google example. When imagining possibilities for the 2025 rail tender, for example, UNIFE generated a range of hypotheses, including one in which a winner-take-all tender would be conducted every ten years for the whole of Europe, and another in which customers bought trains through online catalogues, without tenders or bids. (The high-level process that UNIFE went through is represented in the exhibit below.)
They then grouped some of the hypotheses into coherent clusters that could serve as the basis for specific scenarios, ultimately settling on four such clusters. But the four were not yet scenarios. They needed color. Much as in a novel, play, or film, a strong storyline is essential to fostering real intellectual and emotional engagement. By the end of the day, the group had outlined four scenarios.
World@Home. Urbanization and advances in communication enable people to work from home, giving rise to increased productivity. Environmental and nutritional concerns have increased the demand for locally sourced products. People mobility is secondary to the movement of goods.
Mission Mobility. A revolution in energy science spawns new modes of low-cost green transport, leading to the increased movement of both people and goods—and putting greater pressure on the rail industry to differentiate itself in terms of speed, service quality, and price. End customers come to expect seamless intermodal shipping solutions.
Divided Nations. The world economy remains in poor shape. The European Union, World Trade Organization, and other regional trade blocs are breaking down. Protectionism is on the rise and transport is mostly local as a result of rising barriers between regions.
Dragon Corp. The world has bifurcated into two main regions. The West has become poorer, while China, now an industrial and financial powerhouse, dominates the global economy. Chinese rail enterprises lead the world with cutting-edge technology and low costs.
Clearly, none of the four scenarios is likely to unfold in its entirety, but each presented an engaging “box” within which UNIFE members could evaluate existing strategies and imagine radical new ones. After the one-day workshop, communication materials were developed to support the scenarios, enabling the people who were not directly involved in the exercise to understand the rationale and implications of each one. This created a common language that contributed to strategic planning and decision making within and across UNIFE’s member companies.
Members have found these scenarios both provocative and practical as they grapple with how to plan for a changing world. A senior strategy executive at Alstom stated that the scenario-planning day was “intellectually challenging and very refreshing,” and that it also “forced our group to think beyond conventional wisdom and in uncharted territory…The resulting scenarios became a valuable basis for building our long-term strategy.” Another participant, a former international manager of the French railway system, stated that the scenarios, while extreme, were far from academic. “We are already beginning to see that our industry is evolving and facing a mix of the scenarios,” he remarked. The experience has helped member companies to be more attuned to “weak signals” and thus more prepared to adapt to shifts in their markets.