Advisers’ Choice Series: What If …
Using scenario planning often seems to involve a lot of effort for which the payoff is inaccurate predictions or, worse still, indulgent fantasies. But even when your predictions don't materialize, they can help improve your organization's strategic intelligence.
Scenarios are becoming an increasingly popular and useful tool for anyone developing a fundraising strategy in what seems destined to remain an uncertain and fast-changing world. In our experience, a well-organized scenario session will enable you, as a fundraiser, to avoid the dreaded analysis paralysis. It also can help avoid the desperate rush for the light at the end of the tunnel called social media. As proof, we can point to the fact that scenario planning is now regularly used by many of the big international nonprofit organizations, including Amnesty International, Oxfam, Greenpeace and the Red Cross, to improve not just their fundraising but also their strategic thinking in general.
But what is it?
Let's first be clear about what scenarios are, since the term often is misunderstood and even misused. Scenarios are not trends predictions with risk and sensitivity — though those are the basis of most current fundraising strategies. In scenario planning, you begin by creating a limited number of possible outcomes or situations and then work out what you would do if each situation (scenario) developed. It's the difference between strategic hindsight and strategic foresight.
The accompanying diagram illustrates this essential difference.
This fundamental difference is important since, in one case, you start from what you know and work out toward the future. And in the second, you begin from what might be possible and work back to what you know.
The table at left expands on this distinction.
Scenarios in practice
One practical example from The Management Centre (=mc)'s own work might help show the value of scenarios. Just weeks before the London terrorist bombings of July 7, 2005, =mc was hired by the mayor of London to conduct a scenario exercise into how the city would raise and distribute money in the event of a disaster. Working with the Red Cross and others, we looked first at a number of possible "what if" scenarios:
Related story: Scenarios Planning — An Ancient Art