Nine Common but Bad Pitfalls of Scenario Planning

"Change is the law of life. And those who look only to the past or present are certain to miss the future." said John F. Kennedy.

Right. But how?

If you'd ask a futurist or a strategist, fat chance that they'd say: Scenario Planning. However, scenario planning is not for everyone and often taken too lightly. I don't want you to waste time on a suboptimal proces (read: waste of time and money), so here are nine common pitfalls to help you.

What is Scenario Planning? Scenario planning is a mental time machine, allowing you to experience potential futures and arm yourself with strategies for whatever reality throws your way. It's like the training drills before the game.

When Do We Embark on Scenario Planning? You typically engage in scenario planning when you develop or review their strategy. In rapidly changing industries like high-tech, scenario planning is an ongoing process. In stable, less dynamic industries, you'd engage in scenario planning once every three years, with a quick yearly update in between.

Why Should You? B Scenario planning can help you foster and maintain innovation, identify new opportunities, react to potentially disruptive changes and develop strategies that anticipate change. Sure it takes time, but if done right, the rewards are almost guaranteed. 

So what's scenario planning in a nutshell? Put simply, it’s looking at various potential outcomes of an event or decision based on current trendsesides being a welcome break from PowerPoint marathons 😉, scenario planning helps you manage market uncertainties and -when you involve your people- hones your organization's adaptability and resilience. It's an intellectual workout that strengthens your corporate strategy muscles, without the need for protein shakes.

During the Prep Stage

The prep stage refers to the, well, prepping, before the work starts 🙂 

• Pitfall 1: Underestimating the time it takes 

Interestingly, the need to prep is not so evident... Organizations take three to twelve months to engage in in-depth, multi-scenario planning. This involves collecting a lot of information, brainstorming possible future scenarios, and planning responses to each one. Such an investment is only justified when your organizational environment is changing in multiple, sometimes unpredictable ways, and/or when changing fast. In slower evolving environments, you'd better opt for scenario planning lite or not do it at all!

During Horizon Scanning

Horizon scanning refers to searching for emerging developments that are likely to impact your organization in the future. Scanning has three main pitfalls:

• Pitfall 2: Not considering key developments

Many organizations fail to adequately consider the role of key developments in their scenarios because they stick to the obvious industry-specific trends. To stay ahead, be intentional about embracing meaningful advancements beyond your industry. Seek out significant emerging changes in the political, economic, social, technological, legal, and ecological domains that are relevant to your work.

• The Pitfall 3: Focus on what you see happening in the present

Organizations often rely on the developments that already impact their industry or target customers. Those are easy to find, often already on the radar, and obscure the developments with future impact because the latter feel less urgent.

Instead, you can prioritize developments based on their future impact on your organization. For instance, while both changing customer preferences and societal change are happening now, the latter is likely to affect your organization at a later stage because it's not immediately changing all customer needs and behaviors or changing them in the same way.

During Scenario Construction

Scenario construction refers to determining the axes of the scenario matrix.

• Pitfall 4: Choosing between developments to reduce information overload

Many organizations choose the developments that they think have highest uncertainty and impact, with the risk of choosing the wrong ones. You can avoid that by synthesizing relevant developments first, until you have two or three main groups. Give each group a title and use those for scenario construction. Use the singular developments that didn't fit into a group in the next stage, during story development, so that all developments are included.

• Pitfall 5: Taking developments at face value

Scenarios that aren't constructed thoroughly can lead to a limited understanding of possible outcomes. Spend time developing each scenario, considering all possible effects and consequences. For example, if you're exploring the future of remote work, consider not just the technological requirements but also the implications for employee well-being, productivity, and company culture.

During Scenario Story Development

Story development refers to fleshing out the scenario plots with your stakeholders and their future needs and behaviors.

• Pitfall 6: Sloppy stories

Many organizations fall into the trap of creating scenarios that are vague or too complex. This lack of clarity can lead to confusion and misinterpretation. Ensure your scenarios are clear, concise, and easy to understand. Use simple language and avoid jargon. For example, if you're assessing the impact of AI in your industry, clearly define what you mean by AI and its potential applications.

• Pitfall 7: Wishful thinking

Organizations often favor or choose the scenarios that align with their existing beliefs or strategies, disregarding alternatives. Staying with what you already believe sort of destroys the purpose of scenario planning (to look beyond what you know), and I fervently wish for you that you challenge your preconceptions and be open to unexpected scenarios. Use data and evidence to guide your scenario development, rather than relying solely on intuition.

During Scenario Integration

Scenario Integration refers to using them daily for decision-making, strategy, innovation, marketing, business development, and organizational culture.

• Pitfall 8: perceiving scenarios as finished 

Some organizations treat scenario planning as a one-time exercise, failing to update their scenarios as circumstances change. Regularly review and update your scenarios to reflect new information or changes in your environment.

• Pitfall 9: believing in your scenarios

Organizations often view scenario planning as a predictive tool, rather than a training drill. But the future is just too complex to predict, so never forget that what you think will happen probably doesn't. Embrace scenario planning as a way to learn about the future and challenge your assumptions. Remember, the goal isn't to predict the future accurately, but to prepare for it effectively.

Scenario development can be a challenging journey, but fear not! By staying mindful of common pitfalls and taking preventive measures, you can craft robust and insightful scenarios. These scenarios will power your strategic decision-making and prime your organization for a successful future.

Remember, the future isn't a force that acts upon us; it's a canvas we can paint and an opportunity we can seize, starting with our scenarios. 

Let's create the future we desire!

Resources

• Review the posts listed in the scenario planning collection (free)
• Take the Scenario Planning Sprint course (€ 15)