Scenario Planning: An Approach to Strategic Planning When You’re Walking on Quicksand

For many organizations, strategic planning can often become an exercise in futility. You spend all this time developing a plan and then bingo, something unexpected hits and you've got to do some pretty quick fancy footwork in order to reach your desired outcome. And sometimes what you thought made sense several months ago is now…

For many organizations, strategic planning can often become an exercise in futility. You spend all this time developing a plan and then bingo, something unexpected hits and you've got to do some pretty quick fancy footwork in order to reach your desired outcome. And sometimes what you thought made sense several months ago is now completely off. So how do you do strategic planning in a constantly changing environment?

One way is to shift from strategic planning to scenario planning. Scenario planning is a strategic planning tool used to make flexible long-term plans and is best suited for organizations that have a great deal of uncertainty on the horizon. It is similar to strategic planning in the following ways:

  • One of the first things you need to do is to conduct an internal and external assessment.
  • At some point in planning planning, you will brainstorm potential goals or scenarios.
  • Once you've prioritized those scenarios, you will then develop an organizational strategy for achieving those scenarios.

Here are ways that scenario planning is different:

  • Scenarios are developed taking into consideration future, unknown outcomes or events that could push the organization in different directions. For example, a newly elected legislature could completely change the business landscape – what seemed to be on track last year is now off the table this year. Therefore, scenario planning helps organizations play a “what if?” game.
  • Those future outcomes determine a particular course of action for the organization or require another set of strategic decisions to be made. Think of this like a maze where you have to continuously make choices about direction.
  • Scenario planning uses more comprehensive assessment tools; instead of using SWOT (Strengths, Weaknesses, Opportunities, Threats) it often uses PESTLE (Political, Economic, Social, Technological, Legal, Environmental).

So how do you go about doing planning planning? Here are the basic steps:

  1. Scoping: What is the question / issue you want to answer / address?
  2. Trend Analysis: Identify external forces in operation and consider the pressures they play.
  3. Building Scenarios: Using the results from the first two stages, build your scenarios to explore.
  4. Generate Options: Consider the options available within the scenarios – innovations, new services, projects or opportunities.
  5. Test Options: Identify and discuss potential implications and impacts of scenarios on the identified options and consider running a pilot.
  6. Action Plan: Define an action plan as a result of these activities.

For some organizations, this could become the new normal. For others, it may be the current reality while an organization is emerging from one dying system into a new one that stabilizes for a period of time. One thing we can know for sure is that change is likely to be a constant in organizational life and so our strategic plans need to be able to flex with those changes.