If you go to 10 of your most trusted sources of business advice and counsel, you are bound to get 15 different “expert opinions” about what the future holds for your business and your strategy going forward. This is certainly even more true today in the time of COVID and related events.
Dealing with uncertainty makes most leaders uncomfortable. The overwhelming response is typically to try to assume away the most unpleasant and/or “unlikely” attributes of the future environment, and then settle on a middle ground of what seems to be the “most likely” and plan accordingly. The problem is that you know only one thing will prove to be true: your “most likely” assumptions won’t actually come to pass. Trying to build a strategy around key assumptions in a more or less linear fashion is a fool’s errand in the best of times and virtually worthless in these days of extreme unknowables.
There is hope, however. A particularly relevant tool is at your disposal: scenario planning. This tool involves creating realistic, internally consistent worldviews (scenarios) of the environment in which you could envision your organization having to compete going forward. While research can inform these independent worldviews, most elements of each scenario are generated by you and your organization – often with the help of outside facilitators – to reflect your best judgment. As you “live” in each independent scenario, you develop winning strategies for that world. Having done so, you can determine which strategies tend to be effective across all scenarios, and which are unique to a given scenario – ie, that specific scenario would have to unfold for your strategy to work. By doing so, you future-proof your strategy by focusing on strategies that do well no matter what future unfolds. While not guaranteed, this approach is more likely to be effective however the world evolves.
Sage Partners has helped multiple clients, including airlines, retailers, and complex healthcare organizations use scenario planning to address major uncertainties as their industries and businesses worked through significant uncertainties that threatened their very existence. We are experts at lending our experience to management teams navigating complex strategic questions.
Sage Partner Rich Schneider contributed this Sage Advice
Comments