Should Scenario Planning Be Part of Your Strategic Plan?
If you want your nonprofit to be one that is resilient and proactive, you may want to consider adding at least a half day retreat to concentrate on scenario planning. Creating plans—scenarios—for situations that could put your organization at risk, and understanding when those scenarios are necessary, helps ensure your organization’s future.
Not every organization needs to do scenario planning, nor do you always to include it as past of your strategic planning process, but there are times when it becomes critical.
When times are uncertain or you are in a time of transition. For example, your leadership is changing—the ED is leaving, your core foundation support has moved away from your mission to focus on something, your community suffers a catastrophe that requires so much more of what you do.
You are looking at major growth or shifts. Perhaps you are thinking of building a new facility, moving to a new community, merging or forming a new strategic partnership. Or perhaps you are looking a new revenue streams, be they difference sources for fundraising, starting or expanding services for which you get fees for service, or embarking on a capital campaign.
You might just want to use scenario planning as a way to more fully engage your board. Ask them to think about those things that are non-negotiable, and why that is. Consider where you can be flexible—and think about if this is a time to test that flexibility. Scenario planning can be useful to set new priorities and consider the ways you are currently managing risk.
Scenario planning need not be a months long process. It can easily fit into a half day retreat.
First identify 2–3 key uncertainties . These are your drivers of risk—things that could challenge your organizaiton. Create your scenarios around those triggers—one that is not too challenging, one that is moderate, and one where the challenges are high. What would be the financial impact for these?
Build a portfolio of actions that address the question: How would our mission our programs, our finances look in each.
Finally, understand when these actions would be triggered. Sometimes that is obvious—your ED tells you they are leaving. But what if your ED was hit by that proverbial bus? You introduce a new service and it seems obvious that fees for that service will help increase your revenue. But what if the costs of delivering the service turn out to be much higher than what you can charge? Or it turns out that virtually no one is interested in the service? What are the indicators that you must watch for—and would make your various scenarios kick in?
Scenario planning allows you to imagine a future and consider what you would do, what it would cost, and what resources you would need. It is almost like having a crystal ball.