Response Readiness Part Six: Executing Scenario & Contingency Action Plans
06 Jan 2021
In this final part of our Response Readiness blog series, Oliver Wight Partner Stuart Harman, discusses the final two stages of our 10-step Scenario and Contingency Action Planning process – operationalising and executing contingency plans and feeding information back into the process.
In the first five articles in this series, we have explored these eight steps:
- Defining the entity and its current environment
- Identifying the driving forces that could shape the organisation's future
- Identifying the critical uncertainties
- Visualising the contrasting outcomes
- Selecting top critical uncertainties and describing the scenarios
- Identifying the positives and negatives, opportunities and challenges for each scenario
- Creating contingency plans
- Determining the trigger points for action
Our previous blog looked at the critical steps involved in creating contingency plans and determining the trigger points for action. When you reach this stage however, how will you ensure everyone who needs to take actions knows what they need to do? This is the ninth step - operationalising and executing your plans.
Three essential elements of preparing your organisation to implement its contingency plan are:
- A practice run of the plan, so when the time comes to execute it everyone knows what they are expected to do for it to be effective. This is like doing a fire drill and practicing evacuation of an office. A business that conducts fire drills every two months will typically evacuate a building quicker and more effectively than a business that conducts a fire drill every two years.
a) Another interesting take on the value of practice comes from renowned British actor Sir Michael Caine who, in his 2018 autobiography Blowing the Bloody Doors Off and Other Lessons in Life, shares his view that "the rehearsal is the work", explaining that thorough preparation before the performance, or any big challenge, will lead to you being more in control.
- Ensuring everyone knows the role they have to play in executing the contingency plan. This is vital, to take account of individuals changing roles, or leaving the organisation. How do new staff know what their role is in executing Plan B? Quite simply, this needs to be documented and communicated.
- Continually scanning the future for the triggers to action the contingency plan. Where an organisation has an Integrated Business Planning (IBP) and/or Integrated Tactical Planning (ITP) process in place, the respective monthly and weekly cadences, and medium and short-term planning horizons can be used to check for triggers. In addition, IBP and ITP can enhance the Scenario and Contingency Action Planning process by:
- Utilising IBP and ITP to formalise communication.
- Providing clarity around roles through adding Scenario and Contingency Action planning activities to existing IBP/ITP RACIs.
- Using the decision-making rights and escalation processes associated with effective IBP and ITP to ensure that decisions to action contingency plans are made by the right people at the right time.
What if your organisation doesn't operate an IBP or ITP process? Here are some things to think about:
- You need to continually scan the future horizon for triggers. These triggers need to be far enough in the future to give you sufficient time to action your contingency plan(s). Don’t confuse a monthly process that looks out far enough into the future, with a daily-weekly process that looks out tactically.
- Get clear on the different levels of management involved – executives shouldn’t be a part of the daily-weekly, their job is to “stand above it all and look out…”
- Keep the scenarios and contingency action plans formal.
The tenth and final step in our 10-step process is feedback into the process as new information comes in. Effective Scenario and Contingency Action Planning is not a "set and forget" exercise. As new information emerges, it should be fed back into the organisation so that scenarios and contingency plans can be adjusted where necessary. This continuous "scanning" activity is well suited to the IBP and ITP processes mentioned earlier, but for many organisations, it also provides an opportunity for them to improve their IBP process.
How formal is the process for insights capture, collation, reporting, and acting on in your IBP cycle? It is important that you define the following:
- Insights capture - what and by whom?
- Insights collation - what and by whom?
- Reporting - what and by whom?
- Action - integration with the ITP / IBP cycle
In their book, Great By Choice, management thinker and author Jim Collins, and his co-author Morten Hansen, identify a core “Productive Paranoia” behaviour, employed by what they call “10x companies” (those that outperform their industry peers by a factor of 10). The authors describe how leaders in these companies constantly ask "What If?" and develop plans to exploit or defend against possible outcomes. Their research indicated that 10x companies were no more or less lucky than their peers but were able to use their preparedness to respond more quickly and take action to mitigate or exploit events.
So, how well is your organisation set to respond to the multiple potential futures that lie in store for it?
If you would like to discuss any elements of Scenario & Contingency Action Planning or how you can enhance your existing IBP or ITP processes to ensure your organisation is response ready, please get in touch.