Three Lessons for Sustainable Scenario Planning

I have always been a fan of scenario planning. It really does provide great insights into R&D strategy and allows organization to develop robust R&D plans. The article Six Lessons for Sustainable Scenario Planning talks about how interest in scenario planning is increasing because of the turbulent economy:

One business discipline that generated a huge amount of interest during the recession was scenario planning. We wrote about it for Bloomberg Businessweek and advised many companies on it. The Corporate Strategy Board (CSB) ran a series of meetings around the globe on scenario planning where clients exchanged ideas and talked about how to implement the most successful practices we saw in our client networks. These discussions led to the six lessons below.

I will make it a bit simpler than the six lessons in the article – three points to keep in mind while setting up or maintaining a scenario-based planning process. I had trouble with Scenario Planning at one of the organizations. These three are my lessons learned from the experience.:

Formalize Scenario Planning: Have clear ownership / accountability for scenario planning. Ensure that the responsibility / authority are clearly defined and delineated from other ongoing efforts. Finally, define and expect clear deliverables and results from the scenario planning exercise.
Develop and use Actionable and Plausible Scenarios: It is not easy to devise scenarios that engender useful discussion and lead to robust plans. On the other hand, one of the biggest benefits of scenario planning is the discussion around assumptions of different scenarios. All scenarios are based on assumptions. Organizations should make these assumptions known (explicitly) and allow some discussion on them. However, the assumptions discussion should be managed effectively and stopped at some stage – otherwise the scenario-based planning discussion never actually happens. The CIA actually publishes very good global geopolitical scenarios that can be used as a foundation. However, scenarios that you would have to use will depend on the level at which you are doing strategic planning…
Integrate Scenarios into overall planning and risk management: Once results of scenario analysis are know, use them to drive strategic planning and integrate them into risk management process. Nothing drives implementation as much as results…

Managing Project Execution Risks (wonkish)

The Project Management journal has an article called Managing risk symptom: A method to identify major risks of serious problem projects in SI environment using cyclic causal model. The article lays out an interesting framework for managing project execution risks in large system integration (SI) environment. Some of the concepts are work remembering.

Serious problem projects (SPPs) often occur, particularly in a system integration environment, and it is difficult to prevent them, since the relationships among phenomena that occur throughout the project life cycle are extremely complicated. Our goal is to make it easier to identify major risks by distinguishing phenomena that are sources of future SPPs from phenomena observed in actual field projects. By choosing several events whose causal relation is known to be cyclic, we constructed a causal model and clarified that it can contribute to the easier recognition of SPPs empirically, by analyzing actual SPP cases.

The overall message is to anticipate major problem spirals by the analyzing events, understanding if the problems are root cause of a death spiral or a derivative of the death spiral and then taking effective action not only to mitigate the problem (event) but also the underlying death spiral.

The paper is a bit difficult to read – probably because I am not familiar with Japanese project management terminology and because of Japanese English…. However here are the major take aways:

Risk events have different consequences depending on the development phase. The article divides the project into three pages upper (proposal / award), middle (early development), lower (detailed development and launch).

The article lays out a model with three types of consequences of risks based on the phase (Devil Spiral and Death Spiral):

When an event occurs or it is anticipated, the article suggests to map them to the model based on the phase of the project and then determine if it is a Derivative event – a result of the spiral (as per the article a case that is derived from a death spiral) or an Accelerating event – a root cause that accelerates the spiral. Once done, the idea is to actively manage events, understand the nature of the spiral and take counter measure to prevent the spirals from accelerating.

Finally, here is an example of the completed analysis: