Strategic Planning: Confront Your Longer-Term Futures - dummies

Strategic Planning: Confront Your Longer-Term Futures

By Erica Olsen

The goal in scenario planning isn’t to create one specific future. Instead, by drawing attention to key drivers and exploring how they push the future in different directions, planners create an array of possibilities that result in the ability to make crucial decisions today. Then you connect the like themes from all the scenarios to your strategy by updating or adapting your plan or developing an entirely new strategic direction.

The most significant trends likely to affect the larger world are those forces that are the big what ifs — the driving forces. These situations tend to push your thinking and are usually classified as the big unknowns. The forces generally fit in one of four categories:

  • Political issues: You may need to handle electoral concerns, such as who’s going to be the next president. Legislative changes can affect tax policies, and regulatory issues can include figuring out what to do if Microsoft were to go under.

  • Economic issues: Macroeconomic trends and forces shape the economy as a whole. How does the price of crude oil impact the cost of running your business? Microeconomic dynamics are also a factor. What will your competitors do? How does the very structure of the industry change? And within the company itself, will you be able to find the skilled employees you need?

  • Social dynamics: This area includes specific demographic issues, such as how influential youth may be in ten years, and softer issues of values, lifestyle, demand, or political energy, such as people getting bored with online chatting.

  • Technological issues: In this category, you deal with direct access, such as how high-bandwidth wireless affects landline telephones; enabling technologies, such as nanotechnology bringing in the next chip revolution; and indirect technology, such as biotech evolving past medicine into mainstream full-body entertainment.

Identifying which of the big what ifs may impact your firm is the key to scenario planning for these forces. Some of these scenarios may seem farfetched, whereas others are quite a bit more likely.