Scenario Planning in an Uncertain World

Scenario Planning is about thinking about what may happen in both the internal and external environment that would have a significant impact on the business and considering how it would deal with them.
The intention is not to predict the future but to raise awareness of the fact that there is the potential for both disruption and opportunities arising for the business.
Research has shown that going through the process of thinking about different scenarios and how the business might handle them makes management better able to deal with real opportunities and threats to the business when the arise.

Advantages of Scenario Planning

It is unlikely for any of the scenarios that you create to occur.  So what is the point of Scenario Planning?
There are two main advantages of including scenario planning as part of your strategy development.

The Scenario Planning process involves the management team exploring various scenarios and understanding how they might react to them. This will open their minds to the fact that opportunities and threats could arise in the business.  In doing so, they will be better prepared to deal with unexpected events when they occur.  This is because they will have mentally gone through the process of dealing with the unexpected. In addition, people will generally be more aware of the potential for unexpected events and will, therefore, be more likely to spot them earlier than they would otherwise.

The process of considering various scenarios includes generating ideas to deal with them.  This can identify ideas that should be acted upon and issues that need to be dealt with, irrespective of the scenario. These could be changes to existing processes/procedures, the introduction of new systems, new technology, etc.  Once the various ideas and options have been reviewed and prioritised they should be built into the business plan by creating projects and activities to implement the ideas and deal with the issues raised in the scenario planning process.

Our Scenario Planning Process

Our process ensures that the various scenarios are linked to the strategic plan so that the we can identify those that have the greatest potential impact on the goals and vision of the organisation.   We achieve this by working with your management team to explore possible scenarios that may occur that could affect your business either positively or negatively.  We use various tools and techniques to inform this process, including SWOT and PEST analyses. The results of these and other analyses are linked both to each other and to the strategic goals which allows us to identify those with the most potential impact.

In addition, we have the people involved rank them in terms of the likelihood of the scenario happening and the impact that it would have on the business.  Those that have the highest impact and are most likely to occur will be reviewed to come up with a plan of how the business would deal with each situation if it occurred.

If you do not include Scenario Planning as part of your strategy creation process then perhaps it is time to consider it.

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