more-arw search

Q&A Forum

Scenario Planning -- Top 3 or 4 High-Impact Practices

scenario planning processI need to tap into the formal discipline of scenario planning, not make it up applying only intuition and common sense. So far I’ve found little online that isn’t already obvious. My organization has encountered what may or may not be a major negative game-changing event and we need to develop contingencies for what may be unpleasant states no one wants to contemplate (or feels they will be tagged “defeatist” if they voice them). For a little more context, mine is a marketing-dominated organization (as it should be) but we battle the stereotypical biases and blindspots (like over-optimism, over-confidence, confirmation bias, the osterich effect, escalation… should I go on?). Any techniques on the formal discipline of Scenario Planning for my situation are gratefully appreciated! I plan to use the "Pre-Mortem" technique as one tool though I don't know if this is a bona fide Scenario Planning technique.

Answers

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

My Scenario Planning Approach -

The first model produced is your expected scenario (Mid Scenario). Next produce scenarios to gauge the impact of assumption changes. For example, produce two additional models -

If your company has 25% more revenue than expected (High Scenario), what will be the impact on operations and work quality? What is your plan? Uncontrolled growth can be damaging.

But if your company has 25% less revenue than expected, what will you do (Low Scenario)?

There is value in knowing what you will do prior to the occurrence of the situation. If results are worse than expected, it is better to have a plan on what to do with controllable expenses. Keep the budget in a drawer and hopefully never need it.

Topic Expert
Moshe Kravitz
Title: Director of Finance
Company: IDT Telecom
LinkedIn Profile
(Director of Finance, IDT Telecom) |

This is not "scenario planning" per se, but it's a process that might prove to be very helpful for you.

We can't know the future, but, for any scenario we can and should say, "What needs to happen for this scenario to occur? Write down ALL the measurable drivers. Look at each one and decide if it is realistic. Monitor actuals for all the significant drivers and adjust the plan as necessary. To layer some scenario planning onto this, develop contingency plans for how to proceed in the event that each significant driver varies from where it "has to be."

1065 views
Topics
Products and Companies

Get Free Membership

By signing up, you will receive emails from Proformative regarding Proformative programs, events, community news and activity. You can withdraw your consent at any time. Contact Us.

Business Exchange

Browse the Business Exchange to find information, resources and peer reviews to help you select the right solution for your business.

Learn more

Contribute to Community

If you’re interested in learning more about contributing to your Proformative community, we have many ways for you to get involved. Please email content@proformative.com to learn more about becoming a speaker or contributing to the blogs/Q&A Forum.