What is scenario planning?
Scenario planning is used to help assess uncertainties in your external environment which allows you to open choices for the future. It involves making assumptions on what the future is going to be and how your operating environment will change over time.
Scenario planning helps you stimulate new thinking and explore uncertainties. Instead of focusing just on what you do know, you invest time on what you don’t know. Often, as a result, you end up being more certain about the future.
It can be used when you need to make sense of your future operating environment. This may be as part of a strategy exercise (see for example Brook’s use of scenarios), but is also helpful when something changes and the organisation faces a challenge or barrier.
Why use scenario planning?
Scenario planning can be used both to look generally at what might happen in the environment – eg the economy – and to help think specifically about how an organisation might fare within that particular environment.
Developing scenarios can help you understand the dynamics of change and makes the future more tangible and less frightening. When an organisation understands possible changes, and can put them in context, it is in a far better position to protect itself against possible threats.
Steps for scenario planning
There are three steps and some questions which can help you develop and plan scenarios for your organisation. NCVO have also listed considerations for any organisation embarking on scenario planning.
1. Mapping the environment
What is our objective, what do we want to achieve?
What are we most uncertain about in the future, what obstacles stand in our way?
What information do we have which can help inform our thinking on these uncertainties?
How significantly might these uncertainties impact on our work or organisation, how likely is this to happen? Remember this impact might be positive as well as negative.
2. Identifying scenarios
Identify a set of scenarios based on your mapping and decide some key timeframes, eg six months; one, three, five years.
How many scenarios you pick and the timeframe you decide to plan for will depend on your situation. Remember: perfect is the enemy of good. This is not an exact science, try and keep the number of scenarios manageable.
Try to avoid just picking the most likely outcomes, consider also mapping those which will have the most significant impact.
For each of your scenarios consider the impact on:
- beneficiates and the work we do
- staff and volunteers
- income and investments
- suppliers and funders
- partners and other key stakeholders.
To read the full NCVO article click here.