We live in a fast-changing world, with more external pressures than ever before, and many outside our control. If we didn’t know it before COVID-19, we definitely know it now. And a global pandemic is just one of the many disruptions we will face in the short, medium, and long term.
In a fast-changing world, it’s impossible to predict the future, especially beyond the short term. So you make a plan, but even as you’re doing it, you worry that it’s already out of date.
As boxer Mike Tyson said,
“Everybody has a plan until they get punched in the face.”
So do you just keep on making unrealistic plans, knowing something will come along to punch you in the face?
No! There’s a better way.
The things you don’t know WILL hurt you!
The pandemic – and other disruptions – affect us all in different ways, but the one thing that’s certain is we’re facing more uncertainty.
And uncertainty changes everything. Some people become paralysed by fear, others cross their fingers and hope for the best, and others march on with a false sense of security. But the best people, leaders, teams, and organisations roll up their sleeves and take action.
The solution is not to give up planning for the future. It’s about better understanding of the future, being more flexible with planning, and staying alert to change.
You don’t know exactly what the future holds (nobody does), so you aim for flexibility rather than accuracy. You imagine multiple futures, assess their plausibility, and keep your options open.
That’s where scenario planning comes in.
Scenario planning is a structured process to help build your foresight – that is, your ability to look at, over, and far beyond the horizon.
When you get this right, you’ll be significantly more productive because you and your team understand the risks and opportunities in the future, and you have created an organisation (and culture) that’s positioned to leverage those opportunities to stay ahead of the game.
The scenario planning process was first developed by Shell in the 1960s, when senior management realised many external factors could significantly affect the company’s strategic direction. So they created a ‘department of long-term studies’ (three people!) to explore and rank a series of alternative futures (scenarios), and present them to Shell management to feed into their strategic planning.
Now, more than 50 years later, the world is changing even faster, and we have to be even better prepared for future shocks and disruptions. We need scenario planning more than ever.