There are a lot of variables affecting the future at the moment, and at the same time, there is an overwhelming degree of uncertainty attached to each one of those variables.
Your business will be profoundly impacted by (1) how those variables interact with each other; and (2) play out into the future. The number of ways that this could happen - are understandable exponentially numerous.
Scenario planning is therefore useful in times such as these, because it offers you, and your business, a number of plausible futures for which you can mentally and operationally prepare.
Memories of the future
In futurist terms, scenario planning offers your organisation a useful 'memory of the future' into which you can collectively project your thinking and strategic thinking.
Prediction of just one future is frankly pointless, and to be honest, could be very dangerous for the survival of your organisation, because it commits you to just one future option and leaves your planning wide-open to other futures potentially playing out - for which you have no response.
What is scenario planning?
Scenario planning is a process in which you build knowledge about the future.
It is a tool best used to explore futures when how the future might unfold is highly uncertain. It is used for planning purposes where more clarity as to how you might respond under various future states is useful; and offers companies a more robust method of navigating their way out of a problematic time.
Scenario planning is usually conducted with the input of a group of participants - so it is participatory and works best with input from a wide diversity of perspectives. It usually requires a professional facilitator to steer and guide the group through the process if you are to produce a quality set of alternatives.
As a futures method it is both logical and analytical, as well as creative and imaginative. Great scenario planning work produces rich stories that connect with people on an emotional level, and inspire groups into action spontaneously almost, rather than delivering a sterile directive for people to mindlessly follow.
One of the earliest and best known corporate users of scenario planning in times of uncertainty is Royal Dutch Shell. In the 1970s Shell pioneered the use of scenario planning to navigate the company through the global oil crisis at the time - helping their management team explore and understand how the world's energy needs and demands might play out into the future was largely credited for saving the company from the disaster which afflicted all of their competitors at the time.
What kind of variables are at play that make scenario planning so important right now?
Every business will be facing different forces of change or factors of impact that they needs to carefully consider, but most organisations will need to be taking into account things like:
How long will the country-wide lockdown actually last for? | What will the lived experience of the post-covid South Africa be like for the next 12 months? | Will there be a 2nd lockdown later in the year? | What will demand for our product be like for the next 12 months? | Which of our key suppliers will go out of business because of the lockdown? | Which of our competitors might go out of business due to the lockdown and what does that mean for us? | How will consumer sentiment change after this pandemic? | etc etc etc.
This list is by no means comprehensive, but hopefully gives you a sense of the kinds of questions scenario planning aims to give guidance on.
Before this pandemic and the resulting lockdown there was a lot of focus on the idea of making your business future-fit.
Being future-fit has now become a question of survival and developing a higher degree of resilience in these volatile times. One of the best ways to do that is to be prepared - both mentally and operationally - for multiple paths into the future from here. It's not about predicting what's going to happen to you, but rather to have some kind of mental preparedness as to what you might do as an organisation if such-and-such were to happen.
The exercise will not only be a valuable planning tool, but will also reduce the amount of anxiety you and your team will be feeling right now by facing and engaging with the uncertainty in a positive way.
If you need a trained facilitator to help you with your scenario planning, or could use some additional innovation facilitation, coaching and brainstorming then get in touch.
Related: The future of South Africa after the covid-19 lockdown - Cherryflava