Can you Predict the Future?
Many people think that Scenario Planning is about predicting what will happen in the future and taking steps to either take advantage of it or limit the impact. The reality could not be further from this perception.
Scenario Planning is about thinking about what could happen in both the internal and external environment and considering how the business 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 means that management are better able to deal with real opportunities and threats to the business when the arise.
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 conducting a SWOT and PEST analysis with key people in the business. The results of these 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.
As discussed, it is highly unlikely (although not impossible) for any of the identified scenarios to occur but by considering them we not only prepare for the possibility of something happening that will affect the business but also identify potential issues that need to be dealt with now.
A prime example of this is the way that COVID-19 has resulted in many people working from home. While it is highly unlikely that anyone would have predicted a global pandemic effacing their business and society at large, they may have come up with some scenarios that could have identified a deficiency in their ability have people working from home. This could then have resulted in introducing the required technology, processes and procedures to enable people to work from home. The net result would have been that they would be well placed to handle the issues caused by COVID-19.
If you do not include Scenario Planning as part of your strategy creation process then perhaps it is time to consider it.