Conducting effective scenario planning discussions

Scenario planning is a great way to draw out perspectives of what could happen in your future, and how you might want to deal with it. It’s a great pre-cursor to strategy development. It’s important to remember that all of the scenarios are merely conceptual and not to get too locked into a single view.

What are some effective questions to generate discussion after everyone has familiarized themselves with the various scenarios:

– Ask what stood out for people – gut reactions / most surprising
– Talk about what they would like to see happen, and what they think is realistic
– What choices (strategy) would impact how it plays out and how much control do you have
– If you’re planning below the corporate level, eventually transition to more division-specific / most likely scenario specific – what options should you be pursuing to generate the greatest competitive advantage?

Scenario planning can be very effective at defining the context behind your strategic choices, something I believe is important to capture as part of every plan. The desired state becomes the choices about how you intend to compete and position yourself.

They’re not a silver bullet, but they are very useful in generating longer-term thinking in planning sessions. That is one of the most important factors of whether you end up with an operationally focused laundry list of projects, or a real strategy.

…like explaining strategy to a child

A really effective test of how well you understand something isn’t just whether you can explain its full complexity. It’s actually more difficult to explain a complex concept (while fully understanding it) in its simplest terms. Do you understand your strategy in a way that you could explain it to a child or teenager so that they would “get it?”

If you don’t, it’s worth your time to boil it down to the simplest elements, and occasionally use those when speaking with larger audiences so that people catch the important themes more so than the minutiae of the plan. The reality is that some of the communication constraints you’ll be up against with some audiences will require you to have this elemental version down cold, or you’ll risk speaking over their heads. (not because they lack intelligence, but because of constraints like time, or assuming they know other things which may only be in your head)

Explain your job/strategy to some children in your family. Explain it again in a way that they “get it.” Make a note of what you shifted. Now, apply those concepts to your communication with employees so you develop the ability to find the essential elements of what you need to say.

The pendulum

If you stay in any organization long enough, you know what “the pendulum” is. It’s the swing between various business model options (e.g. outsourcing vs. insourcing). In the moment these choices seem like great ideas, because the opposite model of what you currently have usually has an upside (as well as a down-side, which is why you chose it in the past).

When you see the pendulum starting to swing, as a planner, ask the right questions early in the process:
– Why is this change a priority right now?
– Are we choosing this change because of a change in the strategy?
– Are we pursuing generic business improvements without a connection to a market positioning objective?
– What is driving this?

If you can’t connect the priority to an advancement that will impact competitive advantage (aside from an obvious business model failing) then you may be chasing rabbits instead of investing your time in the most wise way possible.

No single discipline has it all covered

Strategy and research go hand in hand. It’s all part of the same process of sharpening your understanding of what is going on now (environmental acuity), predicting where it is leading, formulating insightful positioning objectives (competitive advantage), and then playing it out. A very critical part of this process is selecting the information your overall process is focusing on and making choices around. How do you know if the strategy choices you are making are leading toward a future state that is going to be relevant to a future market? The short answer is that there is no absolute way to know.

Some of the things that are happening in your environment will turn out to be of more consequence tomorrow than you realize today. Other things will be of much less. Leaders will be convinced that one risk is more important than another. So how do you know that you are tracking the issues that matter most? It would be much easier if someone would install flashing lights on the real problems or opportunities.

Therefore, avoid being married to the assumptions behind your strategies to the point where they aren’t periodically questioned. Holding any belief automatically means that you aren’t holding a contradictory belief but it’s worth the time to validate your core assumptions.

The secret may be in maturing the various management disciplines within your organization, rather than seeing one process (strategy, research, ERM, finance, reporting, etc…) as a silver bullet.