Instituting A Scenario Planning Process, continued
Detailed Instructions For Conducting Scenario Planning Activities:
Step One: The first step is to contract for purpose. Identify what you want to accomplish. Then communicate those goals/outcomes to the key people in your company, your key thought partners Discuss your ideas with them and modify your goals based on their input, if appropriate.
Here are some recommended goals:
- To understand what would happen to your business idea/assumptions if those key assumptions were affected by the emergence of certain critical developments in the future.
- To develop plans for spotting those developments as they begin to emerge.
- To develop the coordinated thinking skills within a broad group of your key people and best thinkers.
- To create stories that your people could use to understand and communicate about the conditions that could affect your business and what to do about them if they do develop.
- Other goals specific to your business and its ecosystem.
Step Two: Once you’ve set your goals, you have to take readings of the key uncertainties in your business environment. To do this you should hold a meeting with your key thinkers to identify which key factors to watch.
Step Three: Once you’ve identified the key developments to keep an eye on, you have to develop a strategy for gathering that intelligence. Can you have more than one team or do you only have enough people to create one group to gather the intelligence? The more teams, the better. If you have more than one team, have them each pick a dimension to observe/research. Pepper good thinkers across each group, include people with varying experience and skill levels, and have a strong leader on each team.
Identify the sources your teams will access to gather data and information (have the teams generate ideas for this step as well). Some possibilities include statistics and information from government sources, projections from trade associations, market trends from various industry-tracking sources, forecasts from US Bureau of Vital Statistics, local/regional business schools, Chambers of Commerce, the Economic Development Offices of local or state governments, to name a few. Don’t forget to contact key customers, suppliers and allies about trends they’re facing and watching.
Have each team report progress to you periodically. Your role as leader is to orchestrate and coordinate their efforts, and to spot connections between the groups or spot omissions that they might miss.
Step Four: Conduct the research within a set of time and monetary constraints. Your teams implement your strategy for gathering that intelligence---contact identified sources and gather the information.
Test your basic assumptions: as the research is being gathered, are you discovering that your assumptions are being born out by what you are finding?
Step Five: The teams develop reports summarizing their findings and drawing conclusions. They should discuss what’s happening in your industry, their analysis of the trends, and state conclusions.
Step Six: Develop scenarios. Using your strongest thinkers and best writers, and using the report summaries, develop scenarios---in other words, write stories describing what could happen, identify markers/signs that would indicate the different possible events are occurring, and what should be done under those circumstances, either to take advantage of opportunities, or minimize negative affects. Three or four scenarios are plenty for any organization to keep track of. (You want to limit the number of people involved in this step, or it will drag out forever.)
Step Seven: Develop contingency plans. Lead a broad organizational effort to assess your company against these scenarios and to develop the appropriate contingency plans. The broader the group in this stage, the better prepared your organization will be to read the signs and enact the plans when appropriate. It will also support better thinking/understanding about the business idea and its core assumptions. Include your best thinkers regardless of their positions, your management team, your board if appropriate, and key advisors. All can play a helpful role.
Your contingency plans should:
- Identify key threats and opportunities inherent in the chosen scenarios
- Ideas for leveraging the business idea, brand promises, and capabilities in order to thrive in the new environment. Do not forget to consider the impact of these developments on your customers as well as on your company.
- Spot the key deficiencies you would have in this “new reality” and prioritize the changes and additions you’ll have to make.
- Look at the resources and readiness of your company to cope with developments.
- What should we do that’s not something we currently do?
- What should we stop doing?
- What should we do more of?
Step Eight:Report the results of these efforts to the whole company. Make presentations to your whole company that summarize your findings and plans.
Again, involving as many of your people as appropriate in this dissemination process is very beneficial---their skills and confidence will be developed, they will gain a more thorough understanding of your business plans and operations, they will become even more prepared to identify significant indicators of an emerging scenario, and they will develop strong feelings of identity with and ownership of your goals.
Help them rehearse; let them run their presentations by you before delivering them to the larger audience. Help them fine-tune their presentations. Present the information – stories – to the company.
Refer to these scenarios often during the course of your on-going business conversations and the performance feedback process throughout the year.