Blog Topic | May 19
The most frequently asked question I get from clients is “what do you think things will look like when we come out the other side of Covid19?” My answer is pretty much always that I have no idea. So, the question remains. How do we develop an understanding of what things may look like after a disruption? Without that knowledge positioning yourself and your business for success is merely a stab in the dark. That’s where scenario development and planning can help.
Put simply scenario development is about thinking of a possible set of circumstances that may exist at a future point in time. The challenge is to not get overwhelmed by the countless number of variables that go into each scenario. So, simplifying the process is critical.
The first step is to think about or brainstorm all the possible variables you can think of. You should have no trouble coming up with 30 to 50 different things that could influence what the future will look like. When I did that recently with a client, we came up with over 40 variables that might have an affect on their business in twelve months’ time. Some of those variables included:
There are many, many more variables to consider and it’s amazing how they start to come into focus when you put your mind to them. However, our task is to simplify the process, so we decided that we only wanted to map the two most influential variables to develop our scenarios.
We chose:
Then we map those two variables on a matrix:
Mapping on a matrix gives a visual representation of the possibilities based on the variables you have identified as the most critical. For example, from the model, if the scenario of low government control and high customer spending capacity occurs it is reasonable to expect demand to increase. How do you take advantage of that situation? How do you position yourself, your team and your business model to ensure any opportunities that exists are taken advantage of?
If you feel there is more to the story you can do a second matrix using the next level down of variables that you have identified. The second matrix may help you decide the optimal actions to take that will help you take advantage of what you consider to be the most likely scenarios. It will also confirm that your original matrix identified the main characteristics of what you expect the future to look like.
Using the matrices you have built decide the probability of each scenario occurring. Doing this will quantitatively allow you to see where you believe things are headed and hence, allow you to develop actions that you need to perform to take advantage of the scenario and mitigate the risk scenarios pose.
Some actions that might need to happen are:
Once you have exhausted your imagination on the actions needed pick the most important three, in your opinion, and make plans to complete those three actions. Set a timeline and who is responsible for completing each action. Review after a set period to ensure implementation is occurring.
Predicting what is going to happen in the future is difficult but massively important to any business. Having a plan and understanding it and how it is linked to whatever scenario plays out can not only ensure your business doesn’t simply survive but thrives as the future evolves. Moulding your plans to the probabilities of the scenarios you have developed occurring ensures that you are ready for whatever eventuates.
Always happy to help anybody with the process. Contact Us