We talked to Joachim about one of his great passions, scenario planning, and what he believes are some of the central questions clients need to think about in the years to come.
- Joachim – What is scenario planning in a nut shell and why is it in your opinion relevant in the business environment of today? “For decades, virtually everybody in the field of strategy from business leaders to academics have discussed increasing levels of uncertainty and how to approach them. Yet, leaders tend to deal with this rather than embrace it. This leads to widespread use of forecasting models that aim at given one version of the future and one version only. Scenario planning embraces the uncertainty and has leaders navigate a set of plausible futures while continuously tracking which scenario is about to play out.”
- What is the best way for business leaders to handle complexity and the uncertainty that follows? “Basically uncertainty is very unpleasant since it is often equated with lack of control. Simplifying the future by betting on one outcome is risky, however, as most of our clients have experienced. Nor should you be paralyzed. The alternative is to think through various futures in depth and accept that anyone of them may play out. Embrace that we cannot be all-knowing, yet believing we can make informed strategic decisions.”
- What is some of your recent experiences where scenario planning in action really made an impact that mattered? “We recently worked with a major corporation in Scandinavia which had ‘bet the farm’ on the future playing out in a certain way. But it didn’t. Using scenario planning as one of the tools in the strategy process we completely altered the way the client had historically been approaching their often volatile markets.”