You don’t know – you can’t know with 100% certainty – what will happen tomorrow. Yes, you can (and we all do) contemplate the future with a good sense of what is likely to happen, although these days the future seems incredibly cloudy, uncertain, and basically unpredictable. And if tomorrow seems hazy, what about next week, next month, next year, five years from now?
And the less certain you are of what the future will bring, the more highly stressed you are likely to be. That stress comes from not knowing, and from being afraid that you won’t be able to control whatever does happen.
But what if you could “premember” tomorrow as clearly as you remember yesterday?
That’s the power of a scenario. As I said last week:
Scenarios are stories about the future that, when taken together, describe a range of plausible future states of an industry, its markets, and a particular business. Scenarios are a tool for dealing with rapid change, uncertainty, and inherent unpredictability. Scenarios are not predictions of the future; rather, they are images of possible futures, taken from the perspective of the present.
Scenarios move us from vague impressions of an ill-defined future state to a tangible, concrete story about what the future might be like. They are stories with characters, context, crises, and conclusions, that we create to make the future feel both understandable and controllable.
In a sense scenarios are like the scrimmages that football and basketball teams hold to prepare for an upcoming opponent. Scrimmages create a simulated game situation that enables a team to experience something very close to what will probably unfold once the real game gets started.
While there are many different approaches to developing scenarios, my personal preference is to follow a three-stage process:
First, begin by identifying the most critical and potentially impactful unknowns—the things you realize you don’t know today that if you did know would tell you how to make effective decisions today about tomorrow (please read that sentence all the way through four or five times; it makes sense to me, but only because I’ve thought through every word).
Second, select two of the most critical of those unknowns – two uncertainties that are essentially independent variables. Each of these two dimensions of the future should have two equally likely but unpredictable outcomes (as far as you can tell at this point; if the opposite outcomes are not equally likely, the variable isn’t really an uncertainty).
Third, once you’ve identified those two critical uncertainties, set up a two-by-two matrix and look at the four possible combinations. Name them, and flesh them out to create four compelling stories that capture four alternative visions of the future.
Developing these scenarios into full-blown stories requires participants to abandon their basic assumptions about the future and to engage in imaginative brainstorming. That’s not always easy for pragmatic executives to do, but playing those “what if” games can be highly engaging and even fun.
Once a set of scenarios has been developed, a meaningful strategic conversation can begin in earnest. Which future scenario is closest to where we are today? Which one will unfold in reality if the key scenario drivers – business trends, regulatory policies, technological innovation – continue their present course? Which “world” would we prefer to be in? Is there anything the organization could do to actually “nudge” the future in one direction or another? What kinds of new competitors could emerge in each scenario?
Facing those kinds of questions, and engaging in collaborative conversations surrounding them, inevitably creates a sense of confidence about the future. Even if your visions of the future present difficult challenges or require dramatic changes in your strategic direction, regaining a sense of what can or could be done to thrive in that future is incredibly energizing.
Just as importantly, the identification of the key uncertainties that produced the scenarios increases the participants’ awareness of what is going on in the outside world. That sensitivity focuses attention on the few critical variables that will eventually determine which vision of the future is becoming most likely. That kind of focus enables an organization to take appropriate anticipatory actions to leverage new opportunities or prepare for future challenges.
I value scenario planning for four reasons in particular:
- The scenarios are tangible, and can be tested against reality as time marches on.
- Creating the scenarios forces participants to get out of their current mindsets and to consider a wide range of “What if?” questions in a non-judgmental way
- The conversations that drive the scenarios help participants learn from each other, and about each other, in ways that few other business activities can match.
- Suddenly the future isn’t so strange or forbidding. You may even feel a sense of “déjà vu” as you move into a tomorrow that not only isn’t unexpected, it’s actually familiar and may even be welcome.
Contact me today to explore how a scenario planning exercise can transform your business and enable you to take charge of your own tomorrows.
Portions of this article were adapted from Chapter 7 of Making Meetings Matter: How Smart Leaders Orchestrate Powerful Conversations in the Digital Age (link is to the book’s page on Amazon.com. However, you should contact me directly for volume discounts). Chapter 7, “Designing and Leading Extraordinary Meetings,” includes descriptions of several distinctive approaches for generating meaningful leadership conversations about the future.
Please call me today (+1 510.558.1434) for a free exploratory conversation about how I can help you design a scenario planning exercise that prepares your organization for an uncertain future. Isn’t it time to upgrade the quality and the effectiveness of all your meetings?