Pre-thinking: The New Scenario Planning

What would you do if your best customer closed the account and went to your biggest competitor? (And no, jumping off a cliff is not an option!)

Seriously, what would happen if your key suppliers suddenly tripled their prices? How would you respond if a new technology made your current business model obsolete overnight? What if a computer hacker broke through your security system and stole or compromised all your customer data?

As business leaders, we don’t generally like to think about these kinds of worst-case scenarios. And therein lies the problem. We don’t like to think about these things, so we don’t spend much time thinking about them. When an unexpected crisis occurs, we get caught off guard and are forced to react rather than respond with our highest-level thinking.

Of the companies that do plan in advance for unexpected events, many use a process called “scenario planning.” This typically involves gathering data from political, social, economic, and demographic areas, and then using that information to predict the likelihood of future trends or events that might impact that business.

Scenario planning first gained prominence during the 1970’s when companies like GE and Dutch Royal Shell invested a lot of time and resources in the process. Although some Dutch Royal Shell senior executives said the scenarios had minimal impact on the company’s major strategic decisions, scenario planning gained a foothold in the business world, and is currently practiced by many companies.

Given the rapid pace of change in today’s world, we all need to spend some time looking ahead and planning for possible contingencies. But as commonly practiced, scenario planning has some major flaws that limit its effectiveness.

Scenario planning tends to be a lengthy process that sucks up a lot of time and energy. It relies on the outdated premise that the future is at least somewhat predictable. And the typical scenario planning approach is simply too slow and conservative for today’s hyper-paced world. By the time we get through collecting and analyzing data and creating plans to deal with the imagined scenario, the world has changed to the point that our data may already be obsolete.

I recommend a different approach, called “pre-thinking.”

Pre-thinking doesn’t attempt to predict the future or even plan for it. Rather, it describes what is possible and considers how we might respond to those possibilities. A very informal process, pre-thinking doesn’t require think tanks, committees, or formal meetings. And it doesn’t produce lengthy reports or recommendations. It’s simply a matter of pausing from time to time and asking, “What if….?”

For example, what if the economy picks up in the next three to six months? What if it remains flat for another year? What if it declines? Or, what if a new competitor suddenly enters our market in a way that makes our business model obsolete? What if a natural disaster wipes out our production plant?

Pre-thinking should also consider opportunity as well as potential disaster. For example, what if we could find a way to compete online that has never been done in our industry? What if we begin using social media to give our customers more choices than they have ever had? What if we solve our customers’ biggest challenge or address their most frequent complaint?

Whether pondering disaster or opportunity, the point is not so much to come up with definitive answers to these questions, but to visit and stretch our brains by considering different possibilities.

One of the biggest dangers for business leaders is holding on to outdated ideas and assumptions and getting stuck in old ways of thinking. Pre-thinking challenges us to reexamine our ingrained notions about how things work, and opens the door to new and different ways of seeing the world.

Pre-thinking also helps to expose personal and organizational blind spots. It enables us to react quicker and with more confidence to unexpected events when they do occur. It allows us to take advantage of opportunities before others see them. And it helps team members to develop different viewpoints and perspectives.

Best of all, we can engage in pre-thinking any time, anywhere. In the shower. On an airplane. Driving home from work. While eating lunch. Regardless of where it takes place, pre-thinking stretches the mind and gets us exploring things we otherwise wouldn’t explore. The more we can engage our brains in pre-thinking, the better our ability to respond when something does change. And in today’s world, it will change.

The future may be more unpredictable than ever. But that doesn’t mean we shouldn’t ponder it. Fifteen minutes of pre-thinking a day will give us more flexible, nimble minds that are better equipped to lead our organizations through these uncertain times.

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Holly is the CEO of THE HUMAN FACTOR, Inc. (www.TheHumanFactor.biz) and is a highly sought after and acclaimed speaker, business consultant, and author. Her unique approach to creating strategic agility, helping others go slow to go fast, will change your thinking.