How to Look Ahead Without a Crystal Ball

Every February, Punxsutawny Phil emerges from his underground den, ready to predict the future.

Wouldn't it be nice if your business had a "Phil"? A simple way to quickly discern what lies ahead and when to expect results or a disruption. Just imagine having zero uncertainty about the future - a crystal ball, as it were.

How would such certainty shape the decisions and actions you take - your strategy - to achieve your objectives?

Executives long for a crystal ball.

The executives I advise want to accelerate performance. Undoubtedly, the greater the certainty, the more confidently leaders take decisions and move forward. When the outcome is both clear and in sight, it’s much easier to speed up or give a final push to the finish. They readily ask their teams to stretch further.

Armed with clarity about the future, people achieve objectives faster. No wonder executives long for a crystal ball!

Consistently achieve the right balance.

Strategy is a journey that seldom goes as planned. And the more ambitious or distant your vision, the more likely it is that your business context will change substantively along the way. The best strategy combines focused attention to what matters most for your business and sufficient flexibility to adapt to changing circumstances. This is strategic agility . CEOs that consistently achieve the right balance of these two reach their destination (the vision) on time.

Yet in the real world, there is no crystal ball.

Absent the perfect foresight of a crystal ball, what do savvy CEOs do?

Embrace scenario thinking.

More art than science, scenario thinking illuminates how things work together to result in different possible outcomes. Unlike contingency planning, scenarios bring together multiple uncertainties simultaneously. Each scenario considers both objective and subjective factors and creates space for emotion – in much the same way as a vision can inspire.

Scenario thinking allows leaders to look into the future in a structured way. This is why I guide executives to embrace scenario thinking. Each scenario tells a story based on a different combination of the most critical drivers of change for the industry. Done well, the scenario charts a course from the present to the future and highlights the interdependence – and interactions – of the drivers that result in varied outcomes.

Trigger deliberate action.

Importantly, scenario thinking describes possible outcomes that are both exciting and terrifying. (I often term the latter one: “All Hell Breaks Loose.”) In my experience, both extremes – excitement and fear – trigger deliberate action. Scenarios provide a framework that helps people to respond dynamically to an unknown future – like managing the unexpected (as I described here .)

Deliberate action is a key benefit of scenario thinking. Yet, its value is not solely about the action itself.

Effective scenario thinking sparks conversation and enhances planning.

Constructing scenarios, participants describe what may happen. Using scenarios, leaders identify the critical decisions they will face in various futures. They decide which options they will pursue or levers they will pull to address the situation. It’s not only dreaming about the future. It’s about knowing what you’ll do when the future comes to be.

Skilled CEOs embrace scenario thinking to anticipate and plan for a range of possible futures. Rather than distributing crystal balls, they arm their teams with a framework for taking decisions, particularly when the stakes are high or the status quo response is not an option.

Learn more about the art of scenario thinking in my conversation with Pamela (Pam) Harper and D. Scott Harper in this episode of Growth Igniters Radio?.

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?2024 Tara J Rethore.?All rights reserved.?Permission granted to excerpt or reprint with attribution.