Scenario Planning

Scenario Planning is one of many tools in the strategic planning arsenal. It is particularly well suited to the high tech industry where the market changes rapidly and strategic plans need to adapt to changing circumstances.

Outcomes

The concrete outcome from scenario planning is a set of plausible future scenarios that can be used to evaluate opportunities and directions. Some groups go further and identify a few key external metrics that they monitor for early warning signs of changes in the market.

The less tangible benefits are even more valuable. Scenario Planning is more of an intuitive than a purely analytical tool and I’ve found that it is extremely well suited to tapping into the wisdom and experience of your team. People find the process fun, which means they get more fully engaged. The Scenarios are mini-story lines, a format that is very helpful in encapsulating and managing complexity and uncertainty — hallmarks of most high tech markets.

Scenario Planning also creates a space for deeper thinking about the market. I often find that the process produces moments of "Aha!" when people gain a new insight into the market, their customer, or their competitors. It encourages people to think longer term and to anticipate unexpected developments. Several clients have said that a lasting impact was the increased level and quality of strategic thinking that the team brought to daily operations.

How I Work

As with all consulting engagements, I start with an exploration of the outcomes you’re looking for. Scenario Planning may or may not be the right tool for you. Once we’ve defined the goals and determined that Scenario Planning is the right approach, I start by working with you to identify the external forces that have the biggest impact on your business, are outside your control , and are inherently unpredictable.

We next identify the range of possible developments for each force. For example, we know from historical analysis that over the past 30 years semiconductor sales have grown at an average rate of 17%. That doesn’t tell us what the growth rate will be for each of the next 3 years. You need to be prepared for a range of developments in the external world.

Using these external forces, we construct 3 or 4 Scenarios, plausible story lines of what the market might look like over the course of our planning horizon. The process of creating the story lines is usually quite engaging — stimulating a lot of creative thinking. As the work is progressing, team members play out various possibilities and generate new strategic options.

Once the Scenarios are completed, we move into the evaluation of strategic options. How would each option play out in each Scenario? How can we adjust the strategic plan to make ourselves more resilient to the changing forces around us?