Richard Lannon

Businesses can be impacted by many circumstances. Often these circumstances are from external forces at play that need to be understood. Recently, while working with a client we discussed a
number of challenges that the company was experiencing. We talked for some time about external events that the company was aware of but could not control.

The uncontrollable business events included an aging population and workforce, the availability of self-disciplined and skilled resources, tax law adjustments, Canadian and international industry regulation changes, the happenings in the global economy in Europe and the USA, the Canadian banks’ financial treatment of midrange Canadian businesses, the natural resource market’s price volatility, access to private investments, Manitoba’s diverse economy, technological changes in the industry and the list went on and on.

To work with a midrange, successful Manitoba business and to discuss the external happenings that keep the senior team up at night was a gift. We were able to dialogue on a number of potential threats, determine if they were real and determine possible solutions. In essence, we engaged in Scenario Planning as an approach to strategic planning.

Scenario Planning is an approach that is used with other strategic planning models. It is particularly helpful to ensure that the core planning team truly engages in strategic thinking. When focused correctly, strategic issues and goals are identified. That is a great benefit to any business.

Most literature tells us that Scenario Planning is a five step process. The key is to ensure you take the time to openly identify perceived issues, determine if they are real and decide what to do about them.
Step one is to identify and select several external forces and think about and consider related changes which might influence and impact the business. This might include a change in regulations, demographic changes, education alterations, economic activity, etc. An environment scan of media – both traditional and new – for key headlines often suggests potential changes that might impact the business. This type of business intelligence can be automated in technology savvy workplaces.

Step two is to remember that for each change in a force there is an impact. In this case, discuss three different impact scenarios for the future business. Consider including 1) best case, 2) worst case and 3) reasonable case scenarios that might arise within the business from the resulting change. Reviewing the worst case scenario often provokes strong motivation to change the business.
Step three is to consider what the business might do. This leads to developing potential strategies for each of the three scenarios to respond to change.

Step four involves the core team indentifying common strategies that must be addressed to respond to possible external changes. This is the moment of truth as the team starts to see opportunities to deal with external forces that will impact the business.

Step five is to select the external changes most likely to affect the business. Traditionally this is done over a 3 to 5 year business planning horizon. However, depending what business you are in and the way technology works, planning horizons are collapsing to 18-36 months. You need to consider the planning horizon that makes sense to your business and identify reasonable strategies that can be leveraged to deal with rapid change.

If used correctly, scenario-based planning is extremely powerful. It allows for a guided dialogue on realistic events that can have a dramatic impact on a business and its people. All businesses need to keep a keen eye on the horizon and consider the events, positive or negative, that can impact their future. The key is working pre-emptively to ensure approaches are in place to deal with uncontrollable issues that may arise.

Have you ever wondered what CEOs really want? What does a CEO expect from his/her organization, its senior team and the individual players? Generally it can be summed up in two words: creative alignment.

CEOs want team members who are creatively aligned and able to:

1. Handle Stress Effectively
Stress can be good. Stress can be bad. It depends on the type of stress. Being able to recover from stress in a fluid and adaptive environment becomes a stand out point for the management team. Stress triggers can negatively impact the creative alignment ability of the team. Being demoralized in any of your failures is not a good omen for success. Learning adaptive behaviours is important.

2. Hone their Risk Radars
This is a tough one. There is always a balancing act when it comes to risk. From the CEO’s perspective, senior management shouldn’t play it safe, nor should they live on the edge. There has to be a balance. The senior team must be keen on introducing new approaches with a tinge of risk. If the senior team are safe players then they provide little if any advantage in an accelerated world.

3. Build Positive Stakeholder Relationships
The entire management team has to realize that they are the business ambassadors internally and externally. All eyes are on them all the time. No CEO can afford to have a management team member that is a nay-sayer, who engages in us-versus-them language or is conflict prone. An engaged and creatively aligned management team knows that adjustments must be made for the good of the organization.

4. Create New Business Models
The senior team needs to get along and be the advisors to the CEO. There is little time for isolationism and individual egos. If the management team is unable to create new business models to move the business to new heights, the CEO and the company will be immensely disappointed in its ineffective movement.

5. Establish Creative Productivity Gains
Every CEO wants their management team to be innovative. The team must bring productivity to the business by way of increased effectiveness and efficiency. You must be proactive and scan the business environment for improvement opportunities. The management team’s ability to foster people and business growth is paramount to its success.

6. Take Business Routines Seriously
A good routine is always good for an organization. Eighty percent of the company’s work can be pre-established while the other twenty percent is always reserved for emergencies, rush jobs and responses. Getting the established processes in place and ensuring that other teams adapt to the routines of the organization is part of what makes things better.

7. March to a Mission
Management teams must creatively align themselves with the needs of the organization. CEOs are constantly asking, “What are the three to five things on the strategic agenda of the organization?” and “What is the management team doing to make it happen?” The CEO has every right to expect the management team to be on mission. The ability to creatively align means to be purposeful.

8. Invest in the Success of Others
Action speaks louder than words. As a management team, the ability to invest in others is an important recipe for success. When it comes right down to it, the most valuable asset of the organization is its people. Today’s organizations cannot afford to lose or have its intellectual capital treated disrespectfully. It is management’s responsibility to ensure they make the right investments in people.

Good CEOs know that if the individual players on the team are creatively aligned they will row in the same direction, at the same speed, with the same consistency. They will also find solutions and adjust to circumstances as needed. From a talent management perspective, that spells success. But you knew this, didn’t you!

Copyright Richard Lannon 2012. Please pay it forward.I’d appreciate you share and request that you state your source. Thanks.