The world is changing quite dramatically in the wake of Covid-19 and scenario planning is becoming more important than ever. And even during this uncertainty, you still need to be able to think about what will happen to your business in the future and how you’ll adjust.
By scenario planning, you can try to avoid making the two most common mistakes in strategic analysis – overprediction and underprediction of the company’s future. It’s important for controlling costs, avoiding disruptions and staying competitive. So, for our tenth Survive and Thrive session, we talked about scenario planning.
We were joined by Heart of the City trustee Nick Turner, Founder and Managing Partner at strategic advisory boutique Stratforma. Stratforma partners with senior leaders to build the insights, capabilities and confidence to make better strategic choices today, considering an uncertain tomorrow.
Seven steps of developing scenarios
Nick started with the background around scenario planning, sharing valuable insights on the typical responses to uncertainty, stress testing and the challenge of seeing risk. He shared seven steps of developing scenarios to get your business ready:
- Strategic question: defining your strategic question, understanding its context and identifying your stakeholder groups.
- Driving forces: forming a steering group of representatives from your stakeholder groups and a sounding board of experts.
- Critical uncertainties: analysing the external and internal environments which will form part of your creative sessions.
- Scenario frameworks: a creative session where stakeholders will develop the framework and foundations for a few scenarios.
- Scenario stories and horizon scanning: based on the output of the creative sessions, you’ll craft different scenarios, a vision and strategic courses of action. You’ll evaluate these actions in each of the scenarios.
- Implications and options: a report of the entire process and the outcomes of all the steps you’ve taken.
- Indicators and signposts: Think about how you’ll implement and maintain a strategic foresight approach to help your organisation become more resilient
Nick’s top tips
Nick also shared his Covid-19 scenario framework considering two critical uncertainties: public response and global coordination. Here are his top tips for getting started with scenario planning:
- Take time to understand what will shape your future. It’s hard to carve out time but it’s important for the future of your organisation.
- Make your assumptions explicit. And then challenge them – what if that doesn’t happen in the way we’re assuming?
- Explore the implications. This is the ‘so what’ conversation! If this doesn’t work out in a different way, what does this mean in terms of your businesses? Think about changes such as new business, clients, growth, cutting costs and recruitment.
- Accept that you can’t predict the future, but as Keynes said, “It is better to be roughly right than precisely wrong.”
- Don’t bet on a future, bet on a robust strategy. Have confidence that you’re doing the right thing.
Remember, as an SME, you can respond in a nimble and agile why so it’s important to look at the trends and issues around you as they’ll help you develop a set of plausible scenarios for the world after COVID-19. Taking these steps and adopting this philosophy will secure the future of your business.
Don’t miss the next Survive and Thrive sessions!
This was our last Survive and Thrive session before we break for the summer, but we’ll be back in September so don’t miss out on future Survive and Thrive sessions! We will be covering topics such as the end of furlough, mental health and communications. Future of Heart of the City members can sign up to future sessions here, or you can join as an associate member here.