Restarting Growth through Scenario Planning

By: Cliff Saunders, Ph.D.

A recent study by the Corporate Strategy Board showed that 97% of companies are unable to restart growth within their existing business model. That's a big number! It is clear that within the vast majority of companies management needs tools to help them think differently about their own growth challenges and then apply the results to make their new thinking a reality.

Scenario Planning is a highly effective tool to help management think differently about their situation. It's like having your own crystal ball into the future.

Growth restarts generally fall into one of four categories.

The first is to discover growth within your core business, for example by re-segmenting the existing business and finding underserved segments and going after them.

A second area of growth is in adjacent segments. An adjacent segment is a market that the company does not currently serve yet has the competency to serve if they take a step away from the core business.

The third area for growth is in the arena of newly emerging markets, these are markets that don't yet exist to any great extent but through the process of scenario planning allows a team to discover them 'under the radar' and profit from them before others find them.

The fourth area where growth can be found is in the realm of disruptive business models. We have all noticed that the world is turbulently speeding up more and more every day. Events like 9-11, Enron, Mad Cow Disease give us the impression that the world has gone mad, yet by using scenario planning we can often discover ways to use this turbulence to disrupt incumbents and capture market share. Better to be the disruptor than be disrupted!

How does scenario planning allow you to see these new opportunities? It is an old adage that 'we cannot imagine what we cannot imagine'. Our imagination can become a self limiting trap of perception and belief. Scenario planning allows a group of senior managers to think differently about the future. It allows management to begin to consider how the important yet unpredictable trends and forces that affect their industry might combine in ways that will open up new possibilities. For example a client we worked with used scenario planning to develop a road map of newly emerging markets and used that map to pick adjacent segments that they had the competencies to explore and that led to growth.

By using Scenario Planning another client was able to look within their own operations and found a new way to segment their existing market and offered new value to a large previously overlooked segment.

There is no magic to scenario planning, all that is needed is a leadership team that is willing to get curious about growth, to get curious about how the important and unpredictable forces of their marketplace might combine in the future and open up possibilities that can be capitalized on.

In a way the results of Scenario Planning are like discovering a door in what you previously thought was a wall.