Whether it was the real-life royal wedding between Prince Harry and Meghan Markle or a fictional one from one of our favorite British shows, such as The Crown or Downton Abbey, the British know how to throw an event. Nothing exemplifies this more than a royal wedding, which takes typical wedding pageantry to another level entirely. Every detail is carefully planned, and every contingency is considered. These variables and the subsequent plans derived from them are, in fact, the basics of what is known today in business as scenario planning (also called scenario analysis). The process was developed in the 1970s by the Shell Group to not only help make tangible the choices and trade-offs in strategic planning, but also to “plan forward” while examining and planning for key risks. As we look to the year ahead, I cannot think of a better topic to cover, because while folks are shifting back into strategic planning, they are still being mindful of possible risks ahead.
Scenario planning is a tool that encourages organizations to consider the uncertainties and trends that may affect them in the future. By charting a plan to prepare for those situations, an organization can help ensure positive outcomes, even in the face of challenging uncertainties. Scenario planning is frequently used to help organizations imagine extreme events and prepare for whatever materializes. Unsurprisingly, it is widely used in the military to prepare soldiers for combat and has increased in popularity in the corporate world since 9/11. While popular in preparing for extraordinary events, scenario analysis is also a great strategic planning tool. Here is a quick synopsis of the steps involved:
Like the British royal family with their subjects, stay attuned to trends affecting your clients and organization. For social sector organizations, this means inventorying demographic trends, policy changes, growth of competitors and other shifts in the industry to create a picture of what the future can hold. Because so many variables have changed over the past two years, we recommend all social sector organizations complete this first step as a valuable exercise for future executive team or board meeting.
For royal events, planners are thinking through all types of events that could pose a risk to the festivities – the chance of rain, the possibility of health issues and even security threats. Similarly, you should have a thorough discussion about how the uncertainties and trends you identified could impact your organization and clients.
While it is impossible to control the future, nonprofit organizations can take steps to shape it. Take a cue from Prince Harry and Meghan, who anticipated that an adoring public would want to shower them with well-meaning but unnecessary wedding (and baby) gifts. As a result, they asked that donations be made to their favorite charities in lieu of gifts. As part of your scenario analysis, consider which uncertainties warrant intervention. Then, help shape policies that could improve conditions for your clients (e.g., lobby politicians for legislation or take a leadership role in coalitions developing local strategic plans).
Finally, use your scenario analysis to monitor events as they unfold, and adjust your course accordingly. This tool is designed to help your organization prepare for the road ahead, so utilize all the preparation and lessons learned from scenario planning to give your organization the greatest flexibility and responsiveness.
As the British like to say, keep calm and carry on. In this case, we recommend you keep calm and plan on! We hope you feel as empowered as the Brits to use scenario analysis in your next planning process to best prepare your organization for whatever highs and lows lie ahead. If you utilize scenario planning, please let us know and share your tips with us and our readers.