85% of organizations have accelerated or plan to accelerate their use of contingency and scenario planning. This was among the findings of APQC’s Reactive to Proactive: The Next 90 Days survey regarding how organizations are responding to the Covid-19 pandemic. Research from Bain & Company, however, indicates that prior to the pandemic, organizations were using scenario planning less and less (yet those using the technique were finding value in it).
To get a refresher on scenario planning, I conducted an email interview with NASA’s Special Advisor for Talent Solutions, Dan L. Ward. He explained how scenario planning helped NASA respond quickly to the pandemic and described how organizations can use it now—to respond to the pandemic and be better prepared for future disruptions. Dan L. Ward will be sharing more with APQC members on our July 23rd webinar: Scenario Planning Fundamentals: Illuminating Possible Futures.
Since the onset of the Covid-19 pandemic, there has been renewed interest in scenario planning. For those of us who need a refresh, could you explain what scenario planning is?
Dan L. Ward: Scenario planning is a technique we can use for organizational role playing. Peter Schwartz, the father of contemporary scenario planning, suggests we use it to better position ourselves for eventualities we cannot precisely predict. We use a team to ask “if tomorrow looks like X, how will we adapt? If it looks like Y, what would that mean? What would need to change? What could we build on? What would need to stop?” You might think of it as being similar to good leaders planning for an upcoming tough conversation by considering ways to respond to different types of employee reactions.
How does scenario planning help organizations respond to major disruptions like the pandemic? What benefits does scenario planning offer organizations in this context?
Dan L. Ward: Organizations have a strong tendency to drift into group think. They learn what has worked well in the past and can even become complacent. Scenario planning challenges an organization’s mental model and takes it outside that comfort zone. Like a skilled athlete changing up a workout routine—scenario planning exercises new muscles and stretches us in new ways.
We live in a VUCA world, (Volatility, Uncertainty, Complexity and Ambiguity). We can use alternate scenarios to zero in on potential game changers. This thinking helps us preposition for rapid response. If you search for examples of scenario studies that dealt with pandemics, there are a number built after the SARS and H1N1 epidemics. Those organizations were better able to adapt.
No one at NASA predicted a COVID-19 case as severe as what happened, but we had previously considered a variety of work situations that might require employees to work remotely for extended periods of time. We understood there were a variety of circumstances where the ability to effectively work remotely could become critical to future mission success. We implemented periodic “work from away” continuity tests over the past few years to ensure we had both the infrastructure and teaming capabilities needed to work together remotely. Our scenario-inspired work-from-away drills over the past few years were a major contributing factor to how quickly we adapted when we needed to reduce our in-office presence.
For organizations that are using scenario planning to respond to the pandemic, can you share some key success factors for effectively using the technique?
Dan L. Ward: To be effective, scenario planning needs people who represent different business and social perspectives. Scenarios should be relevant to the business, but not simple extrapolations of business as usual. The team identifies the study focus points and their compelling influences. They zero in on a few scenarios and flesh them out. They develop good narratives for the chosen scenarios. To be effective, scenario studies must stimulate out-of-the-box thinking. The end game is not just to have good documents. They need to be engaging stories that stimulate thinking and action that better positions the organization for whatever comes next.
Deloitte released their World Remade by COVID-19 study in April 2020. It’s available for download on their website and is a good example of an effective use of scenario planning techniques. A good starting point for many organizations might be to review the Deloitte study and think about the implications for their own organization if each of these scenarios were to become the new reality.
How can organizations use scenario planning to be better prepared for the next disruptive event? How can they make scenario planning an ongoing practice?
Dan L. Ward: The benefit of scenario planning is not in trying to precisely predict the future, but in being a tool to help us see multiple alternatives. We want to position ourselves better to take advantage of opportunities we cannot possibly foresee in detail. It is all about improving organizational agility and improving positioning. Too often, people think in terms of contingency plans—Strategic Plans On Top Shelf (SPOTS). Scenarios should really be a call to action that results in subtle or even major positioning adjustments.
Formal scenario planning is most effective for anticipating the longer-term—ten or more years out. If we are looking at a window of less than five years, then vignettes might be more cost-effective. A pandemic scenario study for a pharmaceutical might look at different ways the world might respond to successive waves of epidemics. A vignette might be what would be the implications of learning that a competitor’s preventative treatment for head lice offers immunity for COVID-19.
I have read about scenario planning being used in workforce planning. How can scenario planning add value to workforce planning?
Dan L. Ward: Workforce planners bring insights about the shapes and patterns of the current and evolving workforce and their implications for the future. Most scenario planning is led by business strategists or technologists. Their opinions about the workforce are sometimes naïve and unencumbered by facts. Workforce planners bring the benefit of their experience and insight to the table. We translate the implications of different scenarios into specific people strategies, e.g. how would this scenario change the way we execute the three R’s of HR—recruiting, retaining, and releasing?
President Dwight Eisenhower once said: ”Plans are useless, but planning is indispensable.” One of the greatest values of scenario planning for workforce planners is in creating an internal network of cross-functional people who are thinking long-term about the future. This informal network will bring a return on investment long after the study is done.
APQC members can learn more about scenario planning from Dan L. Ward on APQC’s July 23rd webinar: Scenario Planning Fundamentals: Illuminating Possible Futures.
Register today to get:
- an overview of the scenario planning approach,
- examples of impactful scenario studies,
- examples of variations to traditional scenario planning—including using vignettes, and
- tips on useful scenario planning resources