Today's businesses must become more adaptable to an ever-changing business environment or risk demoralizing failure. Scenario planning should be part your company's "secret sauce" in ensuring its adaptability.
After all, it has never been a safe bet to assume the future will be like the past. Situations change, challenges emerge, new competitors threaten market share, key personnel move on. It is for this reason that leaders must practice (on a regular basis) taking the time needed to identify and consider various business events and scenarios that might occur and how they would manage through them should they materialize.
Many larger businesses have already integrated scenario planning into their strategic direction-setting practices. Shell, for instance, has been developing scenarios of the future since the 1970s. They describe its value on its website as follows:
"Shell Scenarios ask "what if?" questions encouraging leaders to consider events that may only be remote possibilities, and stretch their thinking."
You can do the same for your business.
Because there is not just one version of the future, it is essential that we think about the multitude of situations that can develop and influence the businesses that we lead. That said, it's critical to work at being broad-minded about the possibilities that may unfold. Try to leave nothing to risk when identifying pondering the possibilities.
Indeed, preparing for just one scenario risks wasting time and energy on something that may never happen. It is better to take a wider swipe at the possibilities. In this way, you may be able to determine actions that you can take today that would be valuable in many, or all, of the scenarios that emerge tomorrow.
How do you get started? Here are three easy ideas to get you going:
1. Engage your team in brainstorming exercises
Periodically engage your team in a brainstorming exercise aimed at identifying the conditions or events that, if they were to arise, would devastate the business. Determine the actions you would have them take to overcome the situations and define the early indicators that would signal the emergence of each scenario. In this way, you will be helping your business and your team to do a better job of anticipating and overcoming challenges before they emerge.
2. Walk around and talk with your people about what they think could be possible scenarios
Have conversations with your people about what they see as job-related situations, should they occur, that would prevent them from getting their work done. Determine possible workarounds with them. Ask them to briefly outline each scenario and response. Like Shell, collect them as they are developed. Use the collection of scenario briefs as a quick reference source should a given scenarios begin to materialize.
3. Use "scenario thinking" to spot talent
Use scenario thinking to spot talent by engaging your junior people in conversations about the possible scenarios that you've developed with your leadership team. Look for creativity from younger members of your team. Some, who show the greatest potential, can be put on a track for additional, accelerated development. If you do this, you will be preparing the next generation of leaders in scenario thinking.
To close, it's not important that you accurately predict the future and always "get it right." Rather, value comes by the mere act of regularly imagining a range of possibilities and determining your reaction to them. Indeed, the practice of scenario planning lessens risk and improves reaction time--helping you to be a leader among leaders.