Long-term planning in an age of uncertainty

Long-term planning in the current political and economic climate can seem like a bit of a mug’s game. But it’s not because things change. That, after all, is to be expected. It’s because everything’s changing. We can’t take anything for granted any more. This doesn’t mean that we shouldn’t bother with long-term plans, though. It just means that we need to approach them in a different way.

Planning for the future when we have absolutely no idea how that future is going to look will always be a challenging task. We used to know what the variables were and the ranges within which they would fluctuate. But not now. From Brexit and Trump to the rise of the Labour left and the movement for Catalan independence, everything seems to be changing. None of the things we though we knew can be taken for granted any more.

This doesn’t mean, though, that we can give up on long-term planning.

Long-term goals, strategies and plans tell us where we want to get to. They tell us what is important to us and how we should prioritise our time, effort and resources. They help to ensure that everyone is working together. And they help us to avoid the descent into short-term firefighting that can so easily result from lack of a clear vision. Without long-term plans, we and our organisations are like rudderless ships in a storm.

Operating in a period of flux does, however, mean that we can’t rely on the forecasting methods and models that have, until now, served us well. Because they are based on a more stable environment, where the future will look more or less like today, just with some of the variables shifted around a bit.

We don’t know what tomorrow will look like, but the chances of it bearing even a passing resemblance to yesterday seem slim, at best.

If we can’t plan for the future, then, we’re going to need to do something a bit radical. We’re going to need to plan for several futures. We’re going to need to identify a number of different ways that our organisation, sector or country could look in the future… and plan for all of them. And this brings us quite firmly into the realm of a technique called scenario planning.

Scenario planning is an approach to long-term strategic planning that encourages us to identify different – yet entirely feasible – versions of how the future could look. We’re not saying that these futures will happen, just that they might happen. That they could happen.

There are lots of different ways of developing a suitably diverse suite of scenarios. At the most basic, you can just sit down with a cup of tea and think some up. But it’s better if you approach things in a slightly more organised way, to make sure that you come up with a suitably broad range of scenarios to consider.

My favourite approach is one called the ‘two axes’ technique, which works particularly well if you are operating in an environment with a limited number of factors that could result in significant change. The idea is to select the two main factors – or drivers of change – and plot them on two intersecting axes.

Take, for example, the situation set out in the figure below, where the two main factors influencing the future are (a) whether we end up with a ‘hard’ or a ‘soft’ Brexit and (b) whether austerity continues or more funding is provided.

Scenario planning chart

As you can see, we end up with a 2×2 matrix and four potential scenarios. I’ve given them names to make it easier to identify them. Though it’s important that the names are neutral, so that we don’t imply any value judgements about the different scenarios. If we were doing this properly, we could also write a short profile about each scenario, explaining what it would be like and what it would mean for us or for our organisation.

Once we have these scenarios, we can think about how we would plan for each of them. It might be that we can come up with a strategy that would work in all four scenarios. But it’s more likely that we’re going to have to have a different strategy for each of the different scenarios. Or, at the very least, a strategy that includes different options for the different scenarios.

Obviously, only one of these scenarios is actually going to occur in practice. But by planning for each of the scenarios, we know that, whatever happens, we have a long-term plan that is going to work regardless. We have recognised the uncertainty in the environment in which we are operating. We have embraced it. And now we can, in effect, forget about it. And get on with whatever it is we’re actually trying to do.

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