delphi-method

What Is The Delphi Method? The Delphi Method In A Nutshell

The Delphi method is a survey-based framework for estimating the likelihood and outcome of future events. The Delphi method is a survey-based framework for estimating the likelihood and outcome of future events. It was developed in response to military strategy formation during the Cold War. The Delphi method has been adapted considerably since the 1960s.

Understanding the Delphi method

The Delphi method was developed during the 1950s and 1960s to forecast the impact of technology on warfare. At the time, experts were asked to give their personal opinion on the probability, intensity, and frequency of enemy attacks during the Cold War. Opinions could be offered anonymously, and the process was repeated until a consensus became apparent.

Today, the Delphi method remains a structured and systematic forecasting process based on multiple rounds of questionnaires sent to a panel of experts. The method has been used to predict trends in automation, aerospace, and the use of technology in schools. Furthermore, the Delphi method can predict outcomes in business forecasting, policy formation, clinical work, and project management.

Delphi method characteristics

Although there is considerable variation in how the Delphi method is applied, there do exist some generally accepted characteristics in the form of best practices:

  1. It must incorporate a group of participants, or panelists, selected for their relevant and specialized knowledge on a topic. A neutral facilitator with knowledge of research and data collection is also recommended. 
  2. An initial idea generation stage should be held to get a broad sense of the most important issues.
  3. It is often conducted across a series of two or more sequential questionnaires. Ideas collected from the first questionnaire should then be used to construct the second questionnaire, and so on.
  4. After each questionnaire round, there is an evaluation phase. Here, the panelists are provided with the overall panel response and asked to re-evaluate their standpoint by the facilitator. If a consensus is not reached, another round of questioning occurs.

Strengths and weaknesses of the Delphi method

Strengths

  • Diversity of opinion – the Delphi method is an effective way to assemble a diverse range of experts and then aggregate their opinions. The anonymity afforded by the framework also encourages each expert to share their true feelings.
  • Versatility –  as noted earlier, the technique can be used to tackle a wide variety of issues, subjects, or situations. There is also no requirement that the experts meet in person.
  • Equality – the response of each expert is weighted equally. This democratic process ensures dominant personalities do not hijack the discussion or shift the prevailing opinion of the group.

Weaknesses

  • Lack of clarity – many practitioners struggle with the lack of clarity around what constitutes consensus. Since it is highly unlikely a panel will reach 100% agreement, the integrity of the method may be compromised if a cut-off level is not established beforehand.
  • Limited scope – the Delphi method is effective when the only way to generate insight is via expert opinion. In an evidence-based scenario such as healthcare intervention, the method may have limited use. 
  • Intensiveness – Delphi studies can be complex and time-consuming, particularly if a consensus is not reached early. Some experts may become disenfranchised and deliberately alter their views to conclude the process. Others may shift their stance during the evaluation phase to comply with the majority view. This phenomenon is called the bandwagon effect. 

Key takeaways:

  • The Delphi method is a survey-based framework for estimating the likelihood and outcome of future events. It was developed in response to military strategy formation during the Cold War.
  • The Delphi method has been adapted considerably since the 1960s. For best results, a facilitator must lead the panel through a series of iterative, reflective, and evaluative questionnaires until a consensus is reached.
  • The Delphi method encourages diversity and equality of opinion and has no locational constraints. However, it does not provide detailed guidance on group consensus and may be complex and time-consuming to complete.

Other connected business strategy frameworks

PESTEL Analysis

pestel-analysis
The PESTEL analysis is a framework that can help marketers assess whether macro-economic factors are affecting an organization. This is a critical step that helps organizations identify potential threats and weaknesses that can be used in other frameworks such as SWOT or to gain a broader and better understanding of the overall marketing environment.

STEEP Analysis

steep-analysis
The STEEP analysis is a tool used to map the external factors that impact an organization. STEEP stands for the five key areas on which the analysis focuses: socio-cultural, technological, economic, environmental/ecological, and political. Usually, the STEEP analysis is complementary or alternative to other methods such as SWOT or PESTEL analyses.

STEEPLE Analysis

steeple-analysis
The STEEPLE analysis is a variation of the STEEP analysis. Where the step analysis comprises socio-cultural, technological, economic, environmental/ecological, and political factors as the base of the analysis. The STEEPLE analysis adds other two factors such as Legal and Ethical.

Porter’s Five Forces

porter-five-forces
Porter’s Five Forces is a model that helps organizations to gain a better understanding of their industries and competition. Published for the first time by Professor Michael Porter in his book “Competitive Strategy” in the 1980s. The model breaks down industries and markets by analyzing them through five forces.

SWOT Analysis

swot-analysis
SWOT Analysis is a framework used for evaluating the business’s Strengths, Weaknesses, Opportunities, and Threats. It can aid in identifying the problematic areas of your business so that you can maximize your opportunities. It will also alert you to the challenges your organization might face in the future.

BCG Matrix

bcg-matrix
In the 1970s, Bruce D. Henderson, founder of the Boston Consulting Group, came up with The Product Portfolio (aka BCG Matrix, or Growth-share Matrix), which would look at a successful business product portfolio based on potential growth and market shares. It divided products into four main categories: cash cows, pets (dogs), question marks, and stars.

Balanced Scorecard

balanced-scorecard
First proposed by accounting academic Robert Kaplan, the balanced scorecard is a management system that allows an organization to focus on big-picture strategic goals. The four perspectives of the balanced scorecard include financial, customer, business process, and organizational capacity. From there, according to the balanced scorecard, it’s possible to have a holistic view of the business.

Blue Ocean Strategy

blue-ocean-strategy
A blue ocean is a strategy where the boundaries of existing markets are redefined, and new uncontested markets are created. At its core, there is value innovation, for which uncontested markets are created, where competition is made irrelevant. And the cost-value trade-off is broken. Thus, companies following a blue ocean strategy offer much more value at a lower cost for the end customers.

Scenario Planning

scenario-planning
Businesses use scenario planning to make assumptions on future events and how their respective business environments may change in response to those future events. Therefore, scenario planning identifies specific uncertainties – or different realities and how they might affect future business operations. Scenario planning attempts at better strategic decision making by avoiding two pitfalls: underprediction, and overprediction.

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Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"