Scotland. 11th Century. The winds howl on the heath as three witches reveal to Macbeth that he’ll soon be king. Macbeth, excited and nervous by this news, begins a letter to Lady Macbeth seeking her wise counsel. Before he puts pen to paper, his friend Banquo walks in, “We assume those witches are telling the truth on these matters, but we do not know exactly what the future looks like. Maybe we should think about how these events might play out; perhaps we’ll learn something important…”
Alas, Banquo did not interrupt Macbeth, nor did they pause to think about their futures. They were pressed for time and consumed with other matters and, as we now know, that lack of foresight led to grave consequences.
Decisions made today by arts and culture leaders carry their own life or death consequences for the organizations they serve. COVID-19’s global spread has laid bare the cultural sector’s fragility in the face of prolonged stoppages. Nearly every performing and visual arts organization in the world is temporarily closed or operating with severe limitations – those in Asia are barely peeking out the other side, with small organizations in Germany now testing similar waters. Financial deficits are mounting – Americans for the Arts reports that U.S. organizations have lost $4.8 billion so far during the pandemic; U.K. organizations are reported to be losing £75 million per month.
While this fight for short-term survival challenges long-term thinking, cultural organizations can best position themselves for continued success by keeping one clear eye on the future. Yet, during uncertain times, it is hard to find solid footing from which to push forward. Thus, a critical tool for strategy development is scenario planning – the exercise foregone by our hypothetical Macbeth. Scenario planning has been put to use in the corporate sector for decades to broaden thinking and prepare for what might otherwise be unforeseen. Many companies have been praised for using these techniques to become more responsive; others that have ignored future signals (think Blockbuster or Kodak) have been sent to the dustbin of business school case studies. While scenario planning is not a crystal ball, thinking through possible futures and imagining a place in each helps prepare organizations to advance their mission, no matter what may be next.
What Is Scenario Planning?
Scenario planning involves looking forward, usually over a long time horizon, to prepare for potential threats and unlock hidden opportunities. (This article speaks to scenario planning for organizations, but it works similarly for other core arts-sector constituents – individual artists, support workers, funders, etc.) The process involves three main steps:
- Scanning the external environment for macro forces and industry trends that – when combined – create maps of potential emerging landscapes. This step should look beyond individual sectors to highlight areas that may initially seem far afield but could have a significant impact over the relevant timeframe – for example, new technologies, demographic trends, or political changes.
- Crafting a range of future scenarios. These are not predictions – the process embraces uncertainty – but rather functional views of alternative outcomes that may exist in one form or another. Each individual scenario should be able to stand alone as a coherent future, while collectively also challenging teams with a range of possibilities. (A break for creativity here too: each scenario is usually given a catchy name in order to facilitate continued reference in conversation.)
- Analyzing the impact of each scenario on an organization – comparing differences and noting commonalities between scenarios – to form a basis for planning future direction.
Scenarios are often created with a time horizon between ten and thirty years – far enough away that we can’t touch it, but close enough that we have a reasonable opportunity to understand what the world looks, sounds, and feels like. There are instances – such as the current pandemic – where organizational strategies are being put to the test during times of extreme uncertainty. In these situations, a shorter time horizon may be needed (e.g. two to five years), mixing the triage of current crises and immediate next steps with longer-term positioning and readiness.
The value of scenario planning lays in providing for a means of preparation well in advance of when change occurs. Organizations that utilize scenario insights are better equipped – more nimble – when new opportunities arise or major challenges occur. Scenarios may also be used as barometers for organizational readiness by offering the ability to adjust current strategies that are clearly at odds with likely futures well in advance of a crisis or industry turning point.
AEA's Approach to Scenario Planning
AEA Consulting regularly tracks and monitors global trends with the potential to significantly impact the arts and culture sector – research that informs our client work in the development of strategic plans, capital projects, feasibility studies, cultural policy, and more. Our scenario planning methodology amplifies this existing examination of trends in the arts and culture sector – grouped as Creativity – by identifying large-scale patterns across the factors of STEEP – Society, Technology, Economy, Environment, and Politics. Our framework for scenario planning is thus “CSTEEP” (Creativity + STEEP), a multi-sector tableau of major forces that is rooted in arts and culture while also capturing macro drivers of change.
We plot these CSTEEP vectors across a series of tools to help craft and visualize future scenarios that are relevant and tangible for each particular client. Every client arrives with their own set of concerns, timelines, and professional circumstances, so scenarios are typically developed in partnership. This ensures each scenario set is tailored to incorporate their views on likely outcomes while challenging underlying assumptions.
The close working relationship with clients in scenario creation means each process is unique – but key outputs to assist in decision making often include:
- A high-level overview of the current “CSTEEP map,” highlighting factors with the greatest impact on possible futures
- Detailed scenario set, including written summaries of three to four (or more) scenarios that highlight the associated changes to CSTEEP and impacts on a range of sector stakeholders
- Analysis of strengths / weaknesses / opportunities / threats (SWOT) at the sector and organizational level
- Scenario indicator metrics, to help identify the direction of movement as the selected time horizon approaches
Outcomes are then used as the basis for recommendations for actions today to prepare for the most likely and/or most impactful futures. Many of these outcomes highlight areas where agility will be critical in order to react to oncoming challenges while avoiding mission drift; others will show opportunities for actions that can proactively shape outcomes.
Responding to COVID-19
The uncertainty surrounding COVID-19 has resulted in all three economic sectors (government, for-profit, not-for-profit) engaging in fast-paced scenario planning processes. Arts and cultural organizations, which have been some of the hardest hit and most in need of such planning, are also typically the ones with the least time or resources to do so. AEA has been engaged by The Wallace Foundation to further develop scenario planning tools for the sector, and we are applying this process in practice with several clients. If you or your organization are interested in learning more about scenario planning and how it may help your current and future situation, we would love to hear from you – the opportunity to imagine long-term futures together is critical as we think about how to maximize culture’s role in the next landscape.
The development of AEA's scenario planning work has been led by a team including Daniel Payne, Principal; Harry Fisher-Jones, Consultant; Eric Gershman, Consultant; and Natalia Vartapetova, Consultant.