When tomorrow comes....

THE world economy has been through a series of volatile ups and downs. Such unpredictable trends can be tough on the business sector. Far from making profits and aiming for future successes, most companies would be happy gathering their resources to stay afloat.

On way to avoid getting caught in the vortex of downturns and losses is to be prepared for them. Scenario planning makes it easier for companies to steer clear of catastrophes. It helps them foresee problems and devise ways to invest in a safe future.

Dramatic turnarounds from near bankruptcy to healthy profits in some of the world's best companies is evidence enough of the power of scenario planning. It is the technique of envisioning how and what the situation of a particular company, organisation or economy will be in the next few years, taking into account various key issues. These issues centre on the social structure, the economic, political, and infrastructural changes that may take place in the perceived time frame. This technique is a vital practice that can set-off tremendous amount of developmental activity and help the company stay clear of the future downturns. Most intelligent and learning companies have a scenario planner or strategist among their ranks to tackle this task.

A scenario planner is an individual who is responsible for planning the future moves of the company. He lists the risks, economic limitations, liabilities or advantages of the move, and also researches the resources and processes required to undertake the change. In short, the scenario planner is the quintessential strategist who looks beyond his own and the management's traditional mindsets. He motivates the company to look beyond the obvious, anticipate and prepare for any nasty surprises in market fluctuations. It is an effective way to jolt the company out of their complacency and push them into hyper drive.

Scenario planning can be applied to any industry or company. General Motors, the manufacturing giant, for instance also took to scenario planning when its future in the automobile industry looked bleak when the business environment in the sixties took a nose dive coupled with the oil crises of 1974 & 79. The company began to use tools such as trend analysis, future studies and the Delphi process to apply uncertainty to its products and services. This helped General Motors develop concepts and planning options.

The company could see the results immediately. The alternative futures developed were of immense use in various decisive knowledge domains. General Motors undertook a new way of working. The company's design centre and R&D teams took up scenario planning together, although they had divergent needs.

The R&D team sought the opinion of various in-house and external technology experts. With data gathered from this experiment, the company was able to successfully chart future scenarios for Asia, Europe and America. The findings sparked a lively forum that hit upon alternative inventions which would be relevant in the future. After the risk analysis on future trends, the R&D team was successfully able to fund technologies that were applicable in the future.

Scenario planning is an old technique. It was practised during the Second World War. The corporate giant, Royal Dutch Shell pioneered the technique during the oil crises in 1973. Scenario planning is also an effective tool to analyse the effects of external factors like changes in the economy, political upheavals, and technological innovations, on the company.

Global Business Networks (GBN), California, specialises in such scenario planning. GBN believes that to arrive at a productive future scenario, scenario planners have to be able to convince the decision makers to believe in and adopt the changes envisioned for the company.

Consider the instance of Cognisant Networks. The company originally started out as a dotcom whose chief source of revenue was a comprehensive website on management. The timing was right, it was the dotcom boom time. The product was launched with much fanfare and enthusiasm. The company, with its team of exuberant marketers, was sure of notching-up an enviable list of subscribers. Just as it seemed about to take-off, the dotcom bust happened, affecting even the most resilient of dotcoms. With a worldwide recession in the offing, most businesses were rocky and Cognisant Networks was no different.

Selling the product to the targeted companies and individuals was difficult as the once financial heavyweights were under a severe cash crunch and had no cash to invest. The morale was low and the future seemed bleak. Yet, survive, the company had to. So, before truly hitting the rock bottom, the company's think tank got into gear and set about intensive scenario planning sessions. They studied the state of the global market and thought-out alternative modes of revenue building to stay afloat during the dark period. They couldn't just let go without a fight.

The rigorous and exhaustive sessions of contingency planning eventually paid off. Various revenue streams were identified and a sketchy idea for survival emerged. With all the chief decision makers in agreement, services that would be in demand in the future and those that could be offered by the company were adopted. Aggressive marketing tactics and identification of the right target audience began to yield results. The company has now touched break even and a profitable future seems on the anvil.

With foresight and ample contingency planning, there are better alternatives than just going bust or bankrupt! Scenario planning is an effective way to maximise the inherent talent and resources within an organisation. With the appropriate expertise, it can change the fortunes of a company.

SAMYUKTA KODA

samyukta.hyd@careercommunity.co.in