How do you create realistic and relevant risk scenarios for your industry?

2 Gather data and information

The next step is to gather data and information that can inform your risk scenarios. This may include historical data, industry trends, market analysis, stakeholder feedback, expert opinions, and best practices. You can use various sources and methods to collect and validate the data, such as surveys, interviews, workshops, reports, or online tools. The data and information should be relevant, reliable, and updated to reflect the current and future context of your industry.

3 Analyze and prioritize the risks

Once you have the data and information, you need to analyze and prioritize the risks that may affect your industry. You can use different techniques and frameworks to do this, such as SWOT analysis, PESTLE analysis, risk matrix, or risk register. The aim is to identify the most significant and probable risks that could have a negative or positive impact on your objectives, performance, or reputation. You should also consider the interdependencies and correlations among the risks and how they may influence each other.

4 Develop the scenarios

Based on the analysis and prioritization of the risks, you can develop the scenarios that illustrate the possible outcomes and consequences of the risks. You can use different approaches and formats to create the scenarios, such as narrative, graphical, numerical, or simulation. The scenarios should be realistic, consistent, and plausible, but also challenging and diverse enough to capture the uncertainty and complexity of the risk environment. You should also define the indicators and metrics that can measure the impact and likelihood of the scenarios.

5 Validate and communicate the scenarios

The final step is to validate and communicate the scenarios to ensure that they are accurate, relevant, and useful for your industry. You can do this by testing the scenarios against the data and information, checking the assumptions and logic, and soliciting feedback from stakeholders, experts, or peers. You should also communicate the scenarios effectively to your intended audience, using clear and concise language, visuals, and stories. The scenarios should highlight the main risks, opportunities, and implications for your industry and provide actionable insights and recommendations.