Scenario Thinking: Act and Monitor (Phase Four/Five)

Scenario thinking has five basic phases as outlined in What if? The Art of Scenario Thinking for NonProfits.
  • Phase One (Orient) –  creates a clearly articulated issue/question
  • Phase Two (Explore) –  identifies all driving forces.
  • Phase Three (Synthesize) – prioritizes driving forces
  • Phase Four (Act) – crafts the strategic agenda
  • Phase Five (Monitor) – signals the need for tweaks to the strategic agenda  
 
 

Act

Gather the scenario frameworks from the Synthesize phase and fully immerse yourself in their narratives.  Imagine that the future circumstances of each scenario are really occurring and ask yourself:

  • What actions would I take today to prepare?
  • What could I do to increase the likelihood that this scenario will come true?
  • What could I do to decrease the likelihood that this scenario will come true?

Answering the questions will reveal scenario implications for each scenario.  If the scenario describes a future in which there is reduced government funding and a weak economy, it is safe to deduce that one implication would result in less funding for the organization.  It may also expedite innovative approaches the organization has wanted the opportunity to explore as another possible implication.

Your strategic agenda will start to emerge as you reflect on the implications of each scenario.

Begin by searching for implications common to all scenarios because they represent the lowest level of risk.  The same implication present in each scenario will make it most likely to come true in the future.  One implication likely to be present in all scenarios for a not-for-profit organization is funding shortfalls regardless of government funding or the strength of the economy.  Basing your strategy on funding shortfalls is fairly safe.

Relying on a scenario implication that is singularly different from other scenarios represents the highest level of risk because there is a lower likelihood that it will come true.   Basing your strategy on the future outcome of an election is risky for the organization.

“The test of a good set of scenarios is not whether in the end it turns out to portray the future accurately but whether it enables an organization to learn, adapt and take effective action.” (P.30, What if? The Art of Scenario Thinking for NonProfits)

 

Monitor

Monitoring the strategic agenda is often the stage that gets sidelined by the day-to-day routine of the organization.   Monitoring involves watching for signals indicating changes in the environment potentially impacting the organization and its strategic agenda. 

The key to the Monitor phase is selecting the correct signals to watch by identifying a set of ‘leading indicators’They should contain a mix of qualitative and quantitative information from the local, national and international contexts.  Then take some time to make adjustments to your strategic agenda.

Scenario Thinking: Explore and Synthesize (Phase Two/Three)

Scenario thinking has five basic phases as outlined in What if? The Art of Scenario Thinking for NonProfits.
  • Phase One (Orient) –  creates a clearly articulated issue/question
  • Phase Two (Explore) –  identifies all driving forces.
  • Phase Three (Synthesize) – prioritizes driving forces
  • Phase Four (Act)
  • Phase Five (Monitor)

Phase Two: Explore

Begin Phase Two by brainstorming all the driving forces potentially impacting the organization beyond the day-to-day.  “Driving forces are the forces of change outside your organization that will shape future dynamics in both predictable and unpredictable ways.” (P.27, What if? The Art of Scenario Thinking for NonProfits)

Remember that driving forces can be reasonably predictable or the vaguest of uncertainties and it’s important to them all.

 

Phase Three:  Synthesize

Phrase Three is where the scenarios start to take shape by prioritizing the driving forces brainstormed in the Explore phase.  The driving forces with the most relevance to the issue or question discovered in the Orient phase and the most uncertainty should be prioritized the highest.  The selected driving forces become the foundation for our scenarios.

Using two driving forces, create a matrix with four quadrants. (example taken from What if? The Art of Scenario Thinking for NonProfits)

Less——government ——More

Weak—–economy———-Strong

 

The four quadrants will create four scenario frameworks.

  • Less government with weak economy
  • More government with weak economy
  • Less government with strong economy
  • More government with strong economy

Create narratives for each scenario framework that start in the present and run into the future.  Remember, it is a story not a dissertation or analysis.  “Content is less important than the types of conversations they spark and decisions they spark.” (P.30, What if? The Art of Scenario Thinking for NonProfits)

The narratives will eventually fade to the background as more conversations begin to reveal opportunities and threats. Conversations should become the focus and not the scenarios.

Scenario Thinking: Orient (Phase One)

Over the next few posts I will be briefly summarizing how to do Scenario Thinking.  They will not be super compelling but they will be concise summaries serving as a quick and accessible reference.

What if? The Art of Scenario Thinking for NonProfits has outlined five basic phases (Orient, Explore, Synthesis, Act, Monitor) to be used as a guide and can be easily adapted to better suit your context.

Phase One: Orient

The scenario planning process begins by determining the issue/question to be explored.  Working through the Orient phase will result in a clearly articulated issue/question to which all other scenario thinking phases will be tethered.

Begin by determining the time horizon (5 yrs., 10 yrs., 20 yrs.) for the scenario thinking initiative.  Next, conduct one-on-one interviews with organizational decision-makers and external thought leaders to identify organizational challenges.  Be sure to keep the questions broad and open ended to reveal the underlying assumptions and hidden beliefs people have.

Looking for patterns in your interviews will reveal the question/issue to be addressed throughout the rest of the scenario thinking process.   It should be articulated as objectively as possible and cover the same time horizon used in the interviews.  Two possible examples below.

Over the next “x” years, should the organization pursue a path towards growth?

Over the next “x” years, which initiatives/programs/projects should the organization shed in order to be more agile?

 

Can you think of three possible interview questions?  Now put the questions through the liminal thinking lens.  Will they reveal the interviewee’s beliefs and needs?  

Your Situation Is Ideal for Scenario Thinking If….

When I first began reading about scenario thinking I was equal parts intrigued and skeptical.  If resources are already stretched and people are already too busy, how does an organization allow itself the time and space to ensure the initiative has a chance at success?

For successful scenario thinking, the authors of What if? The Art of Scenario Thinking for NonProfits recommend the organization be:

  • oriented towards learning by engaging in authentic conversations about its warts and wonders.
  • comfortable with not being comfortable by intentionally and constantly acquainting itself with change
  • open to hearing divergent perspectives to unlock the otherwise unrealized opportunities or mitigate previously unnoticed threats.
  • comfortable with implementing change where and when needed.
  • lead by someone who understands and champions the scenario thinking process including the implementation of its discoveries.
  • willing to commit the resources needed to do the work.

The authors also supplied an excellent initial litmus test you can use to determine organizational readiness for scenario thinking (What if? The Art of Scenario Thinking for NonProfits, p.21)

Do not use scenario thinking when…

  • the problem you are dealing with is not central to your organizational strategy and/or your problem and solution are clear.
  • the outcome is largely predetermined due to internal or external factors.
  • the leadership want to maintain the status quo.
  • there is too much urgency to step back for a reflective and creative conversation.
  • your desired outcomes are poorly aligned with your dedicated resources.

Your situation is ideal for scenario thinking if….

  • you are dealing with a strategic issue and the solution is unclear.
  • you are working in a highly uncertain environment.
  • there is leadership support for the scenario thinking process.
  • your organization is open to change and dialogue.
  • you can attract the resources necessary for a successful initiative.

4 Reasons to Think in Scenarios

As many of you know I have the honor of sitting on the board for the Skills Society.  An honor because of what they do and who they support but also because I come in contact with some amazing people and ideas.  Recently we were asked to read What if? The Art of Scenario Thinking for NonProfits.  

Although scenario thinking has been around for decades, its recent use has become increasingly essential in our ever-changing context.  And if you’re hoping the tidal wave of change will soon pass, you will be disappointed. Most of the literature I have been reading (Inc.com, Harvard Business Review, McKinsey Quarterly, Twist Image) indicates the pace of change will only accelerate and consequently become more unpredictable.

As an Executive Director for a not-for-profit organization, how do you determine a strategic direction when the destination you choose today could disappear tomorrow?

Scenario thinking seems to offer a lifeline for our beleaguered Executive Directors because it forces us from the comfort of traditional strategic planning and broadens our thinking beyond the insular confines the status quo.  By encouraging us to think about the present through the prisms of multiple scenarios, it reveals previously unidentified threats and opportunities for the organization.

To be clear, we are not trying to predict the future. Predicting the future makes you a futurist not a strategist.  We are not trying to predict who will win the election, rather we are trying to plan for many possible winners and how it could impact the work being done by the organization.

“Ultimately, the point of scenario thinking is not to write stories of the future.  Rather, it is to arrive at a deeper understanding of the world in which your organization operates, and to use that understanding to inform your strategy and improve your ability to make better decisions today and in the future ” p.9

As a process, scenario planning is outside-in.  It begins by identifying driving forces of the broader environmental context external to the organization (technological, social, economic, political, environmental). At Skills we are constantly having conversations about the threats and opportunities inherent in shifts in the provincial economy.

Next, scenario thinking examines the working environment external to the organization (clients, stakeholders, partners, funders, constituents, customers, competitors, regulators).   One consideration Skills is tracking is the shifting demographics of the clients we serve and the threats and opportunities it could present for service delivery.

Finally, it moves to considering the internal organizational conditions. This means having conversations about ways in which external forces (broader environmental context and working conditions) could influence the organization and how it functions internally.  For Skills, this requires discussions about how the economic realities and client demographics could effect the way the organization delivers services to its clients.

Incidentally, scenario thinking can also be done in the same way for issues or complex problems.

 

Four Reasons to Think in Scenarios

Setting Strategic Direction: develops a strategic plan that accounts for possible changes in the environment outside the organization or tests your current strategic plan.

Catalyzing Bold Action: inspires and nudges the organization to take bold actions pushing beyond assumptions that reinforce the status quo by …rehearsing diverse and provocative future possibilities-both desirable scenarios you would like to help create and dark scenarios that generate a sense of urgency” p.16

Accelerate Collaborative Learning: uncovers otherwise inconceivable solutions by creating a space for the organization to learn from diverse perspectives.

Alignment and Visioning: forges new relationships by creating a shared understanding of the complexity of the problem resulting in new approaches.

 

Do your own Outside-in thinking:  

  1. To begin, think of an issue that you feel strongly about fixing but society has not successfully addressed (e.g. poverty, animal abuse, education for gifted students, mental health, addiction, ….)
  2. Draw a column on the left side of the page.  Identify the technological, social, economic, political, and environmental factors in the contextual environment that impact your issue (not meant to be an exhaustive list – just whatever comes to mind).
  3. Draw another column in the center of the page.  Identify the factors (clients, stakeholders, partners, funders, constituents, customers, competitors, regulators) in the working environment that impact your issue (again,  just whatever comes to mind).
  4. Draw a third column on the right and leave it blank.
  5. This is where the activity gets interesting!!  Find someone that has the same level of interest in the issue you have a chosen but you know their approach is quite different from yours. Have them fill in the first two columns for themselves.
  6. Go out for a coffee or a lunch with the other person and fill in the final column together.  Do not vet or debate the ideas- just fill them in together.
  7. Next, notice and discuss where your ideas converge and diverge.  The most important revelations will come from the conversations around where your ideas diverge the greatest.  
  8. Make note of any new ideas or approaches emerging from your conversation.

    Congratulations, you have just done outside-in thinking!!

One Activity for Developing Meaningful Strategy

Most strategic planning sessions in which I have participated always seemed to lack substance.  It was as though we all knew the results of the session would be meaningless but we participated anyway.  Strategy via compliance.

For strategy to be meaningful, it cannot be created in one session.  It requires time, openness, conversations and iterations.

Recently, my faith in strategic planning was restored when I participated in a session facilitated by Mark Cabaj for The Skills Society.  Here’s what we did.

We read Getting to Maybe.  A treatise packed with concepts, ideas and stories that provide insight into how social innovation can occur.  In particular,  we focused on the Adaptive Cycle (chapter three). Please read the book for a more complete explanation and an excellent illustrating example.  

Essentially, any initiative, program or activity needs to pass through the four stages of the Adaptive Cycle to ensure organizational resilience.  Organizations become vulnerable when they have too many initiatives ‘stuck’ in any given stage for too long. Stages of the Adaptive Cycle include:

  • Release:  organizations make the choice to end certain activities, initiatives or programs.  Inevitably, ending a program can cause strife but it also releases precious resources that can be re-allocated to new ideas or approaches.
  • Re-organization/Exploration:  organizations enter a highly creative stage generating many ideas all competing for the newly released yet finite resources.  Priorities emerge and the released resources converge on the ‘best’ ideas.
    • TRAP:    Failing to allocate the initial ‘investment’ of resources to give a ‘best’ ideas a chance at success.  ‘Everything gets funded but nothing gets accomplished’
  • Exploitation/Development:  organizations marshal additional necessary resources to move the idea from conception to reality. ‘Taking the implementation plunge!’
  • Conservation/Maturity:  organizations identify and codify best practices into polices or procedures.  All the hard work  to bring an innovative idea to life should be producing the change we were seeking.
    • TRAP:  Failing to identify when it is necessary to release resources so they may be reallocated.    ‘It’s the way we’ve always done it”

Then Mark lead us through an insightful activity in which we broke into small groups and plotted Skills Society programs, initiatives, and projects on the Adaptive Cycle. As a larger group we acknowledged this was the first conversation of many and nothing we did in the session would result in final decisions, freeing us from the obligation to have a polished strategic plan when we finished.  This allowed for a thorough exploration of divergent and convergent opinions.

Next, we plotted where we thought the same initiatives would be on the Adaptive Cycle in three years.  This conversation, when conducted with openness and generosity, is where thoughts and opinions about the future of the organization begin to organize into patterns and themes.  It is where fuzziness starts to give way to a clearer path forward.

I am looking forward to the next steps.