Scenario Planning for Insights Professionals

crystal ball showing a vision

I recently was reviewing this scenario-planning workshop, not realizing it was run by Carol Shea, of Olivetree Insights. Seeing it, I reached out to her to discuss the importance and relevance of scenario planning for researchers right now. Carol and I have often talked at conferences, and I always learn something from her: she has a 30-year career as a market research leader (PNC Bank, Levolor, Olivetree Insights), as a former advisor to the U.S. Census Bureau, and as an instructor. She and I also served together on the Insights Association IPC task force (she also served on the Research Quality committee).

Jeffrey: Carol, what’s your elevator pitch for getting someone to consider scenario planning?

Carol: “You can’t predict the future, but you can plan for it,” Saji Ijiyemi said. Imagining what’s plausible would help your business build contingency plans based on likely changes– helping you stay one step ahead of the competition. 

Jeffrey: Why is scenario planning especially appropriate at a time like this?

Carol: The coronavirus has rocked our world to the degree that almost everything about our future is uncertain. But so far that has meant leaders are focused on short-term tactics … likely because they are easier and more predictable. But this is the kind of thinking that got us into this mess! 

Scenario planning is a way to visualize how alternative future business environments could evolve to help develop realistic long-term plans. We should take advantage of this unique window of time to anticipate and put contingency plans in place. 

Jeffrey: After reaching out to you for this interview, by chance I saw Ray Poynter present his four scenarios on how the crisis might unfold. Any thoughts on his approach?

Carol: What I love about the scenarios that Ray created is that their basis – control of the virus and economic recovery – represents two key driving forces that need to shape many decisions. The four scenarios he posits allow business leaders to consider how they might react to each one, and where the overlaps exist across multiple scenarios. Those overlaps are the low-hanging fruit for building strategies for handling future risk. Other strategies would be prioritized, with some placed on the back burner – ready to implement if needed.

That said I would still encourage insights teams to create their own scenarios based on the most critical uncertainties within the driving forces of their own industries. For example, if you are a food manufacturer, you might prioritize global supply chain over economic recovery as a key uncertainty, along with control of the virus. The resulting scenarios would be different from those posed in that article, as would be the strategies. 

Jeffrey: What are the basics of developing a scenario plan?

Carol: Scenario planning involves structured data gathering and cross-functional team planning with four primary steps: 

  1. Identify the strategic issue of focus (e.g., impact of Coronavirus crisis, impact of IoT)
  2. Prepare the right cross-functional team and support them with relevant information and insights
  3. Construct alternative scenarios based on driving forces, differentiating between certainties and uncertainties 
  4. Incorporate implications into strategies and plans.

The process seems straightforward because it is. However, it does require an investment in time and talent as well as a willingness to heed the results. It is not forecasting, which is based on extrapolating from the recent past, though both are ways of building organizational foresight. The benefit of scenario planning over forecasting is that it’s a more holistic way of viewing the business environment and thus a better tool for creating strategic longer term plans.

Jeffrey: Why do you think scenario planning is so little used by insights professionals?

Carol: Scenario planning is both a logical and creative process – which makes it perfect for insights pros to lead. I believe it’s not on our radar because in most industries, the majority of our work addresses short-term business decisions (under a year or two). Leaders might say they are future focused but, in reality, they haven’t been willing to sacrifice short-term gains to invest in the long-term benefits of building foresight. 

That said, the business crisis we are in today might open a window of opportunity for insights pros. As Piotr Szymski, Senior Director of Consumer and Media Insights at Heineken, says, “Foresight is more critical than hindsight or insight because we live in a world of disruption, rapid innovation, and complexity.” 

Jeffrey: What would you recommend for researchers who want to learn more about scenario planning?

Carol: There are some helpful books like Scenario Planning in Organizations: How to Create, Use, and Assess Scenarios by Thomas J. Chermack or Scenario Planning: A Field Guide to the Future by Woody Wade. 

But there is no better way of learning than doing. Tell management you’d like to convene a short-term working team to help them plan strategies for beating the competition over the next few years. That should get their attention! Then use the guidelines in the books or hire a specialist to teach you the ropes while guiding the first session.

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