Six Reasons to Use Scenarios During Strategic Planning

Clients often ask what value scenario planning brings to the strategic planning process. We outline six ways that scenario planning enhances not only the scenario planning process, but also increases an organization’s leadership capacity and agility.

1. Use Scenarios During Strategic Planning to Build a Consensus Reality

Many boards and teams of executives focus so much on getting done what needs to get done that they don’t spend time talking to each other about how they view the world. This can result in very dysfunctional meetings and poor, contentious decision making. Because scenarios force organizations to examine uncertainty closely, those involved in that exercise end up agreeing on at least what they don’t know, and that is a starting point for building better futures.

2. Challenge Assumptions

Forming a consensus reality, in other words, understanding where everyone is coming from, only moves organizations partway to creative strategic dialog. Scenarios take the next step by creating a non-political environment for challenging assumptions and biases that might otherwise make it into the plan unnoticed. Using scenarios, individuals can see common issues and opportunities from new perspectives.

3. Identify New Opportunities

As participants explore concepts, technologies, processes and other elements of their organization and industry from multiple perspectives, they will make new connections and see those that might not be evident from their current POV—this can lead to new opportunities being identified during the process. New strategies will suggest themselves during this process.

4. Drive Innovation

Those who only look at challenges and opportunities from one perspective will likely come up with the same solutions over and over again, perhaps getting frustrated that the same strategy continuously emerges without followthrough or execution. Part of that frustration comes because people in the organization have not developed a shared reality. It also comes from a lack of a facilitated perspective. Regardless of how people want the world to turn out if they admit that certain major elements remain uncertain, then looking at them through the lens of desire versus pure possibility proves a dangerous management practice. As soon as people start imagining the world of uncertainty beyond a clear horizon, new solutions to old problems and innovation emerge. These new solutions offer insights that can transform products, processes or services into differentiated offers because the market of competitors might transform into a new category that can be owned rather than fought over.

5. Use Scenarios During Strategic Planning to Facilitate Adaptation

Those who only think about the world in one way, the mind, like the body sitting in a chair too long, will conform to its constraints. Scenario planning forces people out of their mental constraints. The scenarios may not always prove prescient, not resonate with all involved, but they will always help people exercise mental agility, and that delivers an opportunity for them to practice change, perhaps even anticipate it.

6. Understand Your Place in the World (the Future)

Most planning focuses on the here and now extrapolated forward. But our worlds live in context, which means their successes and the futures are dependent on factors that can’t be controlled. Our place in the world is a combination of our local context and the world around it. Scenarios help describe the current context by naming and characterizing the uncertainties we face, but it also helps explore the context of the future so that forward-looking plans aren’t just extrapolations of the status quo, but well-designed and tested ideas that can be resilient in the face of change.

Scenarios will always help people exercise mental agility, and that delivers an opportunity for them to practice change, perhaps even anticipate it.

For more on strategy and scenario planning from Serious Insights, click here.