Scenario Planning to Rapidly Increase Resilience
With the help of scenario planning and other foresight methods, most organizations can quickly improve their ability to deal with uncertainty, increase their mental preparedness and thus their resilience to unforeseen events.
It is important to also plan for less likely but serious events. In the summary of its recently published report "Kraftsamling", the Swedish Defense Committee writes the following:
The Defence Committee wishes to emphasize that it is not the most likely development of events that is most important in relation to the task of dimensioning total defence, but the developments that would have serious consequences if they occurred. Security policy assessments must therefore also include events that are seen as less likely and whose consequences would be particularly serious if they occurred.
Because Total Defense involves the population at large, as well as public and private organizations, it is society as a whole that must prepare for severe scenarios of various kinds – whether they are considered likely or not. This is a paradigm shift for many organizations, which must move from looking at measurable and expected developments in their forecasts to identifying, understanding and managing non-linear and dramatic events that may or may not occur.
The importance of preparing for the less likely but serious possibilities has been emphasized by Kairos Future on several occasions. This article summarizes some of our key points on how the Defense Committee's call can be taken seriously and put into action today using scenario planning and other foresight methods.
Three steps for scenario planning to improve preparedness
Responding to the call for increased preparedness through scenarios and foresight can be broken down into three steps:
1. Identify your organization's critical events
2. Create scenarios to support mental preparedness
3. Manage the consequences in business planning
Using business intelligence and scenario planning as tools, organizations can systematically work through these three steps. Within these methodologies, there are a number of technical and conceptual tools that are used for different purposes.
1. Identify Your Organization´s Critical Events
The process begins with the question, "What are the possible events that could have a major impact on our organization? The next step is to ask, "What are the mechanisms that could make this happen? In other words, it is an environmental analysis based on the courage to ask uncomfortable questions. The basic idea is to plan from the future as follows:
• What would have a major impact on us if it happened?
• How could it happen?
• What should we do in this situation?
Today, questions about war are on the agenda, but another typical case for a municipality might be "What if the factory closes? Whatever the critical issues are, the next step is to reach out to the outside world.
Map what your organization knows and doesn't know about the outside world
Once the critical questions have been asked, the next step is to look for the chains of events that can make them happen. There are supporting frameworks and thought models that help us sort out what we know and what we don't know. What we know and don't know can then be divided into what is unknown to us and what is unknown to others. This way of thinking is captured in a model sometimes called Johari's Window. Using this or other models, an organization can map its knowledge and the knowledge of others and see if the sequence of events that can cause the critical events can be easily identified.
Figure 1: Johari's window, adapted by Kairos Future.
Black Swans Symbolize What We Cannot Imagine
To better understand what we do not know or see, two parables from the animal kingdom are worth recalling. The first is about Black Swans – a phrase popularized by investor and philosopher Nassim Taleb. It was common knowledge in the Western world that swans were only white, which was true – until black swans were discovered. Of course, black swans had always existed in other parts of the world. Conceptually, they could be imagined, but there was no empirical evidence that they existed and would soon be found. So the black swan symbolizes something that exists but is beyond our imagination.
Gray rhinos are what we choose not to see
Another analogy from the animal world is the gray rhino. The gray rhino can represent the threats that we have been warned about but are not prepared for. The idea is that when a gray rhino rushes toward where you are, it looks like a gray dot at first, but it gets bigger and bigger as it gets closer. The signs of impending danger were there, but due to cognitive biases, cultural pressures, or attention elsewhere, they were ignored.
Foresight for Better Preparedness
The goal is to transform events from unknown to known through environmental analysis and a well-trained signals intelligence capability. The black swans are, by definition, what we don't know. But through intelligence and analysis, what were previously black swans for the organization can become rhinos that can be prepared for. Both the pandemic and the deteriorating security situation are unfortunately examples of what were actually gray rhinos, but for many took the form of black swans.
2. Create Scenarios to Support Mental Preparedness
Once the key events and the mechanisms that can cause them have been identified, the next step is to create scenarios. Basically, scenarios are stories about the future and how to get there. They are powerful tools for dealing with uncertainty and relate to what we can imagine but cannot say when or if it will happen. Both the critical events and ideas about the mechanisms that make them happen serve as building blocks.
Stories about the Future Build Psychological Preparedness
By allowing people to visualize and empathize with possible outcomes, scenarios can contribute to psychological preparedness. The power of visualization is well documented and an important tool in performance psychology.
To construct scenarios, there are several techniques and principles that can be borrowed from authors, sports psychologists, or how children relate to the world through play and games. Whatever the inspiration, the key is to create evocative stories about the future that both capture the analytically important and allow for empathy. Stories allow us to deal with unbelievable but conceivable and important events. They can prepare us by making us think about how we feel, how we think, and how we would react if it happened.
3. Managing Impacts in Business Planning
Using scenarios in business planning is about analyzing their consequences and creating action plans to address them. Basically, it is about asking the question – if this happens, how will our business be affected and what do we need to do? Depending on the nature of the event, this contingency planning can vary in detail and focus on different things. For example, one scenario for a community discussed what it means to have an increase in population combined with extreme weather that creates increased pressure on stormwater. This scenario is about preparing for a reprioritization of resources. In the specific scenario on increased preparedness, for example, the question is how to make decisions and lead under uncertainty with the need for quick decisions. Or how to deal with employees who are deployed outside their own organization.
Train, monitor, inform
Finally, it is important to make good use of the time invested. By practicing your scenarios – either in roundtable discussions or in larger exercises, such as the fire drill. It is about monitoring the outside world for signals that one or another scenario may be about to materialize, and having routines for disseminating information about it in the right context at the right time.
Start Scenario Planning Today
Scenario planning and business intelligence help the collective intelligence of organizations update their mental models of the future and the world around them. This strengthens their preparedness and ability to deal with uncertainty. Because scenarios are theoretical exercises, they require little more than time and thought. In an initial phase, the work should focus on identifying the most important "what ifs" to deal with, and in the next step, screening the organization and setting up functions to scout for weak signals. Those who wish to heed the call of the Defense Committee today should therefore consider increasing their mental and organizational preparedness through scenario planning. By doing so, organizations will be able to exercise their muscle to deal with uncertainty, which the current situation clearly shows is a skill that needs to be further developed.
To learn more about how we can help your organization increase its mental preparedness for serious events, please contact Axel Gruvaeus.