Scenario planning: five tips from White Space Strategy

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Scenario planning is, in principle, very easy to do: think of all the things that might plausibly happen in your market, shape them into a set of possible scenarios, and create an action plan to implement if a scenario comes to pass. To do it well, though, requires a more thought through approach, drawing on market understanding, stakeholder engagement and creative thinking.

White Space Strategy has helped many of the world’s best known companies with scenario planning. Their Managing Director, John Bee, has shared his top tips for success in this blog.

Tip #1 = Define what a scenario is (and what it’s not)

One of the biggest risks to effective scenario planning is a belief that scenarios are predictions – and are what you think is likely to happen. This is not the case. A scenario is a possible version of the future, and you’re aiming to plan for a range of eventualities (some of which might be unlikely but hugely impactful if they came to pass).

It’s really important that all stakeholders are comfortable that no one scenario represents the ‘truth’ or a real picture of the future. You’re not aiming for ‘right’, you’re aiming to plan for a range of eventualities, including different options that lean towards extremes. In reality, the ‘truth’ probably combines elements of a few of your scenarios (and probably some things that come out of left field that you just can’t plan for!) but by planning across a range of them, you are preparing in the best way you can.

Then from here, the key is to think about which elements of planning are common across all scenarios – ‘what actions do we need to take regardless’, then ‘which actions do we need to take if we believe X or Y is true’.

Tip #2 = Have clarity of purpose

Right at the outset, it’s really important to be clear about why you’re doing scenario planning in the first place. For many companies, it’s about ensuring they will have the right products in the right markets at some point in the future. This will lead to a focus on customer needs, market sizes and tech trends in the scenario development process. Other companies are more focused on protecting their market position, and on heading off disruption. This will lead to a strong focus on competitor capabilities and potential future plans, including consideration of potential new entrants and start-ups. A different set of objectives could focus on increasing profitability. In this case, future drivers of cost and efficiency would need to be considered strongly.

Setting an appropriate timeframe is also important. How far into the future are you looking? This will be driven by what you want to achieve, and by how fast your market’s changing. In a fast moving market, a 12 month timeframe might be appropriate. If the pace of change is slower, or to create a longer term strategy, you might set the timeframe at 5-10 years. Be sure to think about any major market shifts that are already known about, such as a big change in regulation, a critical patent expiring or a key contract coming up for renewal.

Tip #3 = Work collaboratively

Scenario planning is best done as a group. It’s a creative process which benefits from drawing on multiple perspectives and opinions about the future. Two parts of the process benefit most from collaboration: scenario development and action planning.

White Space Strategy typically cover these stages through two separate workshops. A scenario development workshop starts off by considering the forces and trends that are shaping the future of the market. It might be possible to identify these in advance – but a collaborative discussion will be needed to gain consensus on which are likely to be most significant. Group discussion will also be needed to build these ‘change drivers’ into actual scenarios that everyone buys into (as credible and useful). This kind of workshop really benefits from diversity of thought. Involve staff from a wide range of backgrounds and levels, including younger people who may be more in touch with future trends and tech development than the company leadership.

An action planning workshop involves identifying opportunities, threats and initiatives relating to each scenario separately. What would you need to do or be able to do if the scenario happened? Is there anything you could do to make it more or less likely to occur? These discussions require company leadership to work together, and to commit to implementing the plans and initiatives that are identified.

Tip #4 = Harness external input

There’s a fantastic opportunity to involve customers, suppliers and market experts in the creative process. Market experts may have perspectives which are very different to those held internally, and can provide a quick shortcut to map out future trends in new markets and adjacent spaces. Suppliers may be able to share insights into new technologies and on emerging capabilities. Business customers may also have a well developed view of the future of their market, developed from a different standpoint to your own.

In White Space Strategy’s experience, it’s possible to engage each of these groups fairly easily – people like sharing views on the future direction of markets. The best time to do this is usually towards the beginning of the scenario development process, when you’re identifying future forces and trends to translate into the scenarios themselves.

Tip #5 = Bring scenarios to life

Scenarios can be used on an ongoing basis, long after an initial scenario planning project has finished. They’re a useful tool to stress test new ideas and strategies – for example, is a potential acquisition still attractive, in each of the scenarios?

To support this kind of on-going use, scenarios need to be memorable, engaging and visual. Videos and infographics are a great way to do this. Loop in your marketing team, or a good design studio, to create some powerful, engaging outputs out of the PowerPoint decks and flipchart write-ups that have come out of the scenario development workshopping and ideation sessions.

Here’s an example of a video White Space Strategy created to outline future scenarios relating to the Covid-19 pandemic. We developed it within a month of the first lockdown, using video to communicate four scenarios in a more engaging way than words could have done alone:

These five scenario planning tips should help you create outputs that are impactful, useful and stand the test of time. White Space Strategy’s scenario planning workshop template provides a format that can help with this in practice. Their step-by-step guide summarising the end-to-end scenario planning process is also available on Whiteboard.

If you’re looking for external support with scenario planning, feel free to contact John Bee directly on john.bee@whitespacestrategy.com. White Space Strategy has a huge amount of scenario planning expertise to draw on. Our workshop facilitators, strategists and digital design partners have worked with many of the world’s leading companies, helping them imagine the future and plan ahead for all eventualities.

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