Before you decide on scenario planning
Scenario Workshop Expectations. You’ve made a decision to develop a scenario plan. That’s a big step for a strategic planning program. But it is only a first step. Deciding to integrate scenario planning into your strategic work means you’ve also decided that many of the factors influencing your future are beyond your control. That is not an observation without consequences. Many organizations have a hard time admitting there are ideas, regulations, natural events, and other concepts that are important to their organization, but no matter how much they research them, they will never be able to predict or control the outcomes.
Sometimes futurists do get parts of the future right. But even the best extrapolations of the present will miss major events, and they won’t get all the details right. Most beliefs about the future find their flaws exposed over time. Scenario planning isn’t about predicting the future. Scenario planning focuses on developing a sustained ability to imagine a range of possible outcomes based on the possible values for important uncertainties.
Scenario planning unleashes organizational that allow leaders to explore a range of possibilities that can help organizations become more agile and adopt contingencies for a variety of outcomes. Scenario planning focuses on continually paying attention to the important uncertainties, and the driving factors, that will shape the future of an industry, country or the world in general.
Scenario Workshop Expectations: We’re creating a scenario plan?
Organizations that begin a scenario planning journey should assess their broader strategic planning investment beforehand. See this post for a list of strategic planning assessment questions. Not answering all the questions in the affirmative doesn’t mean the organization should avoid scenario planning, but it does mean that scenario planning should not be the only investment.
Are You Ready for Strategic Planning? Read this post to see which questions you should be asking your organization.
Scenario planning needs to a become tool, not just a one-off experience. If scenario planning workshops do not focus on an outcome, they influence little and end up as a poor experience for those involved. Participants need to be able to connect scenarios to their work in an ongoing way.
The assessment is designed to ask organizations to think about themselves through the lens of good strategic planning practice and expose areas where they can improve, or where they may be able to fill a gap.
Scenario planning may be one of the gaps that needs to be filled. If foresight, anticipation, agility, and innovation top the list of strategic needs, then scenario planning probably need to be included as an investment area.
Communicating the relationship between scenario planning and other plans
Many people, in many parts of an organization, develop plans. If scenario planning is new to your organization, it is important to communicate how scenario planning relates to those plans, most importantly, to strategic planning.
Scenario planning isn’t really a plan. It is a way to use scenarios to help inform other plans. The outcome of scenario planning is a strategic context that informs the strategic plan. Augmenting a product plan by employing scenario planning creates a more resilient product plan. Scenario planning will help everyone developing a plan to introduce a skeptical, scientific approach to challenging assumptions and unleashing innovation.
Scenario Workshop Expectations: Your planning lifestyle
As noted above, humans plan for the long term. But they do not necessarily plan for the long-term well. The propensity to believe in a certain future creates comfort, or it provides a sense of control. The shorter the horizon, the less of an issue uncertainty presents. Thinking ten or twenty years out requires a kind of release, a letting go of control, and running headlong into discomfort.
Many of the uncertainties faced in scenario planning will end up with values in plausible futures that create discomfort for participants. “I can’t imagine that ever happening.” But someone on the team did imagine it.
Scenario planning is not about prediction, but about agility. Coming out of scenario planning organizations should be more open to seeing outside factors beyond their control that will influence plans. Even near-term plans.
It is almost impossible for someone to go through a scenario planning process and come out the other end with the same confidence, even hubris, about knowing for certain what will happen in the future. Scenario planning sows healthy second-guessing.
The shift in mindset from the confidence of knowing to the questioning of assumptions most importantly affects people who relish detail and control. Scenario planning facilitators need to pay special attention to those participants who fall into this category in order to bring them along in the process.
The dislodging of pre-existing mental models not only helps participants question assumptions, but it also offers new openings to see the world, the business, and even near-term projects in a new way. Each future, with its various logics, creates a canvas for exploring possibilities. More possibilities leads to an increase in the potential for innovation.
Scenario planning isn’t always about the unthinkable. The best scenario work helps people perceive the world in a way that reveals new prospects in everyday experiences.
For those who focus on details, scenario planning can be an uncomfortable ride. But your insights are crucial to success because questioning assumptions sits at the core of the process. All types of mental models converge to develop scenarios. Those who strive to control in the detail have as much of an issue with the process as dreamers who are asked at the end of the process to make choices and to create plans based on the learning. During workshops, we seek to balance the need for analytics with the need for exuberant speculation in order to land with actionable business insights.
Your planning lifestyle matters to you and it matters to the process. Scenarios are about co-creation and participants will find themselves changed by the experience as much as they influence the outcome.
Nurturing continuous learning
Scenario planning isn’t another event that takes place with results posted and people moving back into their day-to-day mindset after the workshop. Scenario planning changes organizations and it changes the people who work for them. Because scenario planning asserts that factors exist beyond the control of any organization, it requires that the people who are planning for the future acknowledge those factors and take them into account. Scenario planning encourages people to think more strategically by creating a context to challenge assumptions.
Thinking strategically means practicing intellectual curiosity. It means looking for hints at changes in direction of the uncertainties in which you find your organization and your industry immersed. It means looking for weak signals. It means paying attention to the world around you in new ways.
Getting ready to conceive a scenario plan
The most important act in conceiving a scenario plan is a commitment to the endeavor. I don’t mean a rigid, unswerving acceptance to a timeline, or an unquestioning adherence to a particular methodology. I mean a willingness to commit the time necessary to actively and effectively engage in the process your organization has chosen to undertake.
Individuals should plan to come prepared with an understanding of candidate uncertainties, familiarity with the general concepts behind scenario planning, and with any pre-reading assigned completed. Depending on the engagement, Serious Insights likely conducted an overview training class on scenario planning as a concept.
The following offers the description of a typical scenario planning workshop series with scenarios primarily developed prior to the workshop.
The first workshop
This first workshop is about acclimation. You get to know the process. You get to know the people involved in the process. You get to know the research. Unlike some management techniques where a few minutes of acclimation will provide you with enough orientation to start skill-building, scenario planning involves not just the accumulation of new skills and perspectives, but a letting-go of sometimes unarticulated, but often deeply held beliefs.
During the first day of a two-day workshop, you will likely be introduced to the following elements:
- Research about critical factors facing your industry, and how those factors may influence your industry in the future.
- Uncertainties gathered from internal interviews, workshops, and other research, that will affect your industry, and the extreme ways those uncertainties may develop over time.
- An over of the scenarios that emerge from the process of discussion, voting, and scenario examination.
Once the scenarios have been presented, immediately start engaging with them. One of the best ways to do that is to create a persona for a person who lives and works in the scenarios. Personas typically represent a key role in the future being imagined: students or teachers in the future of education, consumers in the future of retail, workers in the future of work or an exploration of future information technology infrastructure.
The First Day may extend into some basic understanding of the implications of the scenarios so people have something to think about as they encounter one another during the evening. People need something to sleep on that can be picked up the next morning. Discovering implications is a good transition exercise.
It is important that people leave the first workshop with a basic understanding of the scenarios. The story and the logics used in the scenarios act as constraints, as well as gates, when brainstorming the implications and creating action plans or exploring innovations. If people don’t find a way to “live” in the scenarios, then future work will be in jeopardy. That is why the First Day is dedicated to understanding and connecting with the scenarios.
What you may be feeling after the first workshop
At the end of the First Workshop, people may feel challenged. Some of their beliefs about how they work, how the world works, and how they think about work and the world, have been called into question. On top of that, they have been given a huge amount of information about what is known and not known about their industry. And they’ve been introduced to an unfamiliar process. That’s a lot to process. It is important to acknowledge this. Let people discuss how they feel, give them a good sense of what will happen the next day to leverage all of the new information they’ve absorbed, and the new skills they’ve acquired.
The second workshop
The second workshop focuses on the implications of the scenarios, as well as on action planning.
As soon as people arrive, they should be given an opportunity to ask any questions that came up in the overnight hours. And then back to implications.
It is important to remember that implications are observations, not actions. A future that is highly networked, one in which people communicate primarily through technology, may imply a just-in-time learning model. That same future may also imply alternative currencies when its logic is applied to the future of retail or banking. Those are observational statements made through the lens of the focal question.
Implications become the context for action. If this future implies Y, then we must do X. You are now fully entrenched in the logic of the futures. You have not only developed an affinity for their stories and the people who populate them but understood them at a sufficient level of detail to recognize how the context of the scenarios might affect the people, infrastructure, institutions, and policies of the world. Understanding that, you are now free to decide what those implications mean to your organizations. Organizations can now start making strategic choices within the scenario framework.
Making choices in fictional places is safe. It may prove insightful and even inspiring, but it isn’t that useful unless you believe one of those futures is THE future. In most cases, scenarios are not predictions but mental exercises, which leads to the next step: creating a consensus future set of actions contingent on the various futures. As a mental exercise, this activity constitutes practice for the foresight mental muscle.
Ideas generated along the axes tend to overlap in some respects. Actions, for instance, suggested in the top part of the scenario matrix may have commonalities, as do those along the bottom. The same is true for the left and right of the matrix. This creates a set of ideas, actions or decision choices that may prove robust, meaning that they appear in more than one quadrant. If they appear in three or more, they may be so robust that they suggest, perhaps demand, immediate action—leading participants to ask: “If we can’t imagine a future where this doesn’t make sense, then why aren’t we already doing it?” They can then explore constraints and other actions that would create greater degrees of freedom, leading to “permission” to implement the idea (which will likely take place outside of the scenario planning workshop).
Late in the second workshop, people start consolidating information, discovering patterns, and considering what they will do after the session ends: how they will take the outcomes of the plan back and integrate them with their strategic and tactical plans.
What you may be feeling after the second workshop
At the end of the second workshop, you should feel a sense of accomplishment. You have now used the scenarios to recommend concrete actions. The scenarios have helped you be more open to possibilities, more creative, and more strategic. You have imagined things over the last two days that you might not have imagined had you not participated in this workshop.
You may also feel overwhelmed because going through a scenario process creates more data in an already data-rich world. The observations, implications, and recommended actions may not yet have a home your strategic framework. What you see ahead of you is not just the new world of work, but new work. This workshop is the beginning of a journey, not a destination. So take a deep breath and get a good night’s sleep, and then read the next section.
Exercising the future
It has been speculated recently that planning for the deep future may be more of a distinguishing characteristic for humans than the development of physical tools. Many animals, from chimpanzees to crows are now known to transform natural objects into tools. Some are known to plan ahead, albeit slightly. Only humans can imagine a world of the distant future—and only humans can make plans to transform not only natural objects, but the world, its culture, and its technologies, into the future they envision.
Creating the future, however, is not an easy task. And the future you reach may be very different than the one you planned for.
For most people, the future is rather abstract. It lacks details. For businesses, futures need to be detailed in such a way that people cannot only make plans for an entire operation, but they can also plan for disruptions, challenges, and discontinuities that are subtle, perhaps profound.
During our day-to-day work, we rarely give ourselves time to speculate about all of the factors involved in the future. Because we see ourselves as highly educated or experienced professionals, we find it difficult to admit there are things we don’t know. So we tend to ignore those things, or in the best of circumstances, assign them values that may be well-intended and well researched, but likely very wrong when reflected upon in the future.
Scenario planning attempts to create a transparent and open process. It allows entire organizations to put a name on what they don’t know, and explore a range of ways that uncertainty, and relationships between uncertainties, will play out in the future.
In this way, people exercise the future. And they also exercise their ability to imagine more than one possible outcome. Perhaps most importantly, they get to practice saying that they don’t know something in front of their peers and their management team. And they get to use a robust process to explore what they don’t know.
Like any muscle, the muscle of imagination can atrophy if it isn’t used. Scenario planning purposefully calls on the imagination within a proven framework that helps focus that imagination on the revealing of insights that can have a profound impact on an organization’s strategic and tactical trajectory.
Integrating your scenario plan outcomes
At the end of the initial scenario exercise, you identified actions to take. Some of those actions may be complementary to your current strategic plan, and others may be in conflict with it.
If you did the scenario work to develop or revise your strategic plan, then you should start by reviewing your vision. Visions and strategies are much more malleable than missions and values (in dramatic instances, scenarios may force an organization to realize its mission needs to change, but that is rare).
Is your vision just a statement, or does it incorporate a rich narrative that allows people reading it to understand ideas that can become rather abstract when boiled down to a vision statement? The scenarios offer a starting point for the vision because they already consist of rich stories about the future.
Use the narrative process from the scenarios to develop your vision narrative. Take the uncertainty values that most closely match your vision and incorporate those into the narrative. The end of the narrative, however, must circle back to the scenario process with the caveat that the uncertainties are being actively monitored, and if something shifts from the underlying assumptions associated with this vision, elements of the vision may be changed, pushed out, eliminated or otherwise revised.
The next step is to transform actions into strategies. When asked during the scenario process, “what should you/would you do if this future came to pass” you created a set of actions. When you reacted to robust implications, you identified actions that you should take no matter which future unfolds. Those actions become adaptive strategies when captured as affirmative statements: “By 2020 all courses will be offered as either online courses or as hybrids,” is an example of an education strategy for maintaining relevance and enrollment in a highly networked, non-place-based future.
Keep the vision handy. Take your actions/strategies out of the scenario exercise and align them with your vision. Then consider what actions aren’t covered. Where are the gaps between the broad, long-range strategies and the more near-term actions that will help you achieve your vision? This gap analysis will lead you to actions that fall below the timeframe of the scenarios but are nonetheless important because they act as vision building blocks.
The final step, and this is a deep discussion all by itself outside of the scope of this document, requires the incorporation of strategic action into the annual department and individual goals and objectives. Ask people to look at their goals and objectives and figure out how to align them with the strategies. Ask them what the first, perhaps even second or third thing, they would do to ultimately arrive at strategic alignment—then help them incorporate those ideas into their annual plan.
People often go to the endpoint and think that the strategies are just too big so they just put into their annual plan what they would put in if the long-range strategies didn’t exist. That is a mistake.
Every person in an organization should understand its strategies, and every person and every department needs to start today by moving toward achieving those strategies. The annual (or more often) goals and objectives discussion is a great place to align with strategies (which also builds awareness) and then challenge people to see themselves and their work in those strategies. If you miss even one cycle, you may miss a full year where hundreds or thousands of people align behind the strategies to help realize them.
Of course, things will change. One positive change, if you incorporate strategies into individual work plans, comes when you realize you underestimated your people and some goals are achievable in shorter timeframes than you imagined. By incorporating strategic awareness into the planning process, if the world changes direction and veers away from your expectations (but stays within the scenario framework,) you can pull in contingency plans quickly, and people will be familiar with those plans. Even if you haven’t done extensive contingency planning, just making people aware of the various scenarios allows them to practice strategies, actions, and tactics related to those futures. By exposing the process to the entire organization, you make the entire organization more strategic and more nimble.
What to do after you integrate your scenario plan outcomes
After you integrate your scenario plan outcomes into your strategy, or take other actions or create other plans, you need to watch—to monitor the uncertainties as they move from the uncertainty of a probability cloud to something that is known (which may happen over vastly different scales, and sometimes never, depending on the uncertainty). The scenarios offer guideposts that will help your organization sense when change is imminent or inevitable. Early on, however, you have to watch.
With a good set of scenarios, all of the futures start unfolding at the same time. There is ample evidence for each, and confirmation bias must be avoided. The scenarios derive their value from their divergence. Seeing the future unfolding along multiple arcs helps people stay grounded in the analytical skepticism that underlies scenario planning. It helps people stay on their toes. (In the Spring of 2012, for instance, JP Morgan Chase made themselves a case study in not heeding a future warning. Their risk hedge fund lost $2B because traders didn’t believe that what had happened a few years ago could happen again, so they started using credit-default swaps as hedge instruments; history repeated itself, at least in a small way.)
Look to your key guideposts and see how they are developing. Although the majority of uncertainties may still appear as a probability cloud, if the signposts for a particular future start to appear focused (imagine a legislative and social retreat ) then the future that contains that guidepost is the one most likely to exert its influence. If it isn’t your hero future, then it’s time to dust off its contingencies and revise your strategies by using those actions most closely associated with the future that actually arrived. They may not align perfectly, but you will have practiced the future that arrived multiple times and will be better able to make minor adjustments than someone who was completely surprised by the outcome.
The simple answer to “What to do after you integrate your scenario outcomes?” is to keep actively sense-marking, imagining, and planning in a purposeful way. Don’t let the outcomes of the workshops establish the premise that “all that could be thought was thought, all that could be considered was considered.” Keep engaging, and as you do so, you will continue to fuel your imagination, and continue to see not only how to adapt, but be constantly reminded why adapting is important.
 A hero future is the official future of an organization, the one that reflects the consensus view. A hero future is usually the context for a vision. If an organization uses scenarios, the hero future should be seen as just another future when testing ideas or exploring strategic options. The hero future may be the first to require change because it is an amalgam of ideas, constraints, and values from other futures, and is not driven by the uncertainty possibilities in the same way as the other scenarios. The scenarios are driven by the underlying logic derived from a given set of uncertainties and their values in that future. They are therefore purposefully more challenging. Hero futures tend to be less challenging because they are constructed out of hopes and aspirations, not extremes.
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