"It’s better to be roughly right than precisely wrong"
Published in partnership with Amadeus, below is our latest blog on the successful application of scenario planning to drive improved strategic decision-making:
Scenario planning became part of the corporate world in the late 1960s/ 1970s and has matured over the decades into a widely used and accepted means for businesses to look ahead. At its core is the aim to engage an organization’s decision makers and leaders in a structured way to give them the confidence to make higher quality decisions about the future direction of a business.
So far, so good. But there is a wide ecosystem of interests claiming to “engage decision makers….” to make better decisions - data scientists, marketing agencies, consultancies, the usual suspects.
The difference with scenario planning is that it is quite radical. And we think, fun. It frees up the C-suite and anyone involved in the process from the constraint of having to be being right all the time. It challenges the idea of “experts”, who, by definition, believe they are always correct because they are experts. It puts the emphasis on asking the right questions rather than having the right answers. It creates an emotional bond between participants and their organisation because the scenarios have been co-created, with everyone’s input contributing to the end results.
And importantly, a scenario planning exercise will challenge the “official future” – the underlying and often unquestioned assumptions from which no deviation is allowed and upon which forward-looking corporate and strategic decisions are made.
Not everyone gets scenario planning. Amadeus did. Senior people from across all functions and business units willingly contributed significant time to the project. The scale of C-suite buy-in from Amadeus meant that the seniority of the external behaviourists, economists, psychologists, climate scientists, etc, we talked to was top level.
Stratforma’s brief was two-fold. As well as coming up with multiple, plausible, divergent future scenarios to provide a better understanding of what will shape the business, we also stress-tested Amadeus’ existing strategy. We call this “wind-tunnelling” – we took the existing strategy, threw it into a vortex of diverse opinions and analysed what state it was in when it emerged.
This is important because a scenario planning exercise must influence strategy. It does this in four ways – it can identify no-brainers; initiatives which the business must invest in. It detects areas where the business needs to have a look, to make an initial small-scale commitment with a view to scaling if warranted. At the same time, it can also surface the big bets: areas which deserve a bigger, immediate commitment of resources and funds. Finally, scenario planning can sound the death knell for some areas of operation which fail to blip the radar during the process. Deciding what not to do can be as important as deciding what to do.
The simple infographic which we presented as the aggregation of the scenario planning exercise belies the complexity of the selection and curation process. Our contributors identified well over 100 different forces with the potential to have an impact on the future of travel. We asked them to look at society, technology, environment, economics, and politics (STEEP, for future reference). Together, we then prioritised 14 forces with the strongest potential influence.
The next phase was to devise four scenarios which integrated as many of the identified forces into a coherent narrative. At the same time, we needed to develop two axes against which the scenarios could be mapped, in a matrix. The axes needed to be as independent of each other as possible, and we opted for two which reflect the most critical uncertainties. Put more simply, the axes often serve as a proxy for the evolving nature of supply and demand.
Previous posts have drilled down into the implications of each of the specific scenarios, and the previous posts have also re-iterated that the scenarios are not predictions: they are plausible possible outcomes based on a holistic and wide-ranging interpretation of trends in travel and beyond. No-one is saying that the world of “bloc party” or “in it together” will define travel in 2030, and if you think that, then you’ve missed the point.
As we said earlier, scenario planning is not about being right, it’s about being creative, inquisitive, brave, confident. It is about accepting that the future is never not uncertain and the best that we should be aiming for is for a better understanding of the context in which our business will operate in the future.
As Keynes said many moons ago, it’s better to be roughly right than precisely wrong.