In times of crisis like the current rapid spread of the novel coronavirus (COVID-19), Scenario Planning is an indispensable tool and at this moment applied by governments, health agencies, and companies around the world. Although I often prefer to use additions like ‘Thinking’ or ‘Analysis’ to emphasise their importance, in the present situation ‘Planning’ is more appropriate as it highlights the proactive contingency planning qualities of the scenario approach. While the scenario process can be advanced and diverse in many respects, the main steps in identifying, developing and using scenarios are always more or less the same. This is Scenario Planning in a nutshell as it can be applied to crisis situations:
Start with listing the key drivers that shape and can firmly shake up the future context in which options and interventions play out. Applying Scenario Planning means exploring the present and future context ‘outside-in’ before identifying, testing and improving strategies, options and interventions. In crisis situations like the current one, given time and (scientific) knowledge available, this will be parallel rather than serial flows.
Identify the range of ways in which important external drivers may develop and dynamically interact over the appropriate time horizon and, in doing so, create alternative future contexts, i.e., scenarios. Challenge thinking beyond what is considered ‘plausible’, ’logical’ or ‘consistent’ as the real world may, and the more so when uncertainty is high, step outside of what currently can be imagined and create what was ‘unthinkable’ only a short period ago.
Stretch, think through, and analyse the set of selected scenarios that are ‘possible’ and relevant to deal with the situation and/or can help to generate effective and novel strategies, options and interventions. In doing so, stay far away from 2x2 scenario matrices that so easily oversimplify the complexity of the situation and underestimate the range of possibilities.
Use each scenario to identify effective strategies, options and interventions for the situation at hand and ‘windtunnel’ these within all other scenarios to test and reinforce them. The main purpose of this step is to generate the potentially best interventions in each future scenario and situation that may emerge, not to identify the best strategy ‘on average’ across all scenarios. The essence of scenario ‘contingency’ planning is to (be able to) switch to other options when circumstances change significantly or interventions do not produce the desired results.
Then, and this is crucial to the entire scenario exercise, DO NOT select any of the scenarios, options or interventions as the most plausible, probable or preferred one to pursue indefinitely. Instead map, measure and monitor early indicators of change to assess for which scenario or parts thereof most evidence is available and, hence, is unfolding.
Finally, select and implement the best strategy and interventions given the present situation and, current evidence of the unfolding, future context. At all times, monitor key driving forces to identify the smallest of contextual changes, newly emerging trends and radical trend breaks at the earliest stage possible. At the same time, measure and test the effectiveness of selected strategies and interventions to see what works and what does not. Adjust strategies when conditions change and switch to alternative interventions that better match new conditions.
Keep on reiterating the steps above as long as the best combination of strategies and interventions to fight and improve the situation has not been found yet. Finding the ultimate intervention is not simply choosing between option A or option B on the basis of a selective set of, partly implicit, criteria, preferences and beliefs. Instead, it is the product of gradually learning to understand the intricate interactions between a wide variety of factors that are partly outside and partly within the control of the acting party. In the end it is all about increasing the speed of learning and the more that learning is shared, the more effective will it be.
Do you want to know more about Scenario Planning to deal with uncertain times and crisis situations and apply it yourself as soon as possible or at a later stage, do not hesitate to contact us directly. Note that it is also a powerful tool in better times to identify attractive business opportunities and strategic risks whatever the future brings.