Quite a few years ago I was introduced to a planning discipline that had originally been developed by the Royal Dutch Shell company as a tool for addressing highly consequential decisions in situations where there are many unpredictable variables. Whether you are rolling the dice on life-or-death decisions, betting billions of dollars or the future of your organization you need a reliable crystal ball and typical strategic planning tools just don’t work very well when there are a great many uncertainties.
The approach Shell’s planners took was to develop scenarios based on the key drivers affecting the future. For example, the future wholesale price for oil, the availability or scarcity of future oil fields, the future politics of countries where oil reserves are located and so on. While I used Shell’s examples, we all have uncertainties in our personal lives, surrounding our future health, wealth, safety, and happiness among other things. Shell created their scenarios by imagining potential futures contrasting polar oppositions such as scarcity and abundance. A future scenario in which oil is in short supply and prices are high is compared with one in which there is over abundance and prices are depressed. Of course, as one adds more variables the scenarios become a good deal more complex than these simple illustrations but remain within the scope of possibilities.
With a handful of contrasting scenarios in hand the next step is to try to develop strategies that would be likely to succeed in all or as many scenarios as possible. Of course that isn’t attainable, but the idea is not predicated on finding perfect solutions because there aren’t any, just as the scenarios are never exact representations of any actual future. But by developing robust strategies that could prove workable in most cases plans can be developed that are more likely to succeed in whatever hybrid of the future emerges. The critical and final step is to revisit these scenarios and strategies—regularly, and revise them as new information and developments require.
Here's the thing, plans go awry. The great 19th century military strategist Helmut van Moltke famously said that “no plan survives first contact with the enemy.” Dwight Eisenhower, supreme commander during WWII put it more simply, “I have always said that plans are useless but planning indispensable.” Scenario planning cannot predict the future accurately—no scenario will ever get it 100% right. But the planning itself—the analysis of what might happen in the uncertain future and more importantly what steps taken in the present would serve us well in that event, make all the difference between survival and success or failure and ruin.
So, planning, of any kind based on any set of assumptions is useful but only to the extent it does not remain static. As a consultant I have often been asked to assist organizations with their strategic planning and the first thing I do is ask to see their current plans. Almost without fail those plans were created many years in the past or sometimes are more tactical than strategic. Tactical planning is useful in determining how to proceed in a given situation but does not address the question why. Strategic plans reveal our assumptions about the future --why we are doing whatever it is we have decided upon.
Strategic plans are not meant to be kept in a desk as reference documents, they must be living. breathing things that we routinely examine and revise as events unfold. Our paramount concern should be directionality—where we are headed and where we hope to be. Whenever our strategic plans and our present reality diverge we should be alert to the possibility of long term change. If we have done our planning and revisions frequently events will not overtake us. Even if we never execute the exact plans we’ve made, we’ll know what not to do, and that is hugely important if we hope to avoid catastrophe .
If all this sounds like some abstraction that applies to corporations and organizations let me say plainly that all of us should be planning all the time. I’m not talking about the big what ifs necessarily, although thinking about them is also important. I am saying that each of us needs to take account of the current environment from time to time and update our plans for the future—the hoped-for destinations we have in mind. There is a chance that some of those plans have gone off the rails or may—but the good news is that it doesn’t need to be a catastrophe if we have given ourselves the benefit of time to make corrections in our course. In the words of the poet Robert Burns, “The best laid plans of mice and men gang aft a-gley”. But the worst plans of all are the ones we never made.
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