Scenario Planning: a strategic tool for foresight and resilience

Have you ever thought, “If only I’d seen that coming…” when faced with an unexpected change in your business? Rest assured, you’re not alone! Scenario Planning was developed precisely to address this kind of challenge. Imagine having a compass to guide you through various possible futures for your business.

In this article, let’s dive into how this approach can transform how you think about the future. No complex jargon, I promise! I’ll share actionable tips and practical examples to help you make this method your own, at your own pace.

What is Scenario Planning?

Scenario Planning is a structured process that enables leaders to envision multiple possible futures to better prepare their organisations for uncertainty.

Picture Scenario Planning as a map revealing several possible paths for your business. Instead of betting on one route, you explore different directions your market could take. It’s like planning multiple routes for a hike: sometimes the sun shines, sometimes it rains, and it’s always better to be prepared for both!

This approach allows you to move beyond the traditional “what if…” to genuinely anticipate changes that could impact your business. Whether it’s the arrival of new technology, a shift in consumer habits, or market evolution, you’ll be better equipped to handle these transformations.

Rather than focusing on a single prediction, this method explores various potential futures by considering uncertainties and the key drivers that could influence your business.

Methodology for using Scenario Planning

Wondering where to start with Scenario Planning? No need to panic! Think of it as building a puzzle: step-by-step, each piece helps bring the final image into clearer focus.

Here’s a simple step-by-step guide to get started.

1) Define your vision and strategic goals

Let’s start with the basics: what do you really want to understand for your business? It’s like planning a big journey – first, you need to know where you’re headed!

Clarify the strategic objectives you aim to achieve. Here are some questions to consider:

• “How will digital technology transform our way of working?” – to anticipate the impacts of digital transformation on your sector
• “What impact will new regulations have on our business?” – to understand how regulatory changes might affect your operations

For instance, imagine a transport company wondering how its industry will evolve over the next decade. With environmental regulations tightening and autonomous vehicles on the horizon, the entire sector could change dramatically. This is precisely the type of reflection that makes Scenario Planning so valuable.

2) Identify the drivers of change

What forces will shape your future? Think of it like watching the weather: some patterns are more predictable than others!

We can distinguish between two types of changes:

• Long-term trends – predictable developments: such as an ageing population, these are changes we can anticipate
• Turbulence – critical uncertainties: like technological breakthroughs or political decisions, these are changes that can surprise us

Here’s how to proceed:

• Organise discussions with your team and industry experts – the more perspectives, the better!
• Use the PESTLE method to scan the horizon in all dimensions (Political, Economic, Social, Technological, Environmental, Legal)

3) Prioritise key uncertainties

With so many potential changes, how do you know which ones really warrant your attention? Think of it as sorting out small waves from the potential tsunamis in your sector!

Focus on two main criteria:

• What would be the impact on your business?
• How difficult is it to predict?

Here’s how:

• Create an impact and uncertainty matrix: on one axis, the scale of impact (from low to high), and on the other, the level of uncertainty (from predictable to unpredictable)
• Plot your potential changes on this matrix
• Focus on the “heavyweights” – those in the top right of your matrix with high impact and high uncertainty
• Select the two most important factors to base your scenarios on

Returning to our transport company: advancements in autonomous vehicles (high impact) and changes in environmental policy (high uncertainty) could be the two critical factors to monitor. These elements will truly shape your future market!

Pro tip: Don’t spread yourself too thin! It’s better to delve into two major uncertainties than to try to handle ten superficially.

4) Create possible futures: different scenarios

This is where your creativity comes in! Like a director envisioning various endings for a film, you’ll create multiple versions of the future. The goal? To make each one plausible yet distinct enough to spur your thinking.

How to go about it?

• Mix and match your two major uncertainties in different ways
• Give each scenario a vivid name that captures its essence
• Paint a complete picture for each version of the future

For our transport company, crossing autonomous vehicle adoption with environmental regulation shifts could result in scenarios like:

1. “The Green Revolution” (Green Mobility: High environmental regulation + Rapid adoption of autonomous vehicles)
2. “Slow Evolution” (Status Quo: Moderate regulation + Slow adoption of autonomous vehicles)
3. “Tech Leap” (Autonomous Disruption: Low regulation + Rapid adoption of autonomous vehicles)
4. “Green Control” (Government-led Transition: High regulation + Slow adoption of autonomous vehicles)

Tip: Don’t aim to predict which scenario will happen, but prepare for all of them!

5) Explore the impact on your business

Now that your scenarios are set, it’s like trying on different pairs of glasses: each one shows your business in a new light! The goal is to understand how your company could be impacted in each scenario.

Use a SWOT analysis for each scenario to dive deeper.

Let’s return to our transport company and explore each scenario:

1. “The Green Revolution” – What would your business look like?
   • Strengths: Early commitment to electric vehicles
   • Weaknesses: High cost of fleet transformation
   • Opportunities: New autonomous transport services
   • Threats: Competition from tech giants
2. “Slow Evolution” – How will you adapt?
   • Strengths: Expertise in traditional service delivery
   • Weaknesses: Potential technological lag
   • Opportunities: Gradual modernisation
   • Threats: New agile competitors

And so forth…

Pro tip: The goal isn’t to pick the “best” scenario, but to understand how to adapt to each one!

6) Prepare your flexible sstrategy and action plan

You’ve explored multiple possible futures, so what’s next? The idea is to build a strategy that can adapt, like a 4×4 ready for any terrain!

Returning to our transport example, here’s how to build your flexible strategy:

1. Identify your “win-win” actions
   • These are moves that benefit you regardless of which scenario unfolds. For instance:
     • Training your team in new transport technologies
     • Developing partnerships in sustainable mobility
     • Gradually modernising your fleet
     • Strengthening data management capabilities
2. Create your Alert Dashboard
   • Like a GPS, certain signals will indicate which scenario is emerging:
     • Monitor regulatory changes
     • Track autonomous vehicle tests in your region
     • Observe customer behaviour
     • Measure the adoption of new technologies in your sector

Practical advice: Define clear decision points. For example: “If emission regulations increase by X% by 2025, accelerate our fleet transition…”

Scenario Planning is about embracing possibilities rather than predictions. It gives you the resilience to adapt to change and face the future with confidence.

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If you’re looking for an online course to learn about strategic foresight and how it’s applied, I invite you to check out the MOOC Building Strategic Foresight Capabilities on Coursera.

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How to build your scenarios: a practical approach

You’ve identified your major uncertainties, so now let’s look at how to turn them into scenarios that will genuinely support your strategic thinking.

Here are the five key principles to succeed with scenario planning:

(1) Create Contrasting Scenarios Avoid minor variations! Your scenarios should explore truly different futures.

Make sure the scenarios are diverse enough to cover a wide range of possible futures.

In the transport sector:

• A world where autonomous vehicles revolutionize the entire industry
• Another where environmental regulations redefine the playing field
• A third where these two forces combine… Each scenario should bring a unique perspective on your future.

(2) Ensure Internal Consistency
Every element in your scenario should logically follow the trends you’ve identified. Changes should be realistic and progress naturally, even if they’re ambitious.

(3) Focus on Your Key Issues
Keep your two main uncertainties (for transport: automation and environmental regulations) at the forefront. These should structure your scenarios and guide your thinking.

(4) Develop a Clear Vision
Go beyond simple technical descriptions. Show how your industry might evolve, how client needs could transform, and how roles might adapt. The more detailed your scenarios, the more useful they’ll be.

(5) Connect Everything to Your Strategy
Each scenario should shed light on strategic choices. Each one should highlight specific challenges and opportunities, helping leaders understand how their current strategy could adapt.

For a transportation company, this means understanding:

• Investments to plan for
• Skills to develop
• Services to evolve
• Partnerships to form

Pro Tip: Present your scenarios to different teams within your organization. If certain points raise questions, this is an opportunity to refine them!

Scenario Planning: your ally for leading through uncertainty

As a leader, how can you get the most out of this approach? Here are the three major benefits that can transform your decision-making.

(1) Prepare for all possibilities

Scenario Planning pushes you to look beyond the obvious, preparing you to respond swiftly and effectively in any circumstance.

In the transportation sector, you might have to think through situations you hadn’t initially considered:

• The arrival of stringent carbon regulations
• A rapid adoption of autonomous vehicles
• An unexpected combination of the two

The more you explore these possibilities, the more capable you’ll be when changes arise.

(2) Develop an adaptable strategy

Instead of betting on a single future, you build a strategy that can evolve. By exploring different scenarios, you can identify flexible strategic options that can be adjusted as circumstances change.

For our transport company:

• Identify priority investments that make sense in multiple scenarios
• Recognize key moments when you might need to change course
• Prepare different options for your fleet, services, and organization

This flexibility becomes a real advantage over your competitors.

(3) Mobilize your teams

Scenario Planning isn’t a solitary exercise! It’s an opportunity to:

• Bring together your commercial, technical, and HR teams around a common reflection
• Share a clear vision of future challenges
• Generate new ideas thanks to varied perspectives
• Prepare your teams for potential changes

Pro Tip: Regularly hold update sessions for your scenarios with your teams. As changes accelerate, your scenarios should keep up!

Read the Forbes article – How Scenario Planning Can Help Leaders Deal with Uncertainty.

Pitfalls to avoid in your scenario planning process

As with any strategic exercise, Scenario Planning has its challenges. Here are three main obstacles and, importantly, how to overcome them.

(1) The risk of staying in your comfort zone and cognitive iases

We naturally prefer to envision futures that reassure us, favoring scenarios that confirm our existing beliefs.

In transport, you might be tempted to downplay the impact of autonomous vehicles because “our clients will always prefer human contact.”

To avoid this pitfall:

• Invite external experts to challenge your assumptions
• Designate a “devil’s advocate” in meetings
• Expose your scenarios to diverse opinions
• Dare to imagine major disruptions

(2) Lack of leadership buy-in

Without true involvement from leaders, the exercise may remain theoretical.

For a transport company, imagine inspiring scenarios about the future of mobility… that end up gathering dust in a drawer.

How to avoid this:

• Start by presenting concrete examples of successful Scenario Planning
• Show the potential financial impact of certain scenarios
• Involve leaders in scenario building
• Hold regular meetings on scenario evolution

(3) Difficulty translating into action

Having great scenarios is one thing; knowing what to do with them is another! The risk? Staying at the level of beautiful presentations without real impact.

The solution:

• Define an action plan for each scenario
• Identify “quick wins” to implement quickly
• Assign leaders for each key action
• Set precise deadlines
• Regularly track progress

Pro Tip: Start small! Choose a limited scope for your first Scenario Planning exercise. Quick wins will help convince the skeptics.

An example of using Scenario Planning in Strategic Workforce Planning

Strategic Workforce Planning (SWP) offers a practical application for Scenario Planning, as illustrated by a transport company anticipating staffing needs for the coming decade.

The company might consider several scenarios:

(1) “Green Mobility,” where strict environmental regulation and rapid adoption of autonomous vehicles require fewer drivers but more green-tech and autonomous systems experts;

(2) “Technological Status Quo,” with moderate regulation and slow adoption of autonomous vehicles, maintaining driver demand while gradually increasing the need for technical staff;

(3) “Autonomous Disruption,” characterized by low regulation but rapid adoption of autonomous vehicles, demanding a quick shift to autonomous fleet management and high-tech maintenance skills.

For each scenario, the company would develop specific HR strategies.

(1) In the “Green Mobility” scenario, it might launch large-scale retraining programs for drivers into technical roles.

(2) For “Technological Status Quo,” it would maintain driver recruitment programs while gradually introducing tech training.

(3) In “Autonomous Disruption,” it would accelerate recruitment of robotics and AI engineers while preparing transition plans for existing staff.

This approach keeps the transport company agile, with HR action plans ready for different potential futures, ensuring the right skills are always available at the right time, whatever scenario materializes.

Case Study: Shell and Scenario Planning

Shell is often cited as a success story for Scenario Planning.

In the 1970s, the company developed scenarios that included a major increase in oil prices.

When the 1973 oil crisis hit, Shell was better prepared than its competitors and could react quickly, jumping from the eighth to the second-largest oil company.

Conclusion

Scenario Planning is a powerful tool that offers leaders a broader and nuanced vision of the future. By following a structured methodology, companies can prepare to face a variety of potential futures, reinforcing resilience and strategic flexibility. In a world where uncertainty is the norm, this approach is essential for navigating the murky waters of the future.

To go further, consider integrating Scenario Planning into your regular strategic planning cycles and training your teams in this methodology. Regular Scenario Planning practice can transform how your organization perceives and prepares for the future, creating a sustainable competitive advantage.

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