Scenario planning for beginners: two methods and some options

Think back to the first few weeks of the COVID pandemic and the way it turned the world upside down. That was probably sometime in March, depending on where you are in the world. Most organizations spent those first few weeks scrambling as they adjusted to Peak Uncertainty.

By late April or early May, we were still in a scramble but we started to get a bit of clarity on what some possible futures would look like. Around that time, I started to hear from teams trying to do scenario planning to deal with the upcoming periods of slightly less uncertainty. I’ve been meaning to share a few guidelines for those thinking about doing the same.

Of course, in the past two weeks, the political context in the U.S. has been thrown into further uncertainty by the most sustained and demographically diverse mobilization we’ve seen for Black Lives Matter—or for any movement in recent history. But political turmoil is now a commonly expected form of uncertainty (known unknown) unlike the COVID pandemic (unknown unknown). So if you were holding off on planning until the dust settles: this is as settled as it’ll get for a while.

What is scenario planning?

Scenario planning is a structured process for making key strategic decisions in the face of uncertain futures. It usually involves sketching out 3–4 external scenarios, and then identifying the internal actions you’ll take to prepare for and respond to one or more of those scenarios. The scenarios are broadly defined, and crafted more as planning guides than as predictions of the future.

Scenario planning is focused on an organization’s near-/mid-term strategic and operational decisions, in contrast to foresight or futures methods that look at shifts from a societal or public policy standpoint on longer time horizons (e.g. 10+ years). (For one of those, check out the Long Crisis scenarios.)

There are as many ways to do scenario planning as there are to do strategy or design research or campaign planning. Here are two I’ve found recently that I like.

Light-touch: The Management Center’s 5-box tool

The Management Center put out a simple “5-Box Scenario Planning Tool” that comes with a scalable process. The tool is built around three scenarios, and for each you construct the key assumptions (about the external world) and the impacts the scenario will have on your programs, operations, and funding. Then you dive into one (or possibly two) scenarios with the 5 boxes: scenario summary, your strategy, immediate steps, ideas for future consideration, and indicators to track.

This straightforward tool strips scenario planning down to its “minimum viable product” version. You could use this tool on your own with an hour or two of space to think (I know—that’s hard to come by these days). Or you could scale this up to an organization-wide process, using multiple sessions to synthesize inputs from surveys or other sources, and even including partners. The core framework is refreshingly simple either way. (See their guidance note for some factors to consider.)

Mid-weight: Bridgespan’s method

Similar to the 5-box tool, Bridgespan’s scenario planning method is scalable: you could work through the framework on your own if you wanted. However, the framework has another level of nuance that would make it a bit unwieldy as a solo endeavor. It’s better suited for slightly larger organizations with multiple divisions and more complex programs.

The framework’s nuance comes in each step. Before crafting the scenarios, you define the drivers of your organization’s impact and business model, then select the key drivers likely to be impacted in the scenarios. (So while the 5-box tool looks at programs, operations, and funding broadly, Bridgespan’s tool looks at key factors within each of those.)

You then outline the scenarios in terms of the external factors that affect your organization (again, analogous to the “key assumptions” used in the 5-box tool, but with more granularity) and identify how those factors will impact your key drivers.

One aspect of the Bridgespan framework I like is to plan your actions in three categories: those appropriate for any scenario (i.e. preparatory actions to take now or soon); the smaller-scale and flexible actions that might also apply across several scenarios; and the larger and more permanent actions that are most applicable to the worst case scenario. You then define “trigger points” (similar to the “indicators” in the 5-box tool) for when you’ll take each of those actions.

As with the 5-box tool, Bridgespan’s method is a process-agnostic framework. But the nuanced framework lends itself better to a more involved process: think full-day workshop or series of sessions, with analytical work between each.

Heavier processes and other considerations

The most detailed version of scenario planning is a custom process that draws from the frameworks above and others. This would be most appropriate for large, complex global organizations—e.g. those with a permanent presence in multiple geographies, and a variety of disparate work and revenue streams.

For a heavier process, or just as variations on the light/medium processes, a few more considerations come into play:

• Consider multiple time horizons: Most processes look at scenarios unfolding within the next 6–12 months. For many organizations, this is the right horizon for planning, as it leaves plenty of time for future pivots, but you may also need longer timeframes if you’re making major investments that will only be relevant beyond a year.
• Build ongoing planning capacity: Scenario planning shouldn’t be a one-off conversation for any organization; revisit the scenarios and your plans as you track the indicators/triggers for your various actions. For large/complex organizations, this might need to sit with a strategy team or an ad hoc cross-department team to put regular capacity against the process. (See this from BCG for more.)
• Break off the scenario definitions to provide to others for their use: Crafting the scenarios is a distinct activity from deciding how you’ll prepare for or respond to those scenarios. If you’re in an organization’s strategy department or at a sector-support organization (like a consultancy or even a foundation), you could provide well crafted scenarios as an input relevant to many teams’ planning. These wouldn’t be generic scenarios applicable to all organizations everywhere, but rather sector- or geography-specific ones that would be useful for similar teams.
• Collaborative/partner-inclusive processes: For those with more permeable organizational boundaries, you might consider a multi-partner process—which would naturally bring a range of perspectives and incentives, as well as coordination challenges. But the potential alignment and common understanding created could be hugely valuable when making future pivots.

As with all planning, the crux is tailoring it to your organizational context: right-size the process, focus on the most relevant factors, and ensure it’s actionable by tying it to your regular systems and channels.

No matter what method you choose, scenario planning can’t make the future more knowable. But it can help you find the signal in the noise so you’re better able to navigate the uncertainty, and it can help you prepare for tough decisions down the line. Even now, when we’re all overwhelmed and scrambling, that’s worth a few hours of your time.