Friday, August 21, 2009

Scenario Planning vs. Strategic Planning

One of the questions I often get is how is scenario planning different that strategic planning. For those new to planning it can often look similar as you begin the process. Both begin with an environmental scan and both end with an action plan but there the similarity ends.

Strategic planning is about deciding on a future with strategies on how you will achieve that future. It involves really looking at strengths, weaknesses, opportunities and threats and then deciding on some strategies for creating a desired future. It focuses on the goals and objectives for achieving those strategies. Generally, a strategic plan focuses on three to five years out and what you want to cause to happen - strategically- for the organization. It often involves some program strategies, marketing and infrastructure strategies and fundraising/funding strategy.

Scenario planning asks a different set of questions. It begins by asking what is known and unknown about the future. What can you predicate will happen and what can not predicate or be certain might happen in the future. Scenario planning then has you brainstorm a number of options or scenarios of what impact or change your organization might experience. Once you come up with scenarios, then you actually run financial projections to see the impact of those scenarios on the organization. It ends with an action plan on how you would implement the scenario should the future predictions come true or the scenarios happen.

A well prepared organization would have both - it is not an either or choice - the strategic plan is your road map for how to achieve specific strategies for your organization and the scenario planning is to prepare your organization for changing rapidly in response to external influences. Many scenario plans go in the drawer once completed and are pulled out when specific trends or changes begin happening and the organization has to respond in order to remain viable.

Most of us complete formal strategic plans and have created the scenario plans in our heads. That has all changed with this economy and scenario planning has now become a necessity and a more formal process.

So is your organization ready to change rapidly and smoothly in response to external forces?

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