Scenarios, in simple terms, are possible and plausible pictures of the future. Within the corporate world, scenario planning (also known as scenario mapping, reality mapping or design mapping) is a method used by organizations to collaboratively develop, discuss and communicate possible outcomes and solutions around different business scenarios.
Large multinational companies have pioneered scenario planning to reveal connections between strategic planning, risk management, leadership development and innovation. Thus, scenario mapping helps organizations “think outside of the box” by challenging the industry status quo and by tapping into your team’s creativity and understanding of future business opportunities.
What is Scenario Planning?
Scenario planning (or mapping) is a strategic planning technique that explores multiple potential futures. It allows you to stress test plans and build robust strategies across a range of scenarios – from best to worst case. With scenario planning, you can turn uncertainty into an advantage.
How Scenario Planning Works: 5 Key Steps
Scenario planning brings together key stakeholders to analyze driving forces, make assumptions about uncertainties, and map out scenarios. It involves five key steps:
- 1. Identify driving forces – These are key macro factors like technology, regulations, and consumer preferences that shape your business landscape.
- 2. Map out critical uncertainties – Pinpoint the uncertain elements that could play out in different ways.
- 3. Build scenario narratives – Craft compelling storylines of potential futures, both optimistic and pessimistic.
- 4. Develop strategies – Formulate plans that account for different scenarios. Identify flexible moves.
- 5. Track early signals – Monitor leading indicators to adapt plans as the future unfolds.
Why Scenario Planning Matters
In an increasingly volatile and ambiguous environment, scenario planning helps leaders:
- Widen perspectives – Considering diverse possibilities opens up thinking and questions assumptions.
- Uncover blind spots – Scenarios highlight risks and opportunities which may be missed.
- Build agility – Developing flexible strategies creates organizational responsiveness.
- Anticipate change – Tracking signals allows proactive adaptation ahead of competition.
While you can’t predict the future, thoughtful scenario planning allows you to navigate uncertainty and thrive in any business environment.
So bring your leadership team together, have robust debates on driving forces, get creative on scenarios, and stress test your strategies. Eventually, you’ll emerge more confident and ready to pivot as the future unfolds.
Steps to Apply Scenario Planning to Your Business
Although scenarios can be documented using many different methods (e.g. storyboards, reports, videos, etc.), scenario mapping usually takes the form of a highly structured workshop. If you’re wondering how to get started or what scenario mapping entails, the following are a few best practices for conducting a successful meeting.
1. Determine If Scenario Mapping Is the Right Method to Use
Prior to planning a scenario-mapping session, determine whether your organization’s situation or business issues meet the following conditions:
- The given situation has a high level of complexity that presents unique challenges and obstacles.
- The given situation has a long-term focus that requires planning at least a few years into the future.
- There is uncertainty about how external environmental factors will impact the given situation.
- Your organization has the necessary resources to hold multiple discussions involving different stakeholders over a period of time, and it can distribute the outputs from those sessions throughout the organization.
If your business issues meet these qualifications, then scenario mapping can be an effective technique for building stories that lead to smart decision-making.
2. Reserve the Appropriate Space, and Invite the Right People
If you’re a software company, your scenario-mapping session might involve the professionals who help create your customers’ user experience. This group of invitees would include graphic designers, software developers, web researchers and/or marketers.
Additionally, in order to get a good representation of organizational knowledge, ideas and experience, keep the number of people manageable, ideally between three and five participants. This will make it easier to capture insights and facilitate discussion throughout the session.
3. Start Posting Sticky Notes
There are several ways to develop scenarios, but one common method is taking into account factors such as control (i.e. your current situation or something you’re familiar with) and uncertainty. From there, participants in your scenario-mapping workshop can start using techniques to decide on preferred scenarios that expand on key uncertainties.
For example, if your organization is considering doing business internationally, one of the uncertainties your business might attempt to plan for would be economic growth. Participants could start discussing scenarios that would emerge in the event of high or low economic growth in a particular country.
On your sticky notes, jot down who the specific players are and what they might do in the given situation. Be detailed, as you’ll want to evaluate the different components of a given situation later in the session. You’ll also want to record any questions or assumptions that are revealed in each scenario, as well as standout ideas and suggestions presented by participants.
4. Map Out Your Steps Visually
As you write down your scenario, keep in mind that you’re mapping out the business steps, roles, goals, market forces and organizational needs that play out in the given situation from start to finish. Line the sticky notes horizontally (from left to right) so they’re clearly “mapped” out for the group in a way that’s logical and visual.
Participants can also identify events that are common across multiple scenarios versus events that are unique in single occurrences. Whereas common events will alert participants to scenarios where market players have a stake, unique events can reveal situations that are high-risk but have the potential to produce significant revenue or growth.
5. Determine Possible Actions for Future Scenarios
Analyze scenarios with your team that usually contain both controllable factors and major uncertainties. Decide what options your organization has in each scenario. Explore what is possible and map solutions to each of the scenarios you outlined.
6. Make Decisions, and Distribute the Results
The last stage of your scenario workshop should develop an action plan. Base it on the mapped scenarios. Include responsibilities for participants. Also, include your organization’s options per outlined scenarios. Eventually, implement the actions. Monitor their success and failure. Repeat the process if needed throughout your organization.
Scenario planning can help your organization explore various outcomes and their implications, rather than the “most likely” outcome based on current conditions. The method also crowdsources business knowledge from stakeholders across your organization and effectively harnesses resources for strategic decision-making. This is what makes scenario mapping powerful: it forces individuals to step outside of their own experiences and interpretations of the world, and it allows them to incorporate outside experiences and perspectives into the business dialogue.