Cross impact analysis method

This method was originally developed by Theodore J. Gordon and Olaf Helmer in 1966 while creating a game called Future for Kaiser Aluminum and Chemical Company and answering the question: “Can forecasting be based on perceptions about how future events may interact?” This method is an analytical approach to the probabilIties of an item in a forecasted set. Its probabilities can be adjusted in view of judgments concerning potential interactions among the forecasted items. Its steps are: 1) to define the events, 2) to estimate the initial probability, and 3) to estimate the conditional probabilities – the impact of one event's occurrence on the likelihood of another's. When the initial probabilities are estimated with reference to other event probabilities, some additional information enters into the estimation of the impact matrix. For each event combination, there are limits on the conditional probabilities that can exist. Cross-impact analysis can stand alone as a method of futures research or can be integrated with other methods to form powerful tools. When integrated, cross-impact allows the introduction of perceptions about the future into otherwise deterministic methods. It has four phases: 1) Early exploration, 2) Probabilistic considerations, 3) Synthesis, and 4) Application. it can be used for the analysis of the interactions among one or more events in a set, some of which have impacts on others. There are many variations. It can be used to assess the collective impacts of trends as well as events. A list of items are entered vertically on the left side of a matrix and the same list is entered horizontally at the top the matrix Each trend or event (row label) is then ‘impacted’ on the others in the columns, using a simple scoring system to assess the strength of the interactions, e.g.," –10…0…+10". Items are not impacted on themselves; hence, a diagonal line of spaces remains blank or filled with Xs. The field of interactions is assessed by summing the rows to get the high impact items. This can also be filled in with subjective text: how one item can change another item. This creates a set of questions important to scenario construction.