Scenarios and scenario-based planning are widely recognized as valuable tools in setting organizations’ visions and strategies. Shell is the most famed for its scenarios and their process for developing them and using them. But they are far from alone. Many of the leading companies around the world use them, including Apple, GE, Disney, British Airways, Boeing, Mercedes, and the list goes on. Governments do as well, even more extensively than the corporate world. In their annual survey on the management and planning tools used by thousands of companies around the world, Bain and Company show a consistent and deserved popularity of scenario planning.
Those who know scenario planning know that its value isn’t in “predicting the future.”
Indeed, that is practically the antithesis of the idea. The value is as much cultural as it is practical for the organizations that do it, and the cultural benefits are what enable the practical benefits. The process of developing scenarios opens and trains the minds of company leaders to consider and prepare for multiple alternative futures, not “the” future. It fosters a willingness and ability to challenge assumptions, about the external environment and sometimes even more importantly about the organization itself. It creates a level of comfort and confidence in considering novel, disruptive events and ideas, and in asking “what if” questions that wouldn’t be asked in other organizations.
These ways of thinking that scenario planning cultivates are among the most important attributes of successful leaders. And leaders who hone them this way are able to put them to work to deliver the practical value of scenario planning. That comes in the form, for example, of quicker development and deployment of innovations. It comes in the form of investment decisions on potentially profitable opportunities that the process has enabled them to foresee.
Wouldn’t it be even better if we also used scenario planning to identify who in the organization has these kinds of leadership attributes before they are leaders? Some companies do. Making the process broad-based and highly interactive, involving people from every level of the company from top leadership to the more junior, and across functions, creates an opportunity to identify the future leaders. They’re the ones that demonstrate the boldest and most imaginative thinking in devising the scenarios. They have the greatest comfort with the ambiguity of alternative futures. They show the greatest facility with recognizing trends in the external environment that will be major factors in the company’s planning because they have an impact across multiple scenarios.
The process can be designed purposefully as a laboratory for bringing employees at different levels together to show how creatively they can think about the future. Skillful facilitation can bring these attributes to the surface in employees who might not have other opportunities to demonstrate them to company leadership. It doesn’t only produce better insights and results from the strategy and planning process. It also increases the return on the investment. The same time, budget, and other resources spent to produce the scenarios and the resultant strategic plan also are advancing the company’s leadership development objectives.
The smartest organizations will take that a step even further. Put the people who show the greatest nascent talent in your scenario planning process on a track of additional, accelerated leadership development. Giving them opportunities to continue strengthening these attributes will benefit the company in numerous ways. It may even identify and prepare the employees who should sit and work in the C-suite as part of the top team.
