One of the more memorable lessons from my business school experience was the one on scenario planning. You may know the one. It features Royal-Dutch Shell and the group they established in the early 70s to widen their thinking about how to respond to a variety of geopolitical and supply/demand scenarios. The case study we reviewed included a thought-provoking exercise using a two-by-two grid and a continuum of four what-if scenarios.
As described in a May 2013 HBR article Living in the Futures, former Shell scenario team members Angela Wilkinson and Roland Kupers clarified that the two-by-two matrix is not a central component of the Shell method. Instead, they emphasized plausibility, a balance between relevant and challenging scenarios, and memorable storytelling sprinkled with quantitative data. To this latter point, Wilkinson and Kupers said that –
“What happens at a scenario’s horizon date is not as important as the storyline’s clarity of logic and how it helps open the mind to new dynamics.”
This stands in contrast to the data storytelling techniques currently en vogue in digital analytics circles, which tend to focus on helping your audience understand what you want them to understand.
But there are connections between scenario planning and our work in analytics. I’ve been thinking about scenario planning lately because I am interested in how the framework can be used to help us plan for how businesses should approach society’s eventual emergence from the COVID-19 pandemic. We don’t know if the pandemic will go on for another few months or another few years. We cannot say what impact working from home will have on innovation and creativity. And while we have no idea what the economic impact will be during our emergence phase, we can talk through how we might respond in a variety of situations.
This is the strength of scenario planning.
Take for example the common exercise in reviewing the performance of a campaign. Assuming the data is clean and your data storytelling is clear (heroic assumptions, I know, but bear with me) your audience is probably interested in an answer. Did the campaign produce incremental lift over what it would have done without the promotion relative to last year? Should we continue with the planned promotional calendar? Are we giving away margin with our promotional efforts?
These are reasonable questions. But they can be strengthened with a scenario approach.
- What will we do if demand falls by 30%?
- How might we respond if schools stay virtual for the next year?
- What if our fulfillment goes offline due to an outbreak?
- What if a content title increases demand for our hardware?
Stress-testing customer responses and potential outcomes to what-if scenarios can be both beneficial to the business and an intriguing exercise.
In the midst of crowded schedules, one obstacle is making time to have these conversations with colleagues. I have found that whiteboards help. Blue sky thinking about what might happen is just easier when you have a blank canvas to work from. What if you are socially distancing and are not able to gather around a whiteboard? There are some great collaborative ideation software platforms out there. Miro and Google’s Jamboard are both great for this sort of exploration.
As of this writing, we’re still in the middle of a pandemic. But it won’t always be like this. Just as some creative thinking pre-pandemic might have prepared you for the beginning of COVID-19, thinking big-picture about how consumers, companies, governments and economies might respond to divergent possibilities can be a helpful way to prepare for a range of emergence scenarios.
If you do engage in pandemic-focused scenario planning, don’t try to be right. Focus, instead, on clarity of logic. And keep an open mind.
Have you found scenario planning to be a fruitful exercise? Please share your experiences in the comment section below.