One of the most important exercise leaders need to do or do more in crisis is scenario planning in order to not get too narrow focused and ignore strategizing in uncertainty.
Today unpredictability rocketed to the sky, no one knows what the future holds in many aspects. In order to manage their own anxiety and get prepared for the future no matter whether it is around the corner or further down path, leaders must engage with their leadership teams in scenario planning more vigorously.
What is scenario planning?
Scenario planning is making assumptions on what the future is going to be and how your business environment will change through the course of events. It is identifying a specific set of uncertainties, various “realities” of what might happen in the future of your business.
How to do it?
Here are what you need to consider and some questions worth exploring:
1) Define the scope
- What are the timeframes for each scenario?
- What is the purpose of the scenario planning? (survive, sustainability, growth, opportunities, re-alignment etc.)
- Who are the key players need to be involved in the scenario planning?
- Who should be the facilitator of the scenario planning? (not involved in the context and reality of the organisation.)
2) Identify and analyse driving forces
- What are going to be the big shifts in economics, society, technology and politics in the future due to the current global crisis?
- How these forces impact your industry?
- How these forces influence the way of your doing business, reaching your customers etc.?
3) Identify critical uncertainties
- What are the uncertainties that are most impacting your business? Pick two or three from the above list.
- What are the most specific details of the selected uncertainties?
- What are the various layers? Here you can dramatize in order to get prepared.
4) Assess vulnerabilities and opportunities
- Where is your business most vulnerable based on the above data?
- What are the cost implications?
- How the dramatized details can be reframed and seen as opportunities, learning points, steps ahead?
5) Develop plausible scenarios
- How can you develop different stories for short-, medium-, and long-term based on the above data?
- What different chapters can you add to your stories based on the above data gathered in the above thinking process?
- What is the best, ‘just ok’, and worst scenarios?
- What story would you write if you are overly optimistic, and overly pessimistic?
- What are you missing from your stories?
6) Discuss implications and paths
- By now you have at least 4-5 scenarios being outlined.
- What are the various implications and impacts of each scenario?
- Start to reconsider your strategy going forward.
- Remember you have more choices, options, steps, sub-steps than what you incorporate into your strategy but you can always fall back on those ones that left out.
Please bear in mind there are more questions can be asked but I only picked the ones that you can start your conversation with.
Since scenario planning is quite subjective techniques due to the fact that you are building your scenarios on not only on data (from the past) but more on assumptions, predictions, gut feelings therefore, there are potentials pitfalls based on some biases you may face:
- Optimism, over-confidence – try to avoid to select the scenario that is deemed most likely happen and exclude all the others. Overly optimism can get you blind-sided and unprepared of the different layers of the crisis.
- Convenience bias – is about building your scenarios and making decision based on the data, information, knowledge from the past only, you need to let your intuition involved, think out of the box and have creating the future type of discussions.
- Social bias – it is not a one-off exercise and it is not a one-man show, you need groupthink and develop this muscle not only for your leadership team but for your organisation (key players) as well.
- Complexity bias or being paralyzed by multiple choices – although you do a throughout digging and have many possibilities but when it comes to strategy you need to keep it simple.
- One scenario bias – you don’t have to stick to one scenario and build your strategy around it, rather all the options and choices give you space for adaptability going forward. As today world require leaders to be more adaptable in leading their organisation including strategizing.