In order to survive, companies need a plan. With a plan, leaders can be optimistic as they are in control. During these turbulent times, two questions arise: which plan to choose, and how to make it work for the company’s benefit?
The world has gone complex; compared to life even a couple of decades ago, everything is so much more complicated and unpredictable. As a reaction to this, companies are turning to scenario planning – an ancient way of preparing for the possible future.
– Today, there are several things that can surprise you so one single plan is not enough, says Risto Siilasmaa, Chairman of Nokia, who talked about scenario planning at a webinar hosted by Nordic Business Forum in March. – To even survive in today’s business, you have to be ready for a wide variety of scenarios.
Scenario planning forces leaders to look at the situation from multiple angles. The key to survival is to be prepared for every possibility – even for those that are the most unfavorable. People tend to lean towards the positive ones, but if the data is collected and analyzed correctly, it will tell what will most likely happen.
The core of scenario planning is, quite simply, about going carefully through every possible outcome of a certain phenomenon or development.
This is how it, in a nutshell, goes:
- Identify all relevant scenarios.
- Identify what kind of data you need to determine how likely each scenario is.
- Get as much of that data as possible.
- Determine which scenarios are favorable and which ones are negative.
- Create action plan for each scenario; spend more time with the most likely scenarios but some time with every possibility.
- Distribute responsibilities to the organization.
- Execute; learn what works and repeat if necessary.
The most difficult thing in scenario planning is, according to Risto Siilasmaa, to find the right scenarios, especially in long-term planning. People tend to think on a very short-term focus, and instead of looking for continuances, attention should be paid on possible outcomes that are relevant for the particular line of business.
The sooner the employees are involved, the better
It goes without saying that executing the chosen scenario plan requires a common effort from the entire personnel. The management has to be able to openly communicate both what the plan is all about, and what is expected of every individual in turning it into action.
According to Risto Siiilasmaa, the role of employees should become more evident already at the planning stage.
– Leaders should realize that their employees know a lot more about what is going on in the organization, Risto Siilasmaa mentions. – They should reach out for them and ask what is the next thing we will miss.
Information from within the organization is essential in creating the list of possible scenarios, as well as in determining the likelihood for each possibility.
Execution requires engagement. When employees know their roles and responsibilities, they are able to provide their best effort. Especially during the most challenging times, such as right now, every company should understand that only the best is good enough for survival, let alone success.
Open communication is an essential tool in building trust, which leads straight to engagement. Risto Siilasmaa emphasizes honesty and transparency.
– First of all, leaders should not lie. Second, they should always say as much as they can. And, they should also explain why they are not able to say certain things at the moment.
That is the level of transparency employees appreciate and deserve, and that is how winning teams are built.