Diagnose the implications of scenarios for your function
For each scenario cascaded down from the enterprise level, functional leaders need to diagnose and articulate the implications on two fronts:
- Supply-demand needs analysis. Review scenarios and understand how each might impact the organisation’s demand for the function’s services. Consider how your function may need to increase or decrease its available resources in response.
- Strategy-risk exposure and opportunity. Determine the risks and opportunities created by a specific scenario. Consider whether those risks and opportunities significantly change the work that your function will do to support the strategy.
Once the implications, risks and opportunities are clear, adjust the function’s strategy, goals and projects or initiatives for a given scenario. Translate these into action plans by deciding which levers (e.g., people, processes, systems, budget) you should pull to meet business needs, manage risks and capitalise on opportunities.
Action plans should match the severity of the implications and tie back to the function’s core strategy.
Bring scenario planning down to earth
Scenario planning can often come across as a “blue-sky exercise,” so make the exercise pragmatic by:
- Leading functional teams to define actions they must either start or stop doing right now to prepare for the future scenario
- Assigning action items (e.g., running a cost optimisation pilot project) to specific staff members
- Participant diversity is critical. Typically, managers’ perspectives are based on their experience, and they can provide input on resourcing. Frontline staff can contribute from operational and workload-impact perspectives. The variety of viewpoints helps reveal interdependencies and uncovers a complete set of potential implications.
The outcome is a playbook of scenario-independent strategic actions (i.e., surefire moves) and a set of actions that are contingent on each scenario’s emergence (i.e., scenario-specific moves). This approach can make strategy execution more resilient because it allows functional leaders — in the event of scenario changes — to simply substitute the original actions with scenario-specific actions without the need for a full-blown strategy review.
Prepare to capture opportunities
As teams craft risk response strategies, they should also spend time identifying opportunities to revamp strategy, budget and talent plans.
For example, as functions considered the threats of Brexit-related scenarios, they likely identified risks such as visa changes for non-U.K. staff and supply issues from third-party service providers moving location. But opportunities also surfaced to create new business partnerships and bridge capability gaps by tapping into latent talent pools in areas of the EU.
Focusing on action items that will help the functional team get ahead of uncertainties is more motivational for functional teams than being left to react to negative effects — and is less stressful for those who must execute the action plan.