Executive Tools
- Executive Summary
- Self Assessment Checklist
Expert Practices Articles
- Scenario Planning: An Introduction
- Scenario Planning: The Process
- Benefits of Scenario Planning
- Telling Stories
- What the Future Might Look Like
Book List: Scenario Planning
Request
the Entire Best Practice Module: Scenario Planning
CEO Best Practice: Scenario Planning
Executive Summary
- Scenario Planning: An Introduction
- Scenario Planning: The Process
- Benefits of Scenario Planning
- Telling Stories
- What the Future Might Look Like
Scenario Planning: An Introduction
"Scenario planning isn't the same thing as strategic planning,"
says Vistage speaker Gideon Malherbe. "Basic strategic planning
tends to address the accidents of the day, such as the decision
to reduce inventory because of a downturn in the economy. Scenario
planning looks at what's going to happen tomorrow. It's focused
on understanding what the future will look like, so that CEOs can
build their organizations accordingly."
Fellow Vistage speaker William Poppei agrees: "With scenario
planning, we encourage business leaders to imagine not just one,
but a variety of future possibilities. When I meet with CEOs and
other senior executives, I tell them, 'Take your imagination out
of the corral and let it fly!'"
The Vistage experts stress that scenario planning is an outstanding
learning tool -- a way to learn about the future through a deeper
understanding of the major driving forces affecting all of us today.
In a group setting, executives engaged in scenario planning exchange
knowledge and ideas, constructing a selection of "future stories"
that expand their understanding of the current business environment
and broaden their perception of future events.
"Driving forces," the most significant trends likely
to affect the larger world, generally represent four categories:
Request
the Entire Best Practice Module: Scenario Planning
Scenario Planning: The Process
The basic approach in scenario planning is two-fold, says Malherbe:
- Know your core competencies. The starting point for any future
thinking is knowing your strengths as they exist right now. Know
as well your organization's strategic advantage in the marketplace.
- Identify forces and trends. Has your company taken the time
to seriously pinpoint forces that affect your financial performance
-- now and in years to come?
"In some industries, the driving forces are obvious,"
Malherbe says, citing, for example, the dominant influence of political
and environmental sentiments on the forest industry. In the coming
years, what if the environmental lobby becomes stronger or, conversely,
less influential?
Poppei strongly urges participants to think out-of-the-box. A key
to his approach is giving people a fundamental change to think about.
"A good example is the Internet, which facilitates communication
to and from any locality in the world," he says. "Now
we don't need central meeting spaces any longer. How is your business
different when all your customers and suppliers, as well as your
competition, is in the same room and can talk to each other at the
same time?"
Other guidelines to constructing scenarios:
Request
the Entire Best Practice Module: Scenario Planning
Benefits of Scenario Planning
"The goal of scenario planning is opening up the mind to hitherto
unimaginable possibilities," Malherbe says, "while at
the same time prompting business leaders to question their own basic
assumptions about how the world really works."
Adds Poppei: "As a result of imagining different scenarios,
the organization can more readily recognize warning signs as they
unfold. By rehearsing different versions of the future, business
leaders are better prepared to handle new situations as they arise.
They've already examined options for actions that offer effective
strategies for the future."
Other benefits of scenario planning:
- Inspires a sense of urgency about the future
- Promotes proactive leadership initiatives
- Offers a forum for CEOs and senior management to communicate
their vision to different stakeholders
"By postulating different views of where your business is
headed, you gain a sharper sense of the environment you're working
in now," Malherbe notes. "It's a great way to avoid being
overly conservative in your thinking. You don't want to limit your
organization's potential in today's competitive marketplace."
Through scenario planning, a business can take these pro-active
steps:
Request
the Entire Best Practice Module: Scenario Planning
Telling Stories
An effective "future story" also offers these advantages:
- By highlighting future warning signs (i.e., a competitor's technological
innovation or a sudden drop in the stock market), a business can
avoid surprises and be better prepared to adapt and act effectively.
- New strategies derived from future stories have the potential
to create distinct competitive advantages.
- Generate ongoing high-level discussions about the future.
Poppei suggests starting with a frighteningly basic question: How
would you plan for the five-year failure of your organization?
"Ask people in the company how they might go about destroying
the business," he says. "Employees won't believe you're
serious, so they won't think they actually have to do any of the
things they propose. As a result, they won't limit themselves, and
will give you their best ideas. After all, in their minds, the exercise
is just fun. They will suggest all kinds of possibilities. And that's
exactly what you want!"
Request
the Entire Best Practice Module: Scenario Planning
What the Future Might Look Like
"A forward-looking organization must devote resources to projecting
new core competencies, new product development, new industry alliances
and so on," Poppei says. "This isn't the same as restructuring
and reengineering. This is consciously and deliberately exploring
the outermost boundaries of what may lie ahead."
Toward that end, the Vistage experts suggest asking questions like:
- Who will our customers be five years from now?
- What channels will we use to reach these customers?
- Are our short-term priorities aligned with our long-range goals?
Request
the Entire Best Practice Module: Scenario Planning
|