Scenario Planning: A Tool for the Times

by

As we all make our best efforts, both personally and professionally, to move forward – despite the challenges we are facing with the pandemic and the economy – I’ve found myself thinking more and more about the value of scenario planning. I know it is tempting to just freeze in place and to “wait and see” how things pan out before taking on anything strategic. The changes that are underway feel so significant and the ambiguity of what’s ahead makes it hard to know what actions to take. But, scenario planning can help bring strategic foresight to the never-ending uncertainty. That makes it one of the most important and pragmatic things you can do to help prepare your business for the unknown odyssey that this pandemic is taking us on.

We used scenario planning at Thought Ensemble over the last few weeks and it was a very helpful perspective to bring into our quarterly strategic planning. It helped us open up our minds to what’s potentially ahead of us and get clear on what we need to take on next. While we still don’t know what the pandemic and associated economic challenges mean for us long term, we are clearer and more confident about what actions we can be taking in the next couple of months. I’ll publish another blog about our experience using scenario planning at Thought Ensemble soon, but in the meantime, let’s go over the basics.

A Very Brief Overview of Scenario Planning

I’m not going to dive super deep into the history or “how-to” of scenario planning, but if that is something you are interested in here is a Wikipedia article that outlines the basics and here is an HBR article that goes even deeper into the history.

Scenario Planning was popularized by Shell in the 1960s as a way to preemptively develop business strategies that could address uncertain futures. It has been used effectively across many businesses, so there are countless variations on exactly how to do it.

In my opinion, it is a more helpful practice once your basic business needs are under control. With COVID-19, many businesses are fighting just to stay afloat and having to make extremely difficult decisions to do so. There are better tools for addressing those types of situations, but for those who are fortunate enough to not be completely consumed by firefighting, scenario planning is a great way to get more strategic.

Scenario Planning Step by Step

If you search the web for “scenario planning” you’ll find a lot of different ideas on how exactly to do it, but below is a very quick overview of the process that we have found works well for us:

  1. Start by listing all the future uncertainties that could impact your business
  2. Pick the top two uncertainties that, when combined, are most likely to cause the greatest disruption to your business – For example, how severe the pandemic will be and how heavily the economy will be impacted
  3. Plot the extremes of those two uncertainties on a 2×2 matrix
  4. Describe each of the quadrants as a plausible future scenario using a few sentences or bullet points
  5. Create an easy to reference name for each scenario

At this point, your scenarios are drafted. Now you can use them for strategic planning by considering:

  • How each scenario impacts your customers and other external stakeholders
  • How you could shine in each scenario
  • What strategic actions you might want to take in each scenario

Scenario planning is not intended to be a decision tree, where you develop a plan for each scenario and then pull it out and use it like a playbook once that scenario happens. The actual future is unpredictable and will likely involve a combination of elements from a variety of the scenarios you develop. The purpose of scenario planning is to help open your mind to these possibilities and to inform strategic planning based on that.

Some Additional Thoughts and Resources

If you think all this sounds interesting and want to read more, I have a few resources here that might be helpful.

First, one of my friends sent me this link from Kantar about a month ago with the tag, “This is right up your alley.” Sure enough, I devoured it. It was perfect timing – we were just starting to think about doing a scenario planning exercise for Thought Ensemble. I knew I wanted to use a framework like this but hadn’t seen scenarios specific to COVID-19 yet that I liked. I like these a lot with the caveat that they really have three dimensions in here (versus the typical two), and neither of their two approaches aligned quite right with our business because Kantar has a People (consumer) point of view, as well as an Institutional point of view. But, for B2C companies, the People angle is very interesting.

Second, Deloitte and Salesforce also just published a collaborative effort they did on scenario planning. Their dimensions were a little different – they looked at severity of the pandemic versus collaboration within, and between, countries. They also didn’t use a pure 2×2 view, but the outcome is similar.

Third, if you agree with the importance of running through your own scenario planning session, but find yourself getting flustered at the idea of trying to wrangle and manage all the necessary people and resources virtually, then check out my colleague Cassandra Rambo’s blog: 3 Reasons Why You Should Host a Virtual Workshop. In it, Cassandra walks through the benefits of holding these types of sessions virtually and how to capitalize on them. You might be as surprised as we were to find out just how effective virtual workshops can be.

As you can probably tell, I absolutely love this topic. So, if you have any questions, thoughts, or just need a resource to bounce ideas off of, feel free to reach out as I love to talk scenario planning!

READ MORE

The Leadership Dog Years

The Leadership Dog Years

As a business leader, I feel like I’ve been living in dog years — so much has happened that this year feels more like seven. In the spring, our company — like many others — had to throw out our annual plans and quickly pivot to new ones. In the summer, we increased...

read more
Shifting Perspectives: 3 Learnings From a 3-Day Training

Shifting Perspectives: 3 Learnings From a 3-Day Training

About a week ago, I completed the second live (virtual) training in the process of becoming a Certified Professional Coach through iPEC. Once again, my mind was blown! It reinforced for me that virtual workshops can, and do, work, and, in a lot of ways, I prefer them...

read more
Finding My Work-Life Balance

Finding My Work-Life Balance

In my previous post, I told the story of how I got back into consulting after becoming a mom. All of the diverse experiences I had during that journey have helped me to find my work-life balance by… Defining Boundaries “Go home,” my first boss said 12 years back —...

read more
How I Got Back to Work After Being a Full-Time Mom

How I Got Back to Work After Being a Full-Time Mom

I Landed My Dream Job Throwback to 2014, I had completed my MBA, landed my dream job as a consultant, and was hoping that my new consulting career would exponentially ramp up my career growth for the next 5 years. This would position me to take on critical decision...

read more
Self-Awareness is Key to Belonging

Self-Awareness is Key to Belonging

In August of this year, as part of our annual company meeting, our team at Thought Ensemble participated in the foundational session of Diversity, Equity, and Inclusion (DEI) training led by Dr. Nika White, IOM, CDE (she/her/hers). One of the most meaningful moments...

read more
Finding Your Organization’s Magic Pixie Dust

Finding Your Organization’s Magic Pixie Dust

It is often said that organizational culture is like a fog — it is all around us; it impacts our ability to see, to move quickly, and to deliver; but we cannot quite put our finger on it. Indeed, some organizations see their culture as a byproduct of operations,...

read more
We’ve Refreshed Our Brand!

We’ve Refreshed Our Brand!

Why have we refreshed our brand, you ask? Well, as we have grown and matured as an organization, we felt that our previous brand elements no longer represented us as well as they could. You see, we founded Thought Ensemble back in 2008 to help companies better compete...

read more
Thought Ensemble’s Purpose — Inspired in 2020

Thought Ensemble’s Purpose — Inspired in 2020

I recently wrote about how company purpose is being tested and inspired by all the events of 2020. This topic is very real for us at Thought Ensemble. We’ve been thinking a lot about what really matters as we’ve navigated the challenges of this year. While we’ve had...

read more