Using scenario planning to move forward during seasons of seismic change

Even in the best of times, making change and advancing equity and opportunity at a systemic level is challenging and complicated work. 

With a pandemic raging, civil unrest rocking major cities, and a presidential election looming, it would be hard to call these the best of times. 

The great social change and uncertainty we’re experiencing has stopped many philanthropists in their tracks. With their six-month or 12-month plans now impossible to execute on, their instinctive response has been to put everything on hold.

Of course, there have been some foundations in education and other fields who have leapt into action as this crisis has unfolded. This responsiveness has meant the difference between staying afloat and sinking for many individuals and communities throughout the country, and we applaud those efforts.  

But for the field of philanthropy as a whole, this tendency to stand back and reassess is compounded by the loss that many funders have suffered in their underlying assets—they feel that being called upon to do more with less necessitates a strategic reassessment. 

So what happens if every funder is suddenly thrust into a strategic plan refresh at the same time? We run that risk currently, because every funder is facing the loss of their official future at the same time—whatever plans they had, whatever giving strategy they had, chances are they are feeling the need to reexamine it in light of the current crises and its potentially long lingering aftermath.

But the reality is, we’re always living in uncertain times. We just delude ourselves into thinking the future will look much like the present, and we build our strategic plans based off of that one huge assumption.

And when we choose to do nothing in the face of a crisis, or to wait it out, we’re making the same mistake we did before the crisis hit. We’re choosing to base our decisions on one assumption about the future: that this disruption is temporary and life will return to its previous rhythm. 

Forward-thinking philanthropists must reject this pattern. 

We are facing an ever evolving crisis, and if funders were to follow their usual approach of taking many months to revisit their strategic plan, their grantees would suffer. Even the most promising of initiatives could wither on the vine. And they will certainly miss windows of opportunity that arise in the midst of social upheaval. 

Scenario planning offers a powerful antidote to the tendency to panic or freeze when our “official future” is upturned.

At its core, scenario planning pushes leaders to look beyond their deeply embedded ideals of an “official future” where things magically work out according to whatever plans and hopes they envisioned for themselves and their institutions. It originated during the Cold War era as a way for US military leaders to guard against the implicit bias in their vision of an “official future” that might impede effective military strategy.

For funders, scenario planning is an effective way to adapt quickly to a changing environment, resulting in less disruption of core services and preparing to seize new opportunities to advance their mission that will inevitably arise from the new reality.

So what does scenario planning look like for foundations? 

A scenario planning exercise involves three steps.

STEP ONE: Identify two key external dynamics that shape the world you operate in and will have major ramifications for your delivery of services.

To demonstrate how scenario planning helps organizations uncover cognitive biases and prepare for multiple futures, let’s look at an example that every foundation should be thinking about right now: the two possible outcomes of the next presidential election, and the possibility that mandatory social distancing to combat the pandemic will need to continue into 2021. 

Plot those dynamics on two perpendicular axes so that you end up with four quadrants, each representing one possible future outcome. 

You’ll end up with a table like this: 

Biden Wins,

 Social Distancing Ends

Biden Wins, 

Social Distancing Continues

Trump Wins, 

Social Distancing Ends

Trump Wins, 

Social Distancing Continues

STEP TWO: Flesh out the impact each of those outcomes could have on your operations.

To generate insights from this step, you have to richly fill out these scenarios. It’s an exercise in creativity. Ask yourself, who wins in this quadrant? Who are the key personalities? What do newspaper headlines read? What industries transform? How do each of these factors affect your ability to deliver services, to raise money, to hire talent, to build coalitions, or to engage stakeholders?

In this part of the exercise, thought diversity is essential. The more diversity of thought in the process, the richer the scenarios and the more we get underneath things we might not realize are biases we have. And that doesn’t just mean racial or ethnic diversity. It’s also important to bring in voices from outside of your organization who can identify organizational blindspots. 

STEP THREE: Develop strategies that will work across all four possible scenarios.

In this step, start by listing out all of the strategies available to you, whether that’s five, 10, or more than 20.

Next, assign each strategy to the quadrant or quadrants where it would be viable. Then, identify the strategies that are most universal—the ones that would work in any of the four scenarios, and start acting on those. 

Benefits of scenario planning for foundations 

Foundations can reap three main benefits from engaging in scenario planning. 

First, scenario planning will enable foundations to stop stalling and waiting for the future to play out. It will help them deploy a strategy immediately which will advance their mission no matter what the future holds. 

Second, scenario planning will help foundations avoid the good news/bad news trap which categorizes one set of outcomes as only bad news, and the other set of outcomes as only good news. In reality, there are opportunities and challenges in every outcome. 

In the example above, it would be easy for a liberal-leaning foundation to assume that a Biden presidency where social distancing ends would be the ideal scenario, and take a Trump presidency with continued social distancing as the worst possible outcome.

But what if that foundation’s primary mission is to stop climate change? Even with a Democratic sweep of Congress and a Democratic president, climate change will likely take a backseat to more pressing issues such as the economy, public health, racial justice, and education. Additionally, with a Democratic victory, liberal-leaning foundations could see a huge source of their funding dry up as fear-motivated donations disappear. 

Similarly, foundations will find hidden opportunities in the possibility of a second Trump term, and in the possibility that social distancing will be necessary well into 2021. But they will not be prepared to seize those opportunities unless they take the time to imagine what the world will look like in those possible futures. 

Finally, scenario planning forces foundations to grapple with the things they think are inconceivable. In 2016, for many organizations, a Trump victory was completely inconceivable, even though for months ahead of time it was one of two possible options. In 2020, some organizations are already starting to make the same mistake, thinking that a second Trump victory is still out of the realm of possibility. 

The pandemic itself was also a known possibility as soon as news of the virus’s impact in China made its way to American news headlines. But almost every leader in the country, from the U.S. president to the superintendent of the smallest school, refused to plan for the possibility of the pandemic shutting down the economy because it was a future too devastating to imagine. 

If an organization had engaged in scenario planning when news of the virus first arrived, it would have been able to respond much more nimbly to the challenges that factors such as social distancing, widespread unemployment, and housing and food insecurity present. 

Scenario planning is the antidote to philanthropy’s tendency to disappear in the moment of greatest need

Scenario planning is not a tool for predicting the future. In fact, it is the opposite. It allows us to embrace the notion that we cannot predict the future, and it positions us to be prepared for a variety of different futures. Scenario planning encourages participants to identify the most high impact and uncertain factors in their strategic settings—the things they do not control. By working with a group of diverse and representative stakeholders to build imaginative but realistic scenarios around these strategic drivers, decision-makers are able to adopt a looser, more resilient posture overall and make the most out of the things that they actually do control.