Uncertainty. It’s probably the dirtiest word in the business lexicon these days. It’s what’s making the stock market tank (Friday’s close ended the worst week on the Dow since the Depression). It’s what’s making folks cancel vacation plans, flights, conferences, meetings, and corporate events. Uncertainty is driving down consumer spending, causing clients to pull back ad budgets, and making all of us reconsider our long-range plans and corporate strategies.
It’s obvious what’s driving this unease. The terrorist attacks of September 11 have launched us into unknown territory. One night we went to sleep in a troubled but (for the most part) predictable world. When we woke up, all bets were off.
So what can we as businesspeople do in the face of radical uncertainty, in a world alien to any of our experiences? Looking into the past for answers isn’t necessarily the most useful thing to do — the world has never faced a conflict the likes of which we’re being thrust into. Current economic indicators still haven’t settled down enough for us to prognosticate trends. There just aren’t enough data points to go on.
But that’s exactly the point. Right now, we can’t know. So we need to develop contingency plans for as many eventualities as we can handle. We need to begin to move away from linear strategies and start thinking about scenarios.
What are scenarios? Probably one of the best definitions I’ve read comes from Peter Schwartz, chair of the Global Business Network and author of “The Art of the Long View,” one of the seminal works on scenario-based business planning.
“Scenarios are a tool for helping us to take a long view in a world of great uncertainty,” states Schwartz. “Scenarios are stories about the way the world might turn out tomorrow, stories that can help us recognize and adapt to changing aspects of our present environment. They form a method for articulating the different pathways that might exist for you tomorrow and finding your appropriate movements down each of those possible paths. Scenario planning is about making choices today with an understanding of how they might turn out.”
The gist? If you don’t know where your company’s going, you need to consider all the possible destinations and what might happen when you get there. Once you understand these things, you can start developing “what-if” planning that prepares your company for any eventuality.
Scenario planning is hardly a radical concept — the military and many large corporations have been using it for years. But for many of us used to operating on gut instinct, making reactive decisions on so-called Internet time, stepping back and considering the long view can help all of us survive uncertain times.
How can you start the process in your own company? One good way is to bring together people with diverse experiences to talk about their views on where the world (and your business) is heading. What are the possibilities? What are the consequences of those possibilities?
After gathering several possible scenarios based on your current knowledge, start extrapolating to get a sense for how they’ll effect what you and your clients do. How will future events affect your clients’ businesses? How will they affect your business? What seems likely? What doesn’t? You don’t necessarily have to do complex mathematical modeling or apply arcane economic theories here; let the experience in your company be your guide.
Once you have developed several plausible scenarios and have begun to get an understanding of how they might affect your business, you can begin planning. You don’t have to have every “i” dotted and “t” crossed — you just need to be generally prepared. The point is to begin considering what could happen and then to prepare strategies.
Not everything can happen, so keep your scenarios in plain view of your company. Add or subtract from them as more information becomes available. Eventually, you’ll know which one is right, and by then you’ll have the jump on your competition because you’ve remained flexible.
Uncertainty. We all feel it now more than ever. But just because you don’t know doesn’t mean that you have to be paralyzed. Think scenarios, not monolithic strategies.
Editor’s note: For more on the impact of the September 11 events on our industry, check the special section of internet.com’s E-Commerce/Marketing Channel, The Trade Center Disaster: Industry Response.
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