Scenario Planning Improves Your Future
by Sarah Di Troia
Every spring, the same movie plays in my household: While I am buoyed by the season, feeling renewed with each blossom and warm breeze, other members of my family slowly lose their minds.
It turns out reverse seasonal affective disorder (SAD) is real; transitioning from the cocoon of winter into the longer hours and increased social expectations of the warmer weather can trigger anxiety and depression (along with allergies).
This year, folks who typically face spring SAD have a lot of company – nonprofit leaders and social entrepreneurs are experiencing increased anxiety and uncertainty in relation to revenue and business models.
The pandemic introduced a need for rapid and radical change, requiring a complete overhaul of most organizations’ program models. Holding our staff (and ourselves) together through so much uncertainty and disruption led to exhaustion in 2022. Add in 2023’s widespread economic turmoil – inflation, a jittery stock market, and a possible coming recession – and it’s easy to see why leaders feel unsettled.
There is no magic solution to all this. But there are steps we can take now that will improve our ability to thrive in increasingly uncertain times.
Time is Our Most Valuable Asset
We don’t know what tomorrow’s weather will be – sunny, cloudy, rainy. But we do know there will be weather.
Scenario planning buys time by allowing leaders, staff, board, and other stakeholders to brainstorm and prioritize key uncertainties that may affect their environment. They can then contemplate changes and adjustments that may be needed as a result.
These are not just financial scenarios, though those remain critical in times of uncertainty. It also involves thinking about how the context in which your beneficiaries’ lives are shifting and the demands this may place on those in and around your organization.
Identifying a prioritized list of uncertainties that will shape your environment allows you to do two things:
#1. Track key data outside of your organization to better understand how things are evolving
Ideally, these are leading indicators that you can look at quarterly (at least). Paying attention to these will give you the advantage of time, so that you may plan for changes within your context.
For example, if you operate a food bank, a leading indicator for demand for your services might be the unemployment rate in your community. In gauging your nonprofit’s financial wherewithal, a leading indicator might be your philanthropic pipeline or the S&P 500 and its likely impact on charitable giving.
By tracking these key indicators, your management team can reflect on how your environment may change. It can then make proactive decisions and hard choices about how you will react should any of these as yet theoretical futures reveal themselves.
#2. Engage in a creative process regarding what should change regardless of the weather
When you take time to describe what a rainy, cloudy, or sunny future may look like across your prioritized uncertainties, you will also identify activities and practices that should change no matter what may happen.
For example, in doing this type of exercise with an after-school provider, they realized that in any future scenario, when youth returned to school after district COVID quarantine, their mental health would be significantly altered.
While this had not been a prior concern of their program model, they knew that it needed to be addressed. Scenario planning gave them time to invest, discover, and innovate in advance of kids coming back to school, by which time they would be in desperate need.
That same provider, which relies on a large volunteer core, realized it would have to hibernate its annual volunteer retreat post-Covid, despite this being seen by volunteers as one of the key benefits of staying involved. So, they had to think about other benefits they could create to keep volunteers engaged in the work.
Start Now
It’s been a very bumpy few years and there is little reason to believe that things will settle down any time soon. Uncertainty will continue to be our watchword for the foreseeable future.
In this context, scenario planning is tremendously valuable. By contemplating and prioritizing possible events and circumstances, we afford ourselves more time to think, plan, invest, and game out how we will respond when the future inevitably arrives.