Think Forward: The How To of Futures Thinking and Scenario Planning
Leaders are challenged to think on multiple horizons given the pandemic—addressing short-term needs and stemming the crisis, while considering the longer-term effects and how to come out the other side. All during a time of significant uncertainty.
It does seem unusual. Yet, one could argue this is what business leaders do all the time—deliver business performance for the current 1-2 years, while defining a strategic plan for a sustainable future that is unknown.
The Fourth Industrial Revolution already had businesses rethinking their business models due to its significant changes and impacts. Yet, how many business leaders were actually actively looking into the future and building scenarios to consider that informed their course of action?
With the degree of uncertainty associated with Covid-19, future forecasting and scenario planning should be added to your strategic planning process.
The Institute for the Future (IFTF) has provided good guidance on how to build future scenarios. The organization has even provided 4 different possible futures to consider when building your own.
Here’s another articulation of the same content with a bit added that is worthy of a second review.
For learning about scenario planning, this is an excellent HBR article on how Shell has used scenario planning successfully for over 45 years. There are great tips on how to work with scenarios to have them be effective within your organization.
Inspired by course I took with and the work done by the Institute for the Future, here are some additional steps you can take to get your organization starting to think into the future:
Make a commitment. First, set an intention to do this work and carve out time for people to participate. It must start here.
Establish a cross-functional team and start to explore. Make sure to get multiple points of view into the conversation. As part of your ideation, start by identifying the “drivers of change” that will impact your business and what the implications are of those changes. And then, start to look for current “signals” that demonstrate new ideas and innovations are starting to take shape. During this stage, you can employ experts and people working in analogous fields and circumstances to feed your understanding of what’s taking shape.
Ideate possibilities. From your foundational understanding, start to explore alternate futures under different scenarios. Consider: What are new possibilities that might take shape due to the drivers and signals you are seeing? What are the consequences of these changes? Then, bring the futures to life. Perhaps write a newsletter article about your business in the future or create a related persona of a character from the future.
Identify paths forward. From the prior step, consider what opportunities and threats arise from the different scenarios. What are commonalities across the different scenarios? What is your preferred future? What are actions to take advantage of opportunities and reduce threats? What are possible new opportunities you could craft in a new future? What would it take to bring those to life?
Integrate into actions plans. From all the actions you generate out of the prior steps, you won’t be able to do them all. Evaluate them considering which you believe will play into the future or scenario with the greatest likelihood. Then consider which actions will have the greatest impact and weigh them against the amount of effort required. Given the different scenarios, don’t forget to factor in what contingency plans might have to be put in place. Map your actions against horizons—short, medium, and long-term. Consider that some long-term actions may require long lead times such that they you may have to invest time and dollars into activity in the short or medium-term. Finally, create a testing plan. Leverage the Discovery Driven Planning approach and ask questions like, “what needs to be true?” for this scenario to play out? Understand your assumptions and determine how you will test those assumptions along the way to inform shifts in your strategy over time as new information is learned.
Two other books I’ll reference for consideration, as well, when building solutions during this uncertain time are:
“Blue Ocean Strategy” and “Blue Ocean Shift” by W. Chan Kim and Renee Mauborgne. Their philosophy of creating Blue Oceans is ever relevant and now is a great time to reimagine opportunities and create a blue ocean for your business.
“Creating Great Choices—A Leader’s Guide to Integrative Thinking,” by Jennifer Riel and Roger Martin. This book is an excellent approach to developing new ideas that break away from black and white solutions, hence “integrative thinking” that leads to new, surprising, unseen opportunities.
Navigating these times has to be one of the most demanding for leaders in decades.
Putting ones head in the sand isn’t an option. In a time of significant uncertainty, it seems prudent to map multiple scenarios for consideration to shape a new vision of the future, chart the best course, and continually revisit and adjust plans as new information is learned. Future forecasting and scenario planning can help you create a foundation from which to gauge how our new world will take shape. Even better, it can help you shape what our new world will become.
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