As sales leaders rise in the hierarchy, sales skills tend to fade in favor of other competencies such as innovation and strategy. Scenario planning is one of the strategic tools to master.

In our article on Blue Ocean Strategy, we emphasized that concepts like the value curve and the four actions framework aren’t reserved for strategists but can be leveraged by sales leaders. The goal is no longer to create new markets but rather to modestly redefine your differentiators and shape your sales strategies accordingly.

Scenario planning is another tool that deserves our attention. Traditionally used in long-term planning, it is equally relevant for sales leaders seeking to anticipate changes in a constantly evolving environment.

Scenario planning : what for?

VUCA: everyone knows this acronym. It’s usually when you start prowling choppy waters that you get the gist of it.

VUCA characterizes an environment where volatility, uncertainty, complexity, and ambiguity reign. In short, nothing is certain, the future is unpredictable, a multitude of interconnected factors weigh on our ability to judge and decide, and it is crucial to learn how to deal with gray areas. Twelve-month forecasts become useless. Business plans serve more to reassure control freaks than to truly plan for a future that is inherently uncertain.

Country or regional managers inevitably have a strategic dimension in their job description. If you are familiar with business planning and simple tools such as SWOT and taking into account external structuring variables to formulate your assumptions, then scenario planning can be seen as an enhanced version of business planning. It precedes it and has a horizon of at least three years.

Scenario planning allows to anticipate and explore multiple possible futures. The goal is to be prepared for both the worst and the best. The thought process that fuels and results from this approach enables the institutionalization of action, viewing the company as a living organism interacting with its environment, which is no longer perceived as unpredictable but as plausible, and therefore can be anticipated.

The ultimate goal of the approach is to embed the ability to change into the company’s DNA to gain a competitive advantage. It takes time and reflection, but the return on investment is spectacular when unexpected events such as a pandemic, an economic crisis, a geopolitical conflict, or more modestly, the arrival of a new competitor, occur. Nothing is surprising; nothing has to be thought out from scratch.

Scenario planning : implementation.

For sales leaders, achieving goals, forecasting sales, or developing a new market depends on many internal and external factors such as positioning, investment capacity, macroeconomic trends, or the competitive environment.

Scenario planning is not divination. It is a blend of foresight and decision-making, exploring the realm of possibilities and continually validating the foundational pillars of a company. Its purpose is to make the sales organization more insightful in observing its environment and the externalities that condition its success. In a nutshell, more proactive in defining and adjusting its strategy. Its implementation, especially if you’re not familiar with it, should remain simple. It includes the following steps:

• Defining objectives: down market, product launch, expansion, diversification, or changes in customer behavior. The project’s scope and involved stakeholders depend on objective definitions. The key? Be rough-less on the reasons and values of the initiative, its scope, the expected impact, and the roles of the stakeholders involved.

• Identifying key variables: distinguish between what is predetermined and what is subject to change, what is controlled by the company (transactional environment), and what belongs to its external environment (contextual environment). Once critical factors are identified, the next step is to establish connections and interdependencies among these components.

• Developing scenarios: limit yourself to three plausible scenarios, ranging from best to worst. One scenario might envision rapid market growth and increased customer spending; another might foresee market contraction and new entrants. Scenario development is based on key variables, ranked by their nature, probability, impact, or time-line.

• Implications and execution: scenario planning reveals certainties but also raises questions and doubts about the organization’s key competencies, existing processes, and sometimes even its purpose. The aim is to anticipate and act to bridge the gap between the current situation and possible or desired futures. This means defining strategic priorities, associated benefits and costs, as well as various initiatives and success metrics. Complicated? Not at all if you master and aggregate your OKRs or V2MOM!

Scenario planning : the tools.

Scenario planning lays the foundation for strategic planning. There are multiple tools, and we invite you to request our Workbook on Strategic Thinking and Decision-Making for more details.

Scenario planning involves both logic and intuition: identifying trends and links between seemingly unrelated events, distinguishing predetermined elements from uncertain variables, or assessing the risk of structural uncertainties. That said, if you’re new to this exercise, focus on the following tools:

• Individual interviews and team feedback: it’s amazing how much data on the present and future can be gathered by consulting the people within any organization. Sales teams are no exception, and leaders are often surprised by the diversity of thought on strategic directions and future perceptions. Whatever the techniques and questions used, the interviewer should aim to uncover three components: concerns, uncertainties, and priorities.

• SWOT: much has been said about this matrix, and we’ve even used it as a personal and career development tool. However, two key points when practicing it with our clients: always ensure each component is action-oriented and prioritize! For instance, distinguish between weaknesses that are mere symptoms and structural weaknesses where the organization lacks distinctive competencies that could jeopardize its growth and survival.

• Porter’s Five Forces: this is a detailed analysis of the market and industry structure in which the sales organization operates. This structure is nothing more than the structure of the competitive forces at play. They include the generic forces of existing competitors, the relative power and influence of both suppliers and customers, the potential arrival of new entrants, or a substitute offering.

• STEEP: this is entirely about analyzing external factors over which the sales organization has no control—except through lobbying—but must anticipate and exploit trends in Societal, Technological, Economic, Ecological, and Political factors.

These four tools are sufficient to confidently begin scenario planning and formalize an understanding of the current organization, its emerging needs, its strategic situation, and the probable futures that may impact it.

Conclusion :

In an unpredictable commercial environment, scenario planning is a powerful tool for leaders whose ambition is to anticipate and develop robust strategies to thrive or survive in multiple possible futures.

It is not about predicting the future but anticipating it by preparing the organization’s response to external contingencies and guiding it toward the most favorable future, even restructuring it to optimize adaptability.

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