With the current Covid-19 pandemic causing major disruption in most of the lives of UK citizens, we need to find better ways of planning. As importantly, we need to find better ways of presenting and communicating our plans and ensuring they are comprehensive yet flexible.
Four months ago businesses were looking forward to a busy and prosperous summer. By the beginning of April many companies and employees didn’t know where the next penny was coming from. The government scrambled to try and avoid deaths, mass infection, collapse of the NHS and collapse of the economy. Some would argue they haven’t done so well in most of the objectives.
So how do we make plans that can change as we gain new knowledge? Many scientists and businesses rely on models. Many models are self learning so they adapt to the ever changing information they are given. These models do rely heavily on human interaction and assumptions too.
Military strategists have produced scenarios for war or the threat of war since the early 1900s. We can learn thing a two about strategy when we look at it from a scenario producing perspective.
Scenarios inevitably deal with the unknown – like our current Covid-19 pandemic – and then with our reaction to the unknown with what we know. Scenarios give us options to explore, information to seek and discussions to have about possible outcomes. They are not linear but instead they represent life a bit more as they are messy and things change constantly. They may not be the correct tool either but they do give us some insight into areas of our business, society and minds that we may not have considered had we done just another strategy session.
How does a government or business apply a combination of scenario planning, modelling and traditional strategy methodologies to find answers and communicate these to their staff and citizens?
The first thing to do is to understand what you know, what you have control over and where you need to seek new knowledge. The controllable then needs to be controlled and the uncontrollable needs to be planned for. The unknown is either stuff we know we don’t know or stuff we absolutely have no idea even exists. The latter is difficult to figure out, the known unknown stuff we must research and find data for.
This figure may illustrate the outcome of creating and sorting factors that we need to classify:
Scenarios are born from the things we control the least but which have the highest impact on our organisation. In the simplistic diagram above, the ‘Length of Lockdown’ and either ‘Additional Finance’ or ‘Staff Availability’ would constitute the makings of some scenarios. The process of finding all these factors, understanding them and classifying them is not trivial and should be done with the largest amount of expertise and other participants as possible.
Issues which impact us and we have control over need to be looked at and we need to ensure we are in fact being effective and efficient in these areas. This is the area in which the quickest gains can be made.
The rest is nonsense – we don’t need to worry or go about planning for things that have no impact on our situation – no matter how much or how little control we have over them.
Our scenarios now unfold from the two uncertain but high impact areas we choose to focus on. These factors will control our response and our preparation going forward. A typical scenario matrix would then look as follows:
The trick now is to explain what you are planning to do in each scenario. The tactics or strategy for a lengthy lockdown with no additional finance will be very, very different to the one for a short lockdown with much additional finance.
Once you have a matrix like the one above that highlights the two factors over which you have very little control and which impact you most – you can start to discuss how prepared you are for each scenario. Your traditional planning, budgeting and decision making tools can now be used to their full extent, in each scenario. This will help you make decisions and it will help you monitor the situation. Of course the factors may change, they may become redundant or less impactful – no problem – change the scenarios. In my make believe situation above, imagine the bank approves a long term loan BUT at the same time over 50% of the staff are ill or unavailable to work – it night be a good idea to change the scenarios to understand what you might do next. Scenarios should be as flexible as the situation they are trying to predict / explain.
The whole idea that you can plan for an ever changing situation is complex and filled with pitfalls BUT it can be done and we say it MUST be done if you want an understanding of what the future may bring and what you need to prepare for.
Please feel free to contact us and discuss your situation and see if we can help in any way to see how scenarios may in fact be able to shed some light on a difficult situation.