Basically, scenario planning provides organizations with a kind of radar for anticipating what could happen, much as a pilot uses radar to detect something on the horizon that may affect the flight plan. The radar metaphor is the key to understanding the benefits of scenario planning.
After 9/11, we can be reasonably confident that our police and fire departments have put in place or refined emergency response plans for all sorts of calamities, terrorist and otherwise. That’s the business they’re in. Hindsight is one of the bitter results of terrorism. But I wonder about other types of organizations, business organizations. Are they prepared for what could happen? Are there systems in place to mitigate threat and liability? So far, Canada, for instance, has been spared terrorist strikes, but to pretend that Canada is safe from threat is wishful thinking. Those days are over.
Scenario Planning is a business process that involves both intellect and intuition. It’s a giant leap past the more conventional strategic planning into the unknown. It’s a process that uses whole-brain thinking to arrive at multiple, plausible, possibilities. Basically, scenario planning provides organizations with a kind of radar for anticipating what could happen, much as a pilot uses radar to detect something on the horizon that may affect the flight plan. The radar metaphor is the key to understanding the benefits of scenario planning.
In addition to anticipating possibilities, scenario planning frames organizational learning. Learning, and learning quickly, are essential requirements for organizations that want to react quickly and effectively to any kind of threat. People within an organization who understand scenario planning are able to share and discuss common mental models, or maps, that afford them some degree of predictability in uncertain situations. Maps, if they relate to the actual territory they symbolize can be powerful tools to explore what might happen.
The benefits of scenario planning even before 9/11 are clear enough when you examine the record. Successful companies like Shell Oil have used this process to survive and prosper in uncertain times of accelerated change. Times like ours. Having a slight advantage in lead-time or reaction time can ensure survival and success. Shell Oil used scenario planning to anticipate the possible effects of the oil crisis in the 1970’s, and thereby avert their exposure to forces outside of their control. Today, companies can use scenario planning to offset potential disasters. Imagine a world where fast food outlets like McDonald’s and KFC are targets for terrorists. What was unimaginable just a few short years ago is reality today, as the London terrorist bombings prove.
Imagine being able to anticipate the future. It may be a broad societal trend or a new political configuration or a terrorist threat that will change the way your business is done. Scenario planning enables you to anticipate the future, and most importantly, to develop an action plan to meet it.
But now let’s review how the scenario planning process begins - with a view to seeing how it might work within any organization, perhaps even your own. The process begins with a skilled facilitator conducting an in-depth analysis of the current state of the organization through interviews, or through something called a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis, or a combination of both. The information gathered is then organized into common themes or clusters of themes. These themes are the real issues and potential dangers that impact on the organization. Through the examination of these issues and their subsequent refinement, managers and employees can eventually project areas of common concern into an uncertain future and then make the kinds of decisions that enable them to reach their projected business goals or to avoid tragedy. They become the scenario planning maps of the organization.
In the final analysis, it’s a combination of innovative thinking and continuous learning that will make the difference between a company that merely survives and one that thrives. But scenario thinking cranks things up a notch. It provides a slight but consequential edge for an organization. That edge is a qualitative difference, like the difference that Mark Twain meant when he spoke of the difference between lightning and a lightning bug.
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Frank Buchar is management consultant and trainer living in Hamilton, Canada specializing in Organizational Change and Management Development. He can be reached at 905-529-0257 or by e-mail: frankbuchar@hotmail.com.
