‘Scenario planning the new normal’
BOARD Leadership Zimbabwe in partnership with The Financial Gazette will, from this week, be bringing you cutting edge interviews with renowned thought leaders from Zimbabwe and across the globe on issues of good governance and leadership, among other issues. This week The Financial Gazette reporter, Nelson Gahadza (NG), spoke to Swiss-based Woody Wade (WW). Below are excerpts from the interview.
NG: Welcome to Board Leadership Zimbabwe, Mr. Wade. Would you mind if I called you Woody?
WW: Of course, you can, please do.
NG: Briefly tell us more about yourself ― the work you do, your short bio, etc?
WW: My work is focused on something called scenario planning, a technique used by a lot of organisations of all kind around the world to help them foresee how their future business landscape might develop. We are all aware that the future is different, but the question is how it is going to be different. Any organisation needs to think how different the future will be in the different market terrains to make solid plans for the future. Any manager makes a plan to survive and realise profits on a sustainable basis. So, managers need to foresee the future and make an informed decision ahead. Therefore, while there are many techniques to do so, one that is common in the world, is one called scenario planning.
About myself, I live in Switzerland, where I have been based for 30 years. I grew up in the United States. My career has been largely in marketing and I have worked for a bank, the World Economic Forum (WEF), which is the biggest organisation which holds annual economic conferences of world leaders in Davos, Switzerland.
About 15 years ago, I decided, it was time to try my hand at something different independently. So this scenario planning concept was something that interested me and I thought I would bring this to business for which it has not been exposed to before. So for the last 15 years, I have done scenario planning for companies in 30 different countries and this will be my first in Southern Africa. The idea is when I go into a company, normally for two days, we work with the team from the company, we go through a very structured process and at the end of the two days, we would have developed alternative futures and strategies for each of the futures for their business.
Normally, the time frame we will be looking at is 10 years. But this is now different because of what has happened with Covid-19. The situation is now that from one day to the next, the business situation for almost any company in the world changes very fast. Some of the changes include bylaws governing the pandemic, or sometimes, simply that some customers are no longer operating, some suppliers are no longer reliable or even operating at all. But people are now looking at the post-Covid-19 world. When the pandemic is over, there will be a new normal in the way business will be done.
NG: You will be “in town” soon to facilitate Zoom- based in-company scenario planning workshops at the invitation of Board Leadership Zimbabwe. How did this collaboration arise and how do you see it benefiting organisations?
WW: I was contacted by Johnson, who works with various boards in Zimbabwe to increase their effectiveness. As you know, boards have special roles in the day to day running of companies and make long term decisions that ensure that businesses keep on track. It is at the board level that decisions are made in terms of the future, with alternatives on how the future will be like being crafted.
Together, we realised there is need for people in senior management and at board level in the country to be exposed to the scenario planning methodology. We will find ways to do that in Zimbabwe. What we are doing now is that we are developing a kind of portfolio of different events and ways that we can help companies to be exposed to the methodology. In some cases, companies may require me to work with them for at least a few days or hours, for instance, to develop specific scenarios that would give them ideas where things are heading for them.
NG: Woody, you’re clearly passionate about scenario planning. How has this passion developed?
WW: The origins of scenario planning are in the military. You can imagine the general of an army of World War 2 wanting to have an idea of the capabilities of an enemy, where and how the enemy might move, deploy, etc. So it was a question of getting prepared for different possibilities. Then it wasn’t soon after the war that some companies saw that the methodology made sense in business. We are talking about rapidly changing business environments here, Nelson. So, the best thing, in order not to wait for change, is to anticipate the best scenario that could be realistic. We can handle some assumptions and see how things can develop, and if they develop in a different way, what it would mean for the business. That way you can prepare a strategy that will ensure if that scenario occurs, you already have the means in the drawer. So, it is a very structured process, but also calls for creativity and imagination around something bound to happen in the future.
Let’s say there is a scenario where the oil price drops by 10 percent per barrel and if you just leave it at that without planning for that scenario, your business will be headed for disaster. But if you say what does this mean for our company, you will decide and start to plan how it will affect you ― customers, suppliers or anything.
NG: Can you briefly outline how we define scenario planning in the context of business strategy development?
WW: The main purpose is to get away from the idea that you can really foresee the future clearly. A lot of people work with projects and projections are based on everything will continue as it previously has. It is like assuming that the future is like a long straight world that you can see where you are going. But most of the time, particularly now with Covid-19, things start to happen differently. You end up in different landscapes that you haven’t planned for. The scenario planning technique will help manage this risk when you plan for the different alternative futures.
NG: Is scenario planning applicable only to companies?
WW: This methodology is valid for any organisation that is facing change and that is basically all of us. I have done scenario planning for corporations, NGOs, charitable organisations, educational institutions, etc. I have looked at the future of some countries. So, basically, anything that can change with time can benefit from a look at how it may change.
NG: Businesses in Zimbabwe are faced with having to balance the realities of multiple factors: the dire need to survive the harsh economic environment and to grow, post-Covid-19, the urgent need to implement the right response to the pandemic and the imperative to contribute towards the wider Covid-19 response in the interest of public health. What are some of the factors we need to consider in planning a scenario for the purposes of economic recovery and growth?
WW: Zimbabwe is a country that has its own economic history that is different from any other country, even in Southern Africa. You are already coming to the table with a set of uncertainties that are not the same for companies in other countries. So that history already changes the plan for the future. For any company operating in Zimbabwe, the national landscape is the basic terrain to foresee what will be happening in your company or industry. The basic terrain is shared by everyone doing business here and, therefore, each business has to identify with the operating environment. For any company in Zimbabwe, one needs to tailor the methodology to a specific company and industry.
NG: You have been involved with scenario planning across the globe for several years now, Woody. What do some of your clients say about the work you do with them?
WW: I would divide the history of my work into two categories; that is before the Covid-19 pandemic and during the pandemic. Before the pandemic, the plans were long term in nature with an idea how things would evolve in eight to 10 years. That stage is how to open their eyes to thinking the future and various other alternatives. After the virus, the scenario planning exercise is now on shorter term, where things will be in the next year, six months-long term now being 18 months from now.
What I’m starting to see already is some feedback from people who I worked with two or three months ago saying yes, the scenarios we came up with were realistic, we are glad that we went through this because we were at our wits end, we really didn’t know how to navigate this terrain. After the pandemic struck, with supply chains collapsing, etc, managers kind of run around like headless chickens and tend to go into survival mode.
And, of course, I can understand that because you have to survive but, at the same time, if you’re a senior manager, you’re responsible for not just surviving but also for making sure you will be around in a few months and, therefore, it’s necessary to start thinking about the period as the crisis begins to evolve into a post-crisis landscape. Therefore, the feedback I’ve received from those companies has been very positive because they already see that things are changing in the direction that we anticipated.
NG: In conclusion Woody, looking back, of all the scenario planning assignments you have handled to date, which assignment are you most proud of and why?
WW: I’m very proud of the mindset change in clients I’ve worked with and it’s really an important thing to be able to do since very few people are able to change their mindsets. If you’re a senior manager of an organisation, your mindset should be very determined to succeed so, you’re determined on the one hand but on the other hand, your mindset needs to be very open to possibilities. So, you need to have this mix of determination and openness. I’m very proud that I’ve brought this balance to organisations.
But if you ask me what is the one scenario planning exercise that I’m the most proud of, I guess, I would have to say I did some work with the International Committee of the Red Cross in Geneva.
I just felt very happy that I could bring this new way of thinking about the future to an organisation like that because of all the good things that they do. They are also subjected to change. Every one of their projects around the world changes all the time.
This was before the virus but it did help them open their eyes to a new way of approaching planning and approaching preparations for the future. I was very happy to be part of that.
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