0:29
So that brings us to what's next?
The fourth step is to then write your scenarios.
We've laid out the key uncertainties on that grid.
We've identified what they are and how they might differ and in doing so,
we've identified at least four different possible futures that differ from one
another.
So now what you wanna do is work to visualize and imagine those different
scenarios and here's where you can let your imagination run wild.
Well, maybe not completely wild, but you wanna use vivid descriptions.
You want to try to place yourself in that potential future scenario and
imagine what life is like?
What's business life like?
What are consumers doing given the way you've constructed that scenario?
So again, you wanna focus on things that are plausible.
You don't wanna be way out there, but you do want to embrace
the scenarios that you've created and you really want to get into the details.
Generate details about these potential futures.
One way to do this might be to invent hypothetical newspaper headlines.
What would the headlines be like of the newspapers or
the websites you log on to get your news?
What would those read?
What would that indicate about what the sort of dynamics of life are like
in those different scenarios?
So the key here to really be creative.
And again, as with all the other steps it might be useful
to gain a variety of different ideas and
perspectives from others who might think about things different than you.
They might think about different creative ideas that might manifest
themselves in those different futures Your scenarios.
Another thing you might do you is imagine the evolution of each of these different
scenarios.
You've already sort of establish what the appropriate timeframe is.
Let's say, you've picked 15 years out or 5 years out, whatever it is.
But you might also wanna focus on how things evolve between now and then.
What was that future scenario look like when we're 20% of the way there or
50% of the way there or all the way there?
As you think about this different inflection points or transition points
between the current market and environmental conditions and what those
future conditions might be, that you've identified based on your uncertainties.
It might also help you to understand what it might look like at each step of the way
to get there.
So that's step four is to really use your imagination, brainstorm details and
ideas about what life in those future scenarios might entail?
What might it look like?
And therefore, how might it impact your business?
And that brings us to the last step.
Step is to then once you do all of that, reflect on your current strategy and
reflect on the current strategic decisions you're contemplating making.
And we're gonna use these possible futures,
these scenarios to help us potentially reconsider our strategic decisions.
This might help us see that certain things we were thinking about doing aren't robust
across these different potential futures.
Maybe they're only robust in one of the quadrants but not all four of them and so
you're really sort of asking yourself, how we can get there?
What we need to do to be the kind of organization
that might have a viable strategy in each of those different future scenarios?
How do our current resource allocation decisions hold up across those different
scenarios?
Do those same resources prove to be equally valuable across those different
scenarios?
Do we need to develop certain capabilities further than they exist right now?
So the point here is you're really seeking to identify
opportunities to make your strategic moves more robust.
4:12
Ideally, since we can't always predict the future with complete accuracy.
We've now got a set of at least for each grid you construct,
we've got a set of four different possible future.
And you're trying to figure out, what strategic moves can I make now that might
be robust across all those different scenarios?
And so then look, you'll wanna repeat this process with different combinations of
uncertainties, just because we picked two uncertainties to start with and
we build our grid and wrote our scenarios around those.
Maybe we need to try a couple of different uncertainties and
see if they yield some different insights.
There're maybe more than two uncertainties that might be critically important, so
you might try different combinations of them to see how things evolve and
try to help you imagine those future scenarios and
how robust your strategy is across those scenarios.
Now look, you might decide that you want to make a particular strategic
move that's not robust a crossed all those scenarios.
I mean, it's possible that that might be a risk you're willing to take, but
you should understand that, that's a risk.
That it's risky to try and engage in kind of single point forecasting and
build a strategy around that one vision of the future.
So let's review real quick.
Scenario Planning started with identifying the key strategic issue and
also the time horizon, then you identify key trends and uncertainties.
And we use those uncertainties,
the things that we think might most impact the future of our business.
We use those to construct at least four different scenarios.
The fourth step is to visualize those scenarios in as vivid
a imaginative detail as you can.
Try to imagine what business would be like within each of those potential futures.
And then once you've done that, examine the robustness of your strategies across
all those different scenarios and look for opportunities to make some
slightly different adjustments or slightly different
strategic moves to help make your strategy more robust in an uncertain future.
Michael LenoxSenior Associate Dean and Chief Strategy Officer
Jared HarrisSamuel L. Slover Research Chair in Business Administration
