‚ Back to the Future’ – How to create opportunities for the new year and for the future with the help of the scenario technique.
Who wouldn’t have liked to prepare their company for the effects of the Corona pandemic in previous years? And who wouldn’t like to travel back in time like in the film “Back to the Future” to create new opportunities for today’s “future”? Even if you don’t own a DeLorean sports car as a time machine: In the new year, nevertheless, take a targeted look at your strategy, at trends and developments in digital transformation.
Not just VUCA, but BANI?
Even if Corona should eventually be under control, the changes triggered by the pandemic will remain. Even the concept of the so-called ‘VUCA world’ is changing. Some now speak of BANI (…another acronym), which describes a new phase of uncertainty and fear. It stands for these four words:
Whatever the future holds for VUCA or BANI, the pandemic has massively accelerated the digital transformation. It has now found its way into almost all industries and organisations to a greater or lesser extent. And it will ensure that business life continues to change. The trend is not only towards more ‘digital collaboration’, but also towards new digital business models and processes. These will permanently change working life.
Don’t get stuck in worst-case scenarios
To deal with such a “crazy” situation, it is worth taking a look at our own business strategy. How much has the environment in which we operate as an organisation changed? What scenarios are conceivable for the future? How do we have to change our organisation in order to survive successfully in these scenarios? What are important points in this process?
To answer these questions, the scenario technique helps. Don’t get stuck in a worst-case scenario, don’t just prepare for one possible future, but think of several at the same time. Because things can always turn out completely differently than expected.
Four steps for a structured look into the future
Step 1: Analysis
At the beginning of a strategy development process with the scenario technique, there is an as-is analysis based on facts and knowledge.
- Where does our company stand at the moment?
- What are the strengths, weaknesses, opportunities and threats?
With the use of classic instruments of strategy work, the SWOT analysis, business field analysis, customer analysis, competition analysis or ABC analysis, the initial situation is discussed.
Step 2: Future scenarios
The next step is to look into the future of the company.
- Which internal and which external factors have an influence on the development of the company?
- How do these factors influence each other?
- What projections can be derived from this? That is, what happens if one factor develops in one direction and a second factor in another direction?
Several scenarios are developed from these future projections. The opposite should always be considered as well. What if things don’t turn out that way, but quite differently? Seemingly extreme scenarios can also be developed. It is not a matter of calculating probabilities. On the contrary, the aim is to encourage open-minded thinking. Many things are possible that could happen in the future, even sometimes what we had not suspected before.
Step 3: Strategic Options
Now our own options for action are being explored against the background of the possible different future scenarios.
- What can we as a company influence?
- How could we adapt to these future scenarios or act successfully in them?
- Which options are conceivable for us?
This creates strategic options with different approaches to action. Often, wishful images also emerge in the process: We like one scenario better than another. But all options for action should still be collected without restriction so that we can think through all possibilities.
Step 4: Define strategy and plan implementation
In this step, the different options for action are evaluated, a strategy is developed from them and the measures for implementation are prepared.
- Do we want to consider all scenarios in our strategy (robust strategy) or do we want to concentrate on a few scenarios (focused strategy)?
- Which options for action can be coherently fitted into an overall strategy and combined with each other?
- Which options do we exclude from the outset?
The fields of action are defined and a preliminary plan with measures for implementation is developed. Vision and mission statement can be formulated. You can find our approach to strategy development here.
And in addition, early indicators should be defined in order to recognise future developments in good time. This is because you should act quickly and, if necessary, redirect if a scenario develops quite differently than expected.
Furthermore, it is advisable to initiate some options for action in “protected environments”. These can be pilot projects, experiments, small start-up ventures of your own, etc.. For those who want to implement new things for an uncertain future should gain experience in time and learn continuously.
A practical example with six strategic options
A detailed description of a strategy development with the scenario technique can be found in this project report.
Adapting the strategy will of course not be able to change the past, as happened in the film “Back to the Future”. However, the scenario technique offers the possibility of looking at different future options and being able to prepare for them. The good news: you can save yourself the time machine!
In any case, we at flow consulting wish you every success with your strategy adjustment to the much-cited ‘new normality’. In any case, I am very much looking forward to a new part of “Back to the Future” – let’s see when it will be published again. There is plenty of material for it.
We wish you a happy and successful new year 2021.