The Power of Scenario Planning
“Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.” Sun Tzu
The insights company leaders gain by digging deep into the “whatifs” of our businesses are endless. Clear visions of where we are going do not always define the routes to getting there. And we know, especially now, there is not one or two ways. We may also choose our path only to get derailed.
Derailment does not make an appointment!
Covid-19 has delivered the unimaginable. How possibly could we have planned for something of this magnitude? I am really not sure anyone could have been fully or partially prepared for this level of impact on humanity, on our businesses, our countries and toll most important on human lives. Even though we had knowledge of pending pandemics and viruses of this nature, the effects on our current realities are simply devastating. Everyone, especially business leaders, are asking (searching) for what the world will look like going forward. We know it will be different for sure. Uncertainty can either stall us or motivate us forward. I choose the latter.
Reimaging the visions of our businesses, defining bigger missions and greater purposes is pulling at many of our heart and soul strings. Of course, it’s hard to make a difference in the world when revenue is declining, or you fear loss of business. It may feel counter but that is exactly the time to do scenario planning for the future. Even if you have done this in past, it’s time to relook at and rethink these scenarios. We now know the unthinkable and the unimaginable is always possible. So, plan for that but on the positive side.
4 Different ways our team conducts what we call “Opportunity Scenario Planning” (OSP):
- The “Got You There Shuffle”: Marshall Goldsmith writes, “What Got You Here Won’t Get You There.” Explore all that has made your business successful to this point. Maybe your success has been based on how the organization is structured, maybe you contribute great success great partners and suppliers, maybe success has been founded on the foundation of tactical daily actions daily and/or maybe success is based on your innovation output strategies. Be as detailed as possible. Now take them and shuffle the board. Looking at the world ahead, how would you leverage “what got you here” but change it or couple it with new strategies to drive you to the future. Are the products the same? Are their gaps in knowledge and experience on the team to get you to the future? What are the operational areas needing to transform? What does your team need to look like moving forward? What skills are missing? Many work staff do not have the skills needed to help us move businesses forward as noted in A guide to thriving in the post-COVID-19 workplace, @WorldEconomicForum.
Even before COVID-19, many workers around the globe lacked key skills – including digital capabilities. Upskilling in preparation for the changes to come post-COVID-19 should be a critical part of response and recovery.
There are four steps workers and businesses can take today to prepare for tomorrow: Accelerate the move to platform, transition to digital/virtual work, assess your skillset and expand it as needed, and plan for the future.
2. Imagine the Unimaginable (positive and negative): What’s your team’s ability to imagine? Unleash ideas, creative thinking, consider what might feel impossible. Encourage coloring “way” outside the lines. Skills needed today have shifted dramatically and nearly instantly. We need complex thinkers to imagine not only every possibility but the impossibilities. It’s in this spread to the unbelievable where you may find the new WOW of your business. Yes, we do need members on our team that are deep divers and you most likely have this skill in your company. They are deep subject matter experts. Is their view of the world one with blinders on? Depth is important for sure, but we also need greater insights into generalizations which allows for connecting more dots and uncovering bigger possibilities and also vulnerabilities. Documenting these ideas as thought out scenarios is important: detail each idea and visualize what success would look like. Imagination is your friend.
3. Anticipation Game – This game is encouraging teams to play the big whatif game. What if things get worse? What if our #1 and #2 best opportunity ideas face financial or market acceptance barriers? What if we get hacked, what if we succeed beyond our wildest expectation? What if our largest customers cancel contracts? What if our customers like our new ideas but they want to change the product features? What if what if what if…. This is one of the most important exercises a company can do, and it is the one exercise that time and time again are ignored especially when things are going great. Planning for the next what if right now is critical to building your lifeline. What if the economy takes 3 years or more to come back? How will the first to scenarios help you tackle global market recession should we fall into a deep recession? Now is the time to plan and then continue to revisit the anticipation game over and over. One of our client companies was rolling into more than 50% growth coming into covid-19. In December’s leadership team’s quarterly meeting, I suggested time for some anticipation planning (strongly urging as their business typically did not see dips regardless of economic impacts). Most of my focused whatifs were based on the impacts should the pandemic hit the US. This was hard for the client as again, they had 1. never done this type of scenario planning before and 2. they had a script in their heads that we’re always financially fine. None the less, the CEO agreed to continue with the line of planning. As March looked to batten us all down, I pulled out the plan and expanded it working with the leadership team. There was first shock that business was off by more than 60% because this never happened in their 50-year history. Then there was mobilization to one of the scenarios we had designed in our offsite back in December. It was a powerful and fast turnaround! The client completely pivoted strategies to our anticipation plan which included accelerating the digital strategies we were in process of implementing. The dip in revenue was short-lived! No one was furloughed. The entire organization was trained on all new processes, tools and automation while actually working their day to day without interruption. An amazing turn of events by simply anticipation planning months earlier.
Do you have a story to share? I’d love to hear it.
4. Celebrate Success/Celebrate Failure Scenario planning – Visualization and imagining what worked and what did not work (as though you implemented any or all of the above exercises 1,2 &3) is a powerful exercise. Break down as deeply as you can what success and failure might look like: break down the organizational failures, teams misses or mistakes, customers challenges, partner disconnects, the market dynamics, the product development efforts, ROI challenges, timeline issues, milestone misses or successes, pricing mishaps, marketing or organizational Faux Pas‘… or grand wins. Break it down for successes first then do the same but for the failures. This takes anticipation to a whole new level. Document what you would look for now along the way to know if you are on the path to success. How would you know? This exercise is all about insights into what is working and what may not be working. You see it before it hits and can plan for good and the bad.
What happens if there is another next pandemic outbreak in 2021? What would happen if the world does not recover from economically for 5 years… maybe these are gross exaggerations but who is to say? Would you not rather plan for the worst and ensure your BEST!