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Scenario Planning: Don’t Forget Smaller What-Ifs While Developing Strategy

Last time in this space we started discussing scenario planning by talking about preparing for the “big what ifs” or the driving forces that generally exhibit as 1) social dynamics, 2) economic issues, 3) political issues, or 4) technological issues. These are the cases that tend to push your thinking and are usually classified as the big unknowns.

But there are also a number of smaller scenarios that may hit closer to home than the “big what ifs”. Calling these smaller scenarios is a bit of a misnomer because when they happen, they can happen quickly and with devastating consequences, so they don’t seem too small. Consider, for example, any of the following:

Stepping into your future
Okay, so now that we’ve caught your attention maybe you’re ready to consider some “what ifs” of your own. Here are the steps for running your own scenario planning. One suggestion – this exercise need not be exhaustive. Begin by identifying the risks from the list of big “what-ifs” and smaller “what-ifs” and create a one-sheet for a few realistic, possible scenarios that your organization might face in the next few years.

  1. Define a timeframe for each scenario. Some events may occur in 20 years, some in two. But you can’t work with indefinite, open-ended scenarios.
  2. Establish the primary variable in your scenarios. Assess ways in which these variables may present opportunities or threats to your business.
  3. Clearly articulate the scenario with a problem statement. On a white board, write down “What if _____?” and fill in the blank. For example, “What if we lose our biggest client this year, resulting in a 50 percent decrease in revenue? Or what if new housing starts decrease this year by 20%?
  4. Flesh out the details of the scenario. Clarify exactly the situation your company would be in.
  5. Develop a trigger point and an action plan if the scenario in Step 5 should occur. Know
    when to execute the action plan by having a clear trigger point. Then detail the top five steps you will take in the effect the trigger occurs. These are designed to work regardless of how the future turns out.

Many of these choices otherwise go unnoticed if you focus obsessively on your organization’s present-day situation. With scenario planning, you’re imagining not just one, but a variety of future possibilities. All the great opportunities in the world aren’t enough unless you have contingencies in place. And remember, you’re not only preparing for unexpected threats but also trying to foresee unanticipated opportunities.

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