Scenario planning is the disciplined method of discovering the implications of alternative futures that change our view of reality, thereby creating better current decisions.
Scenario planning is a future-focused approach that guides leaders to actively think about what major challenges may be ahead and what the organization will do should those events unfold. It establishes “future scenarios” that describe how the organization will capitalize on future opportunities and confront specific potential hardships. For example: scenarios might be developed that address how your credit union should respond to being taxed, how it will face competition from online-only providers, or how the organization might confront the necessity of “attracting younger members or failing.”
Scenario planning does not follow an annual cycle; rather it is undertaken whenever analysis of variable-dependant scenarios must be completed. Scenario planning identifies several (usually three) alternative futures as a starting point. The vision, values and mission of an organization rarely change, but the strategies to reach the desired future may need to change considerably given different scenarios. What happens if credit unions are taxed? What happens if we pursue new markets to no avail? What happens if we adopt new technologies that succeed (or fail)? These different scenarios then become presuppositions upon which we build different strategies. This type of planning facilitates learning and prepares the organization for the possibility of some degree of failure while minimizing future risks.
Scenario planning focuses on determining approximately three future developments and how each one will affect the future success of your organization. The group will also interactively determine the combined effects of these developments on your credit union.
Your organization will draw critical understanding about what actions it needs to take if the anticipated developments do occur. This includes establishing key, tangible planning and organizational preparation steps.
Through fast-moving dialogue, you will create the key assumptions and future scenarios to pursue in order to overcome the major challenges your organization may face.