Four scenarios to help your leadership team with scenario planning for an uncertain future. To state the obvious, it’s easy to see why brands are doubling down on addressing the realities of the economic crises they are facing right now. For many, it’s a matter of survival: people aren’t shopping or buying or eating out, inventories are backing up, stores are closing, and people are getting laid off.
As these cascading events of “has never happened in our lifetimes” continues to build, we can’t help but ask ourselves whether there will be a return to what was normal a short while ago. Or, whether we in the midst of a more fundamental transformation of human behaviors and economic assumptions.
For many of us, this uncertainty creates anxiety and is causing many of us to find safety in the form of hunkering down and weathering this storm. However, this uncertainty does not have to leave you or your leadership team stuck on pause.
Our Economic Outlook Depends on How We Change
In a few short weeks and months, each of our own perspectives about our work, family, neighborhood and life, in general, has changed. For many of us, we are spending our time differently—from focusing on ourselves to reducing anxiety and stress:
- Reducing stress: Learning new skills or hobbies, cooking at home, more family time.
- Physical and emotional safety: crowd avoidance, low-touch/no-touch
- Focusing on necessity vs. entertainment: Going shopping (to the grocery store) only when needed and not as entertainment
- Reacquainting ourselves with our local communities: neighbors, small businesses
There are still many of us who don’t care about what’s happening and don’t understand why this is so important and the sense that this is just overblown – the feeling of, “so what?”
We Can’t Un-See What We’ve Already Seen
When we think about how changes in peoples’ behaviors will impact our clients’ businesses, there are a number of possible questions we might ask:
- When might we be comfortable going back into crowded venues? public spaces? Sporting events, music events, or religious services?
- Will we return to activities like shopping, running errands, going to parties, picnics, weddings and funerals? Going to see a doctor or dentist? Might we do more virtually or keep doing these things face-to-face?
- How might education change? Will schools return to classrooms or evolve to more remote learning?
- How will we think of our jobs? Our careers? Might we start thinking more about the physical or virtual job requirements?
- How might travel change? For business or pleasure? Might we fly more or might we drive more?
Understanding the answers and possibilities of questions like these are key to understanding how businesses will need to adapt or evolve to meet changed consumer needs, wants and expectations. For leadership teams grappling with business uncertainty, it will be critical to know how these changes might impact their fundamental assumptions about the economic drivers of their business:
- Will you be able to drive revenue the same way?
- Will your category lose or gain customers in light of behavioral and preference changes?
- How might emerged consumer behaviors drive new experience requirements and shift prior economic assumptions and business cases?
- Are your current goals and desired outcomes still valid?
- Do you change your investment strategy now, or wait?
Scenario Planning Can Help Leadership Teams Navigate Uncertainty
Successfully leading through uncertainty requires careful consideration of how these three key dimensions might impact your leadership team’s expectations and assumptions about the market:
- How might your market’s (peoples’) beliefs, mindsets and behaviors change?
- How might basic economic assumptions about your markets change?
- How will you leverage and shift your current resources?
While every industry will have specific dimensions to consider, as an example, we’ve put together four basic scenarios to illuminate how these types of change might impact our planning assumptions:
- Business as usual: This is the hunker down scenario. By toeing the line on to the status quo, the hope is you’ll survive long enough to weather the storm. Your focus will be on “the core” business, and interventions could include cutting “non-essential” spend, reducing footprint, implementing new controls and rationing activities.
- Adapt and respond: Not all brands have the staying power to outlast an economic shutdown that could go on for weeks or months. Many will need to quickly track and react to market changes, as well as audience needs and wants. This may only be a successful approach if your company already moves nimbly.
- Opportunistic pivots: A pivot requires more from a brand than simply responding to the current circumstances. You’ll need to identify new customers and markets who want what you have. Then evolve and rethink how to reposition your offerings for more value and execute in an adjacent, but related way.
- Embrace new realities: For some, scenario planning may involve consideration of a total reinvention, where it’s necessary to rethink how your brand can succeed in an environment of new realities. By anticipating and planning for newly emerged behaviors, mindsets and economics, you’ll be able to begin driving that process now and create new opportunities.
By utilizing scenarios to drive planning, your executive team can align on both the possible futures and required leadership decisions that will need to be made, in order to chart a path forward. Otherwise, uncertainty will lead to a failure to plan and execute effectively and there will be no “reset” button to try again.
Managing Director, Global Head of Design