What are some best practices and common pitfalls of scenario planning?

Mistake #1: Strategy and planning are different. Strategy = focused on outputs and how to use your unfair advantage to win in your chosen field. Planning = efficiently optimizing your resources. “If you are entirely comfortable with your strategy, there’s a strong chance it isn’t very good” – Roger Martin

Best practices for scenario planning include involving a cross-functional team to capture diverse perspectives, developing a range of scenarios that cover optimistic, pessimistic, and moderate outcomes, and using data-driven insights to inform scenario creation. Regularly updating scenarios to reflect changing market conditions is also crucial, as is testing them to identify potential gaps and opportunities. Common pitfalls to avoid include failing to define clear objectives, neglecting to involve key stakeholders, and creating scenarios that are either too broad or too narrow, which can diminish their relevance and effectiveness.

The goal and scope of the exercise should be clearly defined, and a variety of stakeholders should be involved. Assembling a range of realistic scenarios and incorporating scenario insights into decision-making processes should also be part of best practices for scenario planning. Ensuring that the scenarios are believable, internally consistent, and pertinent to the strategic objectives of the firm is imperative. Scenario planning should also be a continuous process that is periodically evaluated and revised to take new trends and conditions into account.

always define what it is you are trying to accomplish in your scenario....are you testing decision making, communication, resource planning/usage...etc. If you do not define that....the exercise, TTX, MAPEX, whatever can go off the rails quickly.

Scenario planning is a powerful strategic tool which presents best practices and pitfalls i.e, engaging diverse stakeholders ensures a comprehensive exploration of potential futures, while developing plausible scenarios grounded in both quantitative analysis and qualitative insights fosters a holistic understanding. The iterative nature of scenario planning allows for regular review and adaptation based on emerging trends and information, ensuring decision relevance and actionable insights. However, organizations must guard against confirmation bias, complexity overload, and the over reliance on predictions while translating scenario insights into concrete actions

Engage a diverse range of stakeholders and subject matter experts to gather different viewpoints and insights. This ensures a comprehensive and well-rounded understanding of the factors and variables affecting the scenario planning process. Failing to involve key stakeholders in the scenario planning process can lead to limited perspectives and biased outcomes. Engaging stakeholders from diverse backgrounds and roles ensures a comprehensive understanding of the organization's ecosystems and goals.

This is where being genuinely curious about others, showing empathy, understanding how relationships impact one another, etc - will really help us figure out where we may have deeper to dig. We won't ever know, however, if we don't care, and choose to have our blinders on.

Gathering diverse perspectives help you make a wider perspective for yourself that makes you see the whole picture and have the opportunity to make the right decision accordingly, and gathering data is the most important thing that should be weighted cause you will not be able to know what happened so you will not expect the future events nor plan for it, so its like a soldier without a gin in the war, your daily challenges and uncertainties is your war and data gathering, analysis and understanding is you your gun to use against this challenges to be ready with your right decision

Echo chambers breed blindness. Diverse perspectives and robust data fuel scenario planning, illuminating blind spots and revealing hidden opportunities. In the biotech realm, where innovation thrives on collaboration, leveraging diverse insights is not just beneficial—it's imperative.

Develop specific outcome measures that you can use to compare scenarios. The most objective evaluations determine some common baseline that each scenario can be compared against.

One thing I found helpful is to think of and to test worst case yet still plausible scenarios. We are afraid of planning for worst case because if we don’t plan for it, “it doesn’t happen”. Then it happens and we are not ready.

Generating and testing multiple scenarios in scenario planning allows organizations to develop a more comprehensive and adaptable strategy, mitigate risks, foster innovation, and make informed decisions in an uncertain and dynamic environment. It enhances preparedness and flexibility, enabling organizations to navigate and thrive in a rapidly changing world. Many avoid thinking or even worse planning for the worst case scenario, but by planning for a broad range of scenarios, organizations can identify and prepare for potential risks and uncertainties that may arise. This proactive approach helps mitigate the impact of adverse events and allows for better risk management while innovating new ideas, creative thinking, and problem-solving.

My #1 tip for getting the most out of risk and scenario planning is to have different people evaluate the LIKELIHOOD and IMPACT of different scenarios and outcomes. Do not share IMPACT information with the LIKELIHOOD assessors and do not share LIKELIHOOD information with the IMPACT assessors! Pick the most believable people to establish the best information in each area. Then a third party can combine the information together into a picture of what obstacles and opportunities you're likely to face and how much preparation is worth across the board.

Not all scenarios are created equal. Rigorous evaluation ensures that our focus remains on the most impactful and plausible outcomes. In a field where every decision shapes the course of humanity's health and wellbeing, prioritization is not just strategic—it's ethical.

Insight without action is like a ship without a rudder—directionless and adrift. Effective communication and utilization of scenarios empower stakeholders to navigate uncertainty with confidence. In biotechnology, where every discovery holds the promise of a healthier tomorrow, scenario planning is our compass to a brighter future.

Common pitfalls for scenario planning - overthinking: thinking too much and distract you away from real problems - pure thinking: we can’t think of a solution that’s not already in our mind. Draw for visual learners. Talk for audio learner. Do for kinaesthetic learners. - positive thinking: thinking and presenting only the good side because it looks good to your boss and clients. But this is risky for all of them.

APPLY THE STRATEGIC 3 HORIZONS MODEL for innovation As innovation facilitator of 100+ projects, I recommend you to use the 3 HORIZONS of McKinsey to guide you. In Horizon 1, focus on optimizing your current products and processes for incremental improvements, cost reduction, and efficiency. In Horizon 2, allocate resources towards developing new products that build on your existing strengths but address emerging customer needs. In Horizon 3, explore disruptive and breakthrough innovations that may have non-traditional markets and business models. Balance your investments across these three horizons to ensure a steady flow of incremental improvements, growth opportunities, and breakthrough innovations.

envolver diversas partes interessadas, explorar uma variedade de cenários plausíveis, manter flexibilidade nas estratégias e atualizar regularmente os cenários conforme o ambiente muda. Armadilhas comuns incluem ficar preso a cenários extremos, subestimar a importancia da implementa??o de planos de contingência e ignorar sinais de mudan?a no ambiente externo. A prudência na interpreta??o e a??o com base nos cenários s?o essenciais para o sucesso do planejamento estratégico.

In my opinion, here are some best practices and common pitfalls to consider: Best Practices: 1. Define clear objectives. 2. Involve key stakeholders. 3. Identify critical uncertainties. 4. Develop plausible scenarios. 5. Use data and research. 6. Regularly review and update. 7. Test strategies against scenarios. Common Pitfalls: 1. Overcomplicating scenarios. 2. Ignoring future disruptions. 3. Lack of actionability. 4. Confirmation bias. 5. Failure to communicate. 6. Neglecting to test assumptions. By following these practices and avoiding common pitfalls, organizations can enhance their readiness for future uncertainties and make more informed strategic decisions.

Strategy is more than just making plans. If you only think about what's happening inside your company, it's like making plans in a bubble—it doesn't take into account the real world. What really shapes your strategy are things outside your company, like what your competitors are doing, changes in technology, and what customers want. Always think about these outside factors, create a strategy that can grow and change with the times, not just one that works for now.

Based on my experience working across different sizes of business (large companies and startups), striking a balance between overanalyzing and obtaining sufficient insight for the next steps is key in planning sessions. With limited resources like time, people, and expertise, it's often impractical to cover every scenario. What I've found effective is focusing on the extremes during these sessions. As a facilitator, guide the team to: 1. Identify the best and worst-case scenarios. 2. Determine what would need to happen for these scenarios to unfold. 3. Rank these factors based on their potential impact. This method directs the discussion, making the planning process more manageable and comprehensible for all involved.