Scenario Planning - What's it all about?

How to plan and prepare, even when you’re not sure which way the world is going.

Scenario planning? What are you talking about?

I’m glad you asked. Scenario planning is a way of undertaking strategic thinking and planning with uncertainty baked-in. It allows you to plan and prepare even when you’re not entirely sure which way the world is going.

That sounds suspiciously like nonsense - how can you prepare when you don’t know what’s going to happen?

Good question. In essence it works by imagining a series of different possibilities of where your world could be, and then preparing a plan and start lining-up resources for each one. You then sit-back, look out for the early warning signs that one of the scenarios is becoming reality, and get on with the day job - obviously an exercise that could prove useful in current circumstances.

If you’re interested, it was initially a military strategic tool, but Shell adopted it in the 60’s and still use it to this day, and from there it’s been picked up by the business world.

On the one-hand that sounds great, it’s all a bit mental at the moment, but on the other hand that sounds like a lot of work. One lot of annual planning is enough...

Well, it’s not something you can do in a morning if that’s what you mean, but doing it properly doesn’t equate to just repeating an old process. You should look to include it in your annual planning process or in whatever planning timescales you’re operating to right now. It’s actually a very creative project to be involved in, as it hinges on telling great stories for each of the individual scenarios. And there’s obviously the end benefit of having a couple of plans in your back pocket ready for any eventuality.

OK, fair enough, it would be nice to have something ready the next time the world flips upside down, which at this rate could be next week. How do I do it?

As you’d probably guess, there are a hundred different scenario planning processes out there each with slightly different buzz-words and diagrams, but it usually boils down to four main stages once you’ve defined the goal of your own scenario planning process.

First, you and your team use research and evidence to come up with as many possible trends affecting your business and whatever goal you’d like scenario planning to help you with. The trick is to be deliberately divergent at this point.

Then, you filter this list down; remove the trends which are certain and the trends which just aren’t that important to you. You should be left with what are usually called ‘critical uncertainties’ - important trends that you can’t tell which way they’ll go.

Like whether or not this working from home thing will stick?

Exactly, you’re getting it. To a pretty big chunk of businesses that is a very important question right now, yet we’ve no idea if this lock-down will change our working habits forever or just be a blip. 

It’s best if you can boil down to a couple of these uncertainties so you can make a small list of the possible combinations of them. These are your scenarios.

Great, so then we switch into normal planning mode?

Hold your horses there friend, no, this is where it gets more interesting. Now you need to bring each of these scenarios to life. Tell stories about them, write fake newspaper headlines, imagine your personal life in each; whatever it takes to get a glimpse of the potential reality of each.

Stories? I don’t know about you mate, but I’m in marketing, I’ve got no time for stories.

Well, that’s a discussion for another day, but there is a real practical purpose to this. You’re aiming to get to a point where you can imagine each scenario as if it were happening now, that way you’re best prepared to plan for it. Back when they started doing this, Shell hired journalists and authors to help them fully flesh out each scenario as they knew they had to be believable to work.

You’ll also need to figure out what warning signs for each particular scenario becoming reality. That way once you’ve finished you can be confident getting back to the day-to-day knowing the alarms are set.

OK, I do all this work and I’ve got some nice stories, is that it?

Doesn’t seem like a bad place to finish, but no. The final step is then to create strategies and plans for each of the scenarios in turn, using whatever planning tools and tricks you’ve learnt over the years. The scenarios give you the added benefit of highlighting ‘no brainers’ - parts of the plan that appear in each scenario. If a particular course of action shows up in every response, don’t wait to implement it, it’s obviously relevant whatever the situation is, so get cracking.

Well… I am getting a bit bored of looking at dashboards. Can I just crack on by myself? I’ve made it this far with my own impeccable judgement.

If you like, but it’ll be a lot better with a diverse range of people involved. Try and get a broad team of people with a wide range of skills, diversity of opinion and intellectual curiosity.

Let me just stop you there, I don’t know if you remember me saying I work in marketing…

Believe it or not, I suspect people like this are all around you. People who have gone through creative processes like this often find that the right kind of people are within the business already, they’re just held back by cultural norms or, dare I say it, opinionated bosses. You’ll need to leave all that at the door to get the best from it. But it doesn’t hurt to get a facilitator in to help the process along...

You’re a cheeky sod you know? But fine, I’ll give it a go.

Good, and good luck. Done properly it won’t only set you up for the future, but it might just change the way your business thinks.

If you’d like to chat Scenario Planning or anything else, just get in touch, we’d love to hear from you.