As managers digest the implications of the UK’s vote to leave the EU, and the likelihood that no big decisions are going to be made quickly, and certainly not until a new prime minister has got her feet under the table – they are naturally thinking, “what next?”.
Which gives corporate strategists a central role to play in the coming months. And one of the most useful for navigating foggy situations like this will be familiar to all strategy teams: scenario planning.
But before strategy teams leap into the fray, they should make sure they understand how some of the most likely outcomes of the UK’s negotiations to leave the EU will affect their company’s operations and growth prospects, and also how to help the senior executive team get the most from any scenario planning initiative.
Four Paths Brexit May Take
Use chart 1 to understand the most likely outcomes of the UK’s EU referendum, and to inform your scenario planning exercises.
Chart 1: Post Brexit negotiation scenarios for the UK Source: Marsh & McLennan Companies, “The UK Chooses Brexit”
Click chart to expand
Three Ways to Make the Most of Scenario Planning
As you start the scenario planning in earnest, don’t neglect the following three steps
Avoid common pitfalls: There are three habits that many strategy teams fall into when running scenario planning sessions. Chart 2 sums them up.
Chart 2: Key mistakes when modelling scenarios and how to overcome them Source: CEB analysis
Incorporate planning best practices: Brush up on your scenario planning skills with this post from the archives.
It gives six lessons for good scenario planning practices, including the importance of managing the assumptions underpinning the scenario planning and how it should link directly to the company’s strategic planning process.
Conduct sessions with an empathetic voice: No amount of scenario planning will, unfortunately, bring immediate clarity to the near- or long-term future. Strategists, therefore, should bring a calm, measured voice to their communications.
Start by “providing reassurance, connecting with your people and listening to them,” Peter Cheese, the chief executive of CIPD, the professional body for HR and people development, told CEB during a Brexit webinar. “That means sharing what we know, and sharing what we don’t know. A little humility doesn’t go amiss in that regard.”