When we do our planning, we do our best to take a realistic look at what might happen in the future. Whether it’s for budgeting or program planning, we often use our best knowledge of the past and present to foresee the likely future.
While we sometimes look at probabilities and risks, we usually only plan for one scenario – the one we feel represents the most accurate picture of how things will unfold. The problem is that we’re only preparing for one scenario, likely though it may be.
Moreover, often times that one scenario is skewed by various factors. Because while we do our best to set expectations for ourselves, we’re also working to set expectations for others: our managers, senior leadership, the Board, funders, key donors, etc. We want the scenario to be realistic but we also want it to be exciting, inspiring, and worthy of support. So although we may be conscious of the risks and how things can go wrong, we don’t necessarily account for those accurately in our planning.
In fact, in most proposals I’ve reviewed the risks section is by far the weakest, where organizations either say there are no risks or they are completely prepared for all risks – and neither is usually true. But who is going to write a proposal that says there are big risks and we might not be prepared for them? That doesn’t exactly build the kind of confidence we want funders to have in our organizations and programs.
The thing is, we can’t predict the future. And though there may be a likely scenario, there are also other scenarios we may encounter. Some may be in our favor, and others may work against us, but both types pose challenges and opportunities for our organizations. If we want to survive whatever comes our way, we should be prepared for more than one future. As the saying goes, “adapt or die.”
My recommendation to clients is that they plan for three scenarios: (1) a negative scenario, (2) a business-as-usual scenario, and (3) an ideal scenario. In the first, there are assumptions about losses and failures – not getting certain funding, an indefatigable obstacle to program work, opposition from an unforeseen source, etc. The second scenario is the one we usually plan for – a continuation of the current conditions, a future that is simply an extension of previous experience. And the third is what happens if things go our way – we get that big grant we’re vying for, our program exceeds expectations, unlikely windfalls happen, etc. By looking at these three, you can make contingency plans and be prepared to adapt to the good, the bad, and the expected. If you don’t get the funding you expected, how will it affect your operations, your programs, and your staffing? If that unlikely policy gets signed into law, opening up opportunities for advancing your mission, how will you allocate or acquire resources to take advantage of them? Adaptive management is how organizations not only stay alive but thrive, and scenario planning is a solid tool for adaptive management.
You don’t have to share your plans with everyone. If you think funders don’t want to see your worst-case scenario, you’re under no obligation to show them. At the same time, some funders actually appreciate that you’ve thought things through and that you’re prepared for risks. It demonstrates a sophistication and strength of management that many organizations don’t have. It’s something that you could set you apart and above others. But again, most important is that your organization can weather storms and grow in sunlight.
So be prepared. A little extra time planning can make your organization more adaptive and more resilient. That’s a risk worth taking.
What kind of scenario planning does your organization do? How do you account for risks and their mitigation? Have you ever been unprepared for a given situation?