Seven Lessons for Scenario Planning

FSG scenario consultants are often asked about the important things we’ve learned over more than two decades facilitating scenario planning projects. So here, in brief, are seven scenario planning lessons we wish to impart, after working across many industries and sectors. Readers are encouraged to share their own experiences in the comments section or contact us directly with insights or questions. 

Lesson #1: Be really clear on your scenario planning goals. 

This seems obvious but too often goals are not nailed down in advance of the actual scenario project work. Clear goals are key. From the goals statement all key project details flow: research, scenario time horizon and scope, budget, milestones, personnel, deliverables and more. Development of forward-looking strategies and plans are often an implied objective of scenario work, but if so this needs to be formally captured in a statement of work or project charter. It’s also true that some scenario exercises have very different, non-strategy goals, frequently related to innovation, executive alignment, or talent development. These too should be clearly articulated. 

Lesson #2: Make sure the boss is on board…and engaged.

Active executive sponsorship of, and engagement in, a scenario planning process is a fundamental element of project success – especially so if the intended output is strategic in nature. Executive sponsorship provides project legitimacy, access to top talent and, ideally, and a reliable path to action for strategic concepts that emerge out of the scenario process. Senior leadership engagement – through interviews, scenario selection, strategy workshops, and implementation planning – engenders a sense of ownership of project outcomes. Engagement needs to be as regular and persistent as executive calendars allow. Without it, even the most brilliant scenario strategy efforts risk becoming mere shelfware. 

Lesson #3: Scenarios are not about you – they are about the future(s) in which you will operate.

One fatal mistake you can make is to develop scenarios about your organization. With your organization as the focus, you will never think creatively about future needs. Instead you will find that your scenarios are all just “variations on a theme,” and the theme is your organization’s strengths and weaknesses as they are right now. A more rigorous approach, albeit more demanding, is to craft scenarios about the future operating environments you may face (see Lesson #3 below). Initially, your organization should never be mentioned; in fact in the scenario-building stage it is typically unwise to even specify operating conditions in your sector. Of course, the scenarios must address all the trends and issues that are critical to your organization – and address them differently in each scenario. The point is, you want to be able to “walk into” those futures, evaluate the opportunities and constraints you will face, then re-invent your organization to succeed in that scenario. It is one of the few opportunities you will ever have to consider alternatives to your current business model.

Lesson #4: Create compelling scenarios that challenge conventional wisdoms. 

Scenario planning end-states should be set far enough beyond an organization’s strategic planning horizon. So, for example, scenario cases for a five-year strategic plan should be a set 10, 15 or more years beyond that to help planning participants to imagine fundamentally different strategic challenges (and opportunities) in their operating environments than they are experiencing today. As a set the scenarios need to capture all significant – and plausible – trends, events and disruptions that are important for an organization to contemplate and in some way plan for. This will make some planners uncomfortable at first, but the end result will be more forward-looking and challenging strategies that hopefully help avoid failures of imagination. Finally, scenarios should not specify industry-specific operating or competitive conditions. Those are best left for workshops participants to explore and debate. 

Lesson #5: Leverage your scenario planning investment in multi-day workshops. 

Scenarios are only the tool for developing strategies; they are not ends in themselves. So it is important to derive maximum utility from them in one or more workshop sessions. Scenario workshops should not normally be shoehorned into a single day; immersion in the scenario world itself consumes an entire day. When the strategic context is constrained (e.g., a single industry, domestic US), a two-day workshop commitment is acceptable. For large, global organizations, however, we recommend three days. Scenario workshops are uniquely demanding. They involve immersion in the scenario world characteristics; building scenario-specific business models; drafting strategy statements; and subjecting nominated strategies to cross-world evaluations. Finally, scenario workshop can be designed to address organization-wide strategic challenges or more narrow functional areas like personnel and talent development, which was one of several areas of focus for FSG’s work with the US Coast Guard in Project Evergreen.

Lesson #6. Manage expectations around scenario planning project completion.

As we’ve written previously, after the workshop exhilaration subsides it’s essential that there’s no significant seepage of project focus and energy. The workshop is the climactic experience, but it is not the end of the scenario journey; considerable strategy refinement and implementation work is still to be done. The extent depends on project goals and objectives (as in Lesson #1 above). For scenario-based strategy undertakings, the tasks of strategy refinement and implementation planning will involve wholly new groups of participants, including subject matter experts who have not previously been involved in the process and will need to be oriented to it (and in some cases “won over.”). Sometimes corporate boards are involved in strategy synthesis and implementation planning. Moreover CEOs and managing directors will – understandably – expect a seat at the table when strategy prioritization is debated. Securing the ongoing involvement of these various stakeholders is time-consuming and demanding, but essential to project success.         

Lesson #7. Err on the side of inclusiveness. 

This applies to both the scenarios and the people recruited to contribute to the full range of scenario planning tasks. Scenarios need to comprehensively cover current and emerging conditions, even if some of the issues uncovered seem irrelevant or remote. Years ago, a transportation infrastructure client questioned the relevance of climate change as a driver of potential disruption. Fortunately, they ultimately agreed to incorporate environmental conditions into their scenario set. Inclusiveness also applies to recruitment of members of the project team. Paradoxically, team members should not all necessarily be left brain, strategic “big picture” types. It’s important to have, for example, budget and finance people and classical operator types onboard. They, after all, will eventually be the ones responsible for getting the strategic stuff done.   

Beyond these seven lessons…

Ideally, the scenario planning process should not end when the project strategies, plans or other deliverables are completed. There are many benefits to building and sustaining a foresight team. It’s logical to start with the scenario project principals who have accumulated scenario knowledge, experience and hopefully passion along the way. Initially, the foresight team’s main role might well be overseeing strategy implementation progress and organizing annual or semi-annual strategy reviews. They may also get involved in horizon scanning – tracking external trends and events, in particular those that could disrupt current plans. Previous foresight teams we’ve worked with have also taken the lead in innovating scenario applications for functional units (e.g., human resources) and for executive development. This is just a small sample of the ways in which ongoing foresight activities leverage the extraordinary value of scenario planning.