Scenario Planning: Crystal Balling or Smart Business?
Is trying to make projections for the future – which is not the next year, but three to five years out – too risky? Might this be perceived as “crystal balling” and not worth the time and effort, or might it be something that makes perfect business sense?
Worked Last Year
The default for most business planning is to dust off last year’s plans and repackage them in the hope that they are still contextually valid.
This leaves planners scrambling when a major event unfolds that hadn’t been considered.
A change in government priorities or an unexpected alteration in client expectations – and the interaction between these two - could potentially have fundamental and far reaching consequences. This is why, in my opinion, it is worthwhile to include scenario planning as part of the strategic planning process, particularly where an organization has no easy answers about its future and is faced with uncertainty.
The Smart Way
I recently had the experience of leading a branch of a federal government department through such a process.
The concept of using scenario planning, as part of strategic planning, to uncover possible futures that might unfold was foreign to them; no one had been through such a process before.
The outcome that convinced them to carry the process through to its conclusion? They would be in a position whereby they could adjust their business plans without too much trouble, regardless of which scenario emerged.
So, we spent 2 ½ days discussing challenges to the organization - the trends and uncertainties that shape their business environment - and developed three plausible scenarios for the future.
This allowed perspectives on core competencies and key success factors to develop, and from there ideas were derived on how the organization should be structured, staffed, and equipped to support the required business processes. Ultimately, the strategy for moving the organization forward emerged.
A Happy Ending
Delegates to the strategic planning session left confident that the process made sense to them.
And, because they had developed a better understanding of the likely future, they could make their organization work no matter what happened.
If you had a similar experience you would like to share, or comments about how this could have been handled differently, I would like to hear from you.