Blog

Scenario Planning – Tool for Strategic Planning and Forecasting (Webinar Summary & Recording)

How can you and your company be better prepared for the future? According to Risto Siilasmaa, the founder and chairman of F-Secure Corporation and the chairman of Nokia, scenario planning is the answer.

On Friday, 20 March 2020, we hosted a webinar with Siilasmaa to dive deeper into the topic (link to the recording). During the webinar, Siilasmaa shared how to use scenarios to understand the future better and how to be able to react quickly and decisively to surprises. His insights on scenario planning can be helpful especially for business owners, CEOs and board members to find and prepare for alternative scenarios.

It’s obvious that this skill is now more important than ever, as the COVID-19 outbreak shapes the world economy in unpredictable ways. To help you get started with this important way of thinking, we here summarize the basics of scenario planning by Risto Siilasmaa.

What is scenario planning?

Siilasmaa explained that scenario planning is actually a very natural way for human beings to prepare for situations that may come across. It simply means that you identify a few scenarios that might occur in the future, and you prepare your company for those various situations instead of relying on one single plan.

6 steps to scenario planning

Siilasmaa advised to start with these basic steps:

  1. Identify the relevant scenarios for the future. Remember to pinpoint not only the ones you wish to occur but also the ones that are not that favorable to your business.
  2. Determine what type of data can tell you which one of those scenarios will happen.
  3. Try to proactively get the data you need to predict the likelihood of each relevant scenario.
  4. Prepare yourself for each scenario. Remember to create action plans for both the ones that are more likely to happen, but also prepare for the ones that don’t seem that relevant.
  5. Evaluate, which scenarios would be preferable to you, and which not.
  6. Finally, consider what action can be taken that you increase the likelihood of the positive scenarios and decrease the likelihood of the negative scenarios.

3 tips for scenario planning

Include your team in the process!

Siilasmaa emphasized that it is very important to work with your team and employees on scenario planning. Especially now with the COVID-19 situation, you need multiple scenarios to prepare for the future. Reach out to your employees and ask them: What is the next big thing that we are going to miss? Siilasmaa says that most likely they know better than you – so listen to them! He also advised us to remember basic leadership principles (show that their ideas are valued, build trust, listen, be clear about goals, hold people accountable, etc.) during the process.

In addition, Siilasmaa advised that when you identify the scenarios with your team, it is essential that you force yourself to consider the unlikely and surprising scenarios as well. You can support that by appointing some people to focus on the very negative outcomes. Usually, no one wants to be the pessimist, yet in scenario planning, you need to give someone the task to focus on the worst. Sometimes the very unlikely scenarios have very drastic outcomes, so it is crucial to be prepared.

Revise and adjust your plans

It’s a given that circumstances change, which is why scenario plans need to be revised and adjusted regularly. Create yourself and your team a routine to go back to your scenarios and make modifications to your plans. Siilasmaa highlights that it is essential to kill scenarios if data indicates that they are not going to happen, but also to create new scenarios when data implies that something else might occur.

Siilasmaa also notes that especially in case you find new information that conflicts with the scenarios and the data you’ve gathered, you need to update the scenarios accordingly. For example, during this COVID-19 outbreak, there are pretty straightforward predictions on the virus spreading but the governmental actions can be a bit more surprising. Thus, keep yourself updated on the situation and adjust your plans when data indicates it’s needed.

Consider as well, that when the circumstances are steady you can plan for a longer time period, but in a crisis situation the time frame needs to be shorter. So as Siilasmaa advised, revise your scenarios more often now when the future is even more unpredictable.

Be a paranoid optimist

Siilasmaa highlights that scenario planning is not about coming up with scenarios and appropriate action plans, and then executing the plan that is at that time the most likely or most preferable to your business. Even though you might know what is the most likely or most desirable scenario, you need to be suspicious and challenge the scenarios all the time, because circumstances might change rapidly. Siilasmaa summarizes that the core of scenario planning is to create an appropriate number of scenarios, make action plans for each relevant scenario and follow all of them.

Therefore, Siilasmaa recommends all leaders to be paranoid optimists: focus also on the very worst scenarios because acknowledging them enables you to have a plan against these worst-case scenarios. That preparedness in turn then gives you the opportunity to be an optimist because you are in control of the future.

Watch the webinar recording


Who is Risto Siilasmaa?

Risto Siilasmaa is the founder, chairman and former CEO of F-Secure Corporation, an anti-virus, and computer security software company based in Helsinki, Finland. Siilasmaa is also the chairman of Nokia until April 2020.

After being appointed chairman of Nokia in mid-2012, he led the company in a successful corporate transformation. Through three transactions that he negotiated – the purchase of complete ownership of Nokia Siemens Networks, the sale of the handset business to Microsoft, and the acquisition of Alcatel-Lucent – Nokia transformed from a bankruptcy candidate to a global technology leader.

In 2018, Siilasmaa also published a book about Nokia – Transforming Nokia: The Power of Paranoid Optimism to Lead Through Colossal Change, in which he shares his ideas on paranoid optimism and scenario planning.

Recommend

What is new

News

Speaker Contest 2020 Dates Rescheduled

Blog News Newsroom

Monthly Webinars and Past Keynotes Added to Nordic Business Forum LIVE