Updated: Aug 23, 2021
Embracing uncertainty is all about planning many plausible future scenarios and recovery paths. That’s how we can build out the kind of agility needed to navigate the great unknown we’re facing now. Getting this right means balancing methodical scenario planning with robust collective intelligence capabilities — artificial intelligence (AI) and humans working together.
Clarity is critical for any organization looking to move forward with confidence. It’s also the one thing no one has quite enough of right now. From day to day, reopening plans move ahead, then fall back. Vaccines drive optimism; rollouts generate questions.
While uncertainty has dropped about 60% from peak levels one year ago, it remains at historic highs. No one can predict precisely how and when the economy will fully recover. That's exactly why organizational agility has become fundamental to making decisions with certainty, even in a market that’s anything but certain.
How can you dive into scenario planning sooner to cultivate agility faster? Be methodical and bolster everything you do with factual data and advanced analytics:
Build out informed scenarios using tested methodology.
Clear, transparent methodology and intentional design drive scenario plans that can give you a competitive edge. Understanding more about the market and your organization means working and thinking with clearly defined internal and external driving forces and business levers. Doing so can offer up better insight about what might be around the corner, as well as risks and other indicators that can effectively trigger your action plans.
We see that at EY every day. Whether planning out plausible economic recovery scenarios for a big city or mapping out a significant retailer’s potential responses to new lockdowns, our plans require a deep understanding of the factors capable of causing dramatic shifts. Those dynamics will be different for the city than for the retailer and for any other organization. Recognizing which ones matter most to you is at the heart of good scenario planning.
So go ahead. Define the strategic problem or focal question that’s most pertinent to you right here, right now. List out the driving forces and clarify the most significant uncertainties to your organization. Model the scenarios — including the attributes of each plausible future — and then start analyzing potential paths and response plans, including initiatives and actions for each of the priority scenarios.
Doing this work now buoys organizational preparedness, flexibility and agility by allowing decision-makers to continuously adapt business operating models and value chains for the evolving environment. It also enables you to spot and mitigate risk while aligning your internal structure to help you perform on a sustainable basis. Good scenario planning empowers organizations to plan proactively and revise constantly. Done methodically, it doesn’t just support agility; it defines it.
Amplify collective intelligence capabilities by making the most of AI
Collective intelligence (read: data) gives you context. It’s the meat on the bone, the deep dive into the internal and external factors that will shape the possible scenarios your organization is facing. The intelligence you gather defines the relevant indicators that you most need to monitor as you anticipate different plausible futures. This sends a positive ripple effect right across your business, capable of improving everything from how customers experience your brand to your ability to team with allied industry players to build a new way forward. Your plans are nothing without intel.
Collective intelligence should be vast and — this is essential — timely. That means not only generating reams of data but accessing it quickly to develop accurate predictions and react quickly. Bringing AI into that process can supercharge your efforts and unearth extended value even as the environment remains uncertain and business complexity hits new highs.
AI allows you to create new and more insightful scenario-related models to deal with external forces and support strategic decisions. It becomes your source of truth, processing massive amounts of data quickly and calibrating scenarios in near-real time. Humans can then shift away from feeding the data to focus on taking strategic action as AI offers continuous insight to guide them. That packs a powerful punch in terms of extended value and creates a compelling reason to assess how you can bring AI into your scenario planning process now.
The most important thing you can be today is agile. The right mix of scenario planning and collective intelligence allows you to prioritize opportunities, create revival plans and make up-to-the-minute decisions about everything from supply chain to workforce mobilization. Adding AI into the process makes it even more effective.
If you could create a little more agility, why would you hold yourself back? Start that process now, and watch this space for more to come on the revival planning that comes next and business reinvention that will serve you well into the beyond.
Authored by Lance Mortlock (Senior EY Strategy Partner & Haskayne School of Business Visiting Professor).