Like many, you may have postponed strategic discussions – at least until the end of the summer, possibly the end of the pandemic? Maybe? But I think most are coming to the realization that you can’t do that indefinitely. COVID-19 is going to be around for a while, you have decisions about staffing and events and software, and maybe you have a budget to come up with. You have to get on with some kind of planning process.
Not by writing a rigid plan (here’s a link to a pandemic-friendly resiliency planning process which may help). Planning shouldn’t be overly detailed or belaboured at a time like this. However, planning remains crucial. In a storm, you still have to actually steer your ship.
When people ask me about tools for planning under these conditions, they often mention “scenario planning.” On further discussion, it often turns out that that’s used as something of a catchall term for a number of different planning approaches.
In this post, I’ll talk about a few analysis and planning tools that are extremely useful for strategic planning in times of uncertainty, regardless of what is causing that uncertainty. We’ll go through what they are, how they are used, and when you might find them particularly useful.
It’s worth noting that any of these tools is only worth using if it will affect your decision-making. If you would make the same decision regardless of the outcome of the analysis, then the analysis isn’t all that useful, is it? But where you need more inputs than you have to comfortably make a call on something, these can be extremely useful. Because primarily they are decision support tools, the decision should be framed out clearly.
In most associations, particularly on the smaller end, the budget is provided as a single set of numbers. This is what we think each number will be, and this is how they all add up to surplus/break-even/deficit. Very often projections for specific events follow the same pattern: here’s the budget for the new product introduction.
Sensitivity analysis simply helps you recognize that there is uncertainty in your projections (whatever they are – member renewals; webinar registration; total revenues), and shows a range of potential outcomes. Typically there’s an expected value, and then a low and a high value. So if you think you are going to get 80% membership renewal, and you hope you might get 85%, but you are worried it could be as low as 70%, then you would do a sensitivity analysis to plug in those numbers. Then you can see the impact of your worst-case (but still quite imaginable) scenario on your revenues, in this instance.
When to use this:
- When there is uncertainty (i.e. any time you have projections), especially for a significant item or where the uncertainty is high
- When you may need to prepare for either better or worse outcomes (worse may mean lower revenue; better may mean strains on capacity)
- When you need to manage expectations (e.g. of the board) about the range of outcomes that are possible, given a particular course of action
This is a tool that should be used far more often across the association sector. Where sensitivity analysis gets interesting is in the “so what” discussion. What difference would it make, between the different outcomes? What implications would they have?
Mathematically it’s usually very simple, although of course there are ways to add sophistication. Be cautious about the magnitude of swing you can get if you are changing more than one variable at a time.
This is essentially thinking about some kind of Plan B. What will you do if your proposed plan just doesn’t work out? Any time you have said “we’ll do it tomorrow if it rains today” you’re doing contingency planning.
Another way of thinking about contingency planning is simply management of risks. Risk is inherent to existence, and everyone’s risk level has gone up due to the current situation. Figuring out how you are going to address and/or live with the risks you incur is part of any leadership role, and should be part of any strategic thinking.
When to use this:
- Risk management discussions should be ongoing within your organization. Particularly during a pandemic, risk is part of organizational stewardship.
- When you undertake a significant new initiative, a contingency plan (what do we do if…?) should be part of the project management.
- Events should always, but obviously particularly in the era of COVID-19, undergo extensive contingency planning.
If you’ve seen the TV show Community, especially the episode when Troy gets the pizza and coming back to find everything on fire, you know about different timelines. Scenario planning involves looking with imagination and fortitude at the future, and constructing narratives about what it might look like.
A relatively simple example could be if you are advocating for a specific and significant legislative change for your sector. If you are successful, here’s what the future might look like – for the sector, for your members, for the association. If you are not successful, here’s the alternative. There could be multiple versions of these futures – what if the government makes part of the change you are hoping for, but not all of it? What if the implications of an advocacy failure in this regard are more harsh than you anticipate? What if the whole thing drags on for years? What if the industry changes in a specific way in the meantime?
The COVID-19 pandemic has thrust us all into scenario planning mode – but climate change, artificial intelligence, and social justice movements were already exercising a lot of our imaginations long before this year. A thorough scenario planning exercise, when done by large organizations, can be incredibly complex and very extensive. For a smaller organization, it will be simpler, but still involves a willingness to imagine multiple futures.
The “planning” part of scenario planning leads us to the questions of: what does this matter? What would we do now to prepare for any of these eventualities? What are the areas where we may have to make a bet on one or the other of these futures? That is, are there things we may do or omit doing that we may regret later, depending on how things turn out? What are the signals from the environment that will tell us whether some of these scenarios are more or less likely than others?
When to use this:
- Some elements of scenario planning should be part of any strategic planning discussion. Fundamentally, strategy is always answering the question of what choices we should make to be successful, and that is always integrated with our view of the likely future(s).
- When a major external event or situation would have a significant impact on you
- When doing a simple sensitivity analysis isn’t rich or robust enough to help you understand your situation and develop your analysis of your options.
Note that while scenario planning looks to the future and pays a great deal of attention to the external, it also considers the implications for you. However, it’s not the same as option analysis, which is analyzing what would happen if YOU do X, Y, Z (or nothing). Option analysis is performed to make a decision about what to do about a specific decision in front of you, and is primarily focused on elements you control or can influence internally.
Walk and chew gum and do cartwheels and…
It is indeed a challenging and exhausting time to be in any kind of a leadership role. There is even less certainty than there ever was (or seemed to be), and far higher anxiety. Even clarity of purpose may feel elusive.
However, leaders are still called upon to make good decisions in the best interests of the organization. Tools like these – and of course there are a million others – will help you get your arms around the challenges, and determine how to move purposefully onward.
If you would like to discuss how we can help you use these tools and put your plans together – yes, even now – please get in touch.