How often are you surprised by a decision or shocked by the outcome of an agreement?
Unfortunately most companies around the world focus on business as usual, so are unprepared to cope when unusual situations occur. But there is a way you can prepare for the unexpected: scenario planning.
Scenario planning is a structured way of thinking about the future. Scenarios developed through the process describe a future situation and the course of events. The output can be used to prompt discussion around how things are currently done and to assess how prepared you are to respond to each possible scenario.
Take, for example, a hot topic in Europe right now – Brexit. How can any organisation even begin to comprehend the effect this will have onthem? Should a British company move its European headquarters out of the UK?Will trading between the UK and countries still in the EU have an added layer of complexity? Will staff still be able to relocate as easily between countries?
The answers to all of these questions are uncertain because relevant decisions are still being made. But should we wait until the politicians can answer our questions? No way!
The scenario planning approach involves gathering evidence available from past trends and reviewing it to logically extrapolate what might happen in the future. Of course there will be an element of guesswork, but we can use set criteria for each step.
For each potential outcome, you can then assess whether it is possible, plausible, probable and/or preferred. The outcomes you identify as plausible are the ones to focus on. You can make these the foundation for solid research into how you might deal with each situation.
The approach proposed by G Wright and G Cairns in their book Scenario Thinking: Practical Approaches to the Future, comprises eight stages:
Stage 1: Setting the Agenda –defining the issue and process, and setting the scenario timescale.
Stage 2: Determining the Driving Forces – working, first, individually, and then as a group.
Stage 3: Clustering the Driving Forces – group discussion to develop, test and name the clusters.
Stage 4: Defining the Cluster Outcomes – defining two extreme, but highly plausible – and hence, possible –outcomes for each of the clusters over the scenario timescale.
Stage 5: Impact/Uncertainty Matrix – determining the key scenario factors, A and B.
Stage 6: Framing the Scenarios –defining the extreme outcomes of the key factors, A1/A2 and B1/B2.
Stage 7: Scoping the Scenarios –building the set of broad descriptors for four scenarios.
Stage 8: Developing the Scenarios– working in sub-groups to develop scenario storylines, including key events, their chronological structure and the “who and why” of what happens.
Once you have gone through this process you can assess your current strategies against each scenario to assess their suitability, including their robustness, resilience and redundancy (their ability to adjust to cope with a range of eventualities).
This animation from BP is a great example of the power of scenario planning.
At Renoir we have a wealth of scenario planning experience, including developing and critiquing scenarios. We can walk you and your team through the process, helping you integrate it into the way you work. As well as helping your organisation take exceptional circumstances in its stride, this discipline will help you become more flexible and innovative, helping to ensure the future success of your business.