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Critical decisions–four-quadrant scenario analysis

The widely-used four-quadrant scenario method is usually based on weighing the potential outcomes of a pair of uncertainties. Using a four-quadrant diagram with the two uncertainty dimensions gives us four distinct "what if" scenarios. It’s a great tool for analyzing possibilities, and also sometimes for presenting a range of potential scenarios in a logical, clear way.

But the model can also be readily used to test out potential decisions. This works when the future focus is more tightly on a system that we can control directly, especially, an organization’s decisionmaking. In other words, if for one or both of the “uncertainty” dimensions the uncertainty is what we will decide to do, the what-ifs of the diagram become “What if we do this?” versus “What if we do that?”

In the example below, a youth baseball organization faces a decision about whether to expand its more competitive “travel” program, or to maintain its status as a recreational league. The uncertainty dimension is, in this example, in-region competition, i.e. the marketplace. But the key is using the tool to explore a decision the League needs to make.

A leadership group won’t necessarily agree on the impacts of the decision, but arraying the possibilities in this way helps bring their focus on the what-ifs of taking a particular action. At a minimum, it will clarify where they do and do not agree, what their assumptions are. Also, the tool will help them play out potential risk in their actions, even if they are unsure of the outcomes—they can map out scenarios of risk in their decision. 

Critical Decision

 

See some great insights here too: http://www.ribbonfarm.com/2009/04/20/how-to-draw-and-judge-quadrant-diagrams/

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{ 2 comments… add one }
  • Arvind Mahesh October 4, 2017, 5:58 pm

    Nice and simple explanation. Was very helpful. Thank you!

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