Imagining the Future
By Ann Lucas, Nonprofit Strategies
“All models are wrong, but some are useful” is a famous quote attributed to the statistician George E. P. Box. While he was referring to statistical models of predictive behavior, it has morphed into a well-accepted adage in artificial intelligence (AI) models. Now, with our COVID-19 infected status-quo, nonprofits might find the idea of creating “wrong but useful” models or scenarios to be helpful for exploring what the future may bring.
We all engage in some level of scenario planning. The reality is that every decision we make is a choice based on possible outcomes and predictions about what the future holds. It’s how we calculate those predications that matter. Are they based on the past? What we know? Our gut or intuition? Our experience? Or, are we thinking more broadly?
Countless books and papers have been written on scenario planning. Most of them are geared toward big corporations who invest huge amounts of time and money in complex, continuous analysis and modeling. That level of activity isn’t practical for most nonprofit organizations, especially now! But there may be value in applying scenario planning principles to our work as we try to anticipate what the world might look like in six months, a year or three years.
The Global Business Network publication, “What If? The Art of Scenario Thinking for Nonprofits,” outlines three guiding tenets for successful scenario planning.
- Take the Long View. Much of our sector is driven by service demands which, by design, responds to near-term concern and urgent needs. Scenario planning requires looking past immediate pressures and into the future where new possibilities (good and bad) exist.
- Engage in Outside-In Thinking. We’re so busy responding to demands and running on minimal budgets that we view the world from the narrow perspective of our organization or area of work. Outside-in thinking encourages us to examine changes coming from the broad external environment that could greatly affect our work.
- Invite Multiple Perspectives. Many in the nonprofit sector support diversity. Some champion it. A few actually insist upon it. In these polarizing times, when we’re giving our all for the cause, we may not always seek perspectives from those we don’t (or think we won’t) agree with. But listening to diverse voices helps us engage in Outside-In Thinking and offers new ways of seeing challenges and opportunities on a much larger scale.
Incorporating those tenants, your own scenarios can be created through the following steps:
- Definition of scope: What is the time frame you’re looking at? Most scenarios that are developed to inform organizational strategy look 5-10 years into the future, but we’re in uncharted waters now, so adjust it to meet your needs. Determine how much time/energy/resources you want to invest, and who will be involved. This could be a great way to engage some board members, especially when it’s clear that some tough decisions lie ahead.
- Identify driving forces: These are broad areas where shifts could affect your organization. External forces are those outside of your organization that you have little control over, Internal forces are those within your organization. Some examples might include:
- Funding (broader trends)
- Service Partners
- Fundraising (internal trend
- Perception analysis: This phase identifies the existing mindset of your team around the driving forces and then challenges those assumptions by including diverse opinions from people with expertise outside of your area of service. Comparing internal assumptions against external perceptions helps create a holistic view on possible future paths. The perspectives can be gathered via one-on-one telephone/Video/Zoom interviews, or through online surveys.
- Identify your critical uncertainties: Select two or three key areas from your driving forces that appear to have the most impact on your organization. For example, an important uncertainty for some organizations might be future government funding.
- Develop a range of plausible scenarios: This is the core of the process where your organization’s key uncertainties are converted into distinct future scenarios. These can then be enhanced using other driving forces to create plausible future states as well as possible developments that could link the present to this future state. It’s important to distinguish between this type of scenario, which is based on logical ways that uncertainties could play out, verses “wild card scenarios,” which are unexpected events such as a global pandemic.
- Discuss the implications: Here you discuss the various implications and impacts of each scenario – what action you would take if that scenario came true? What kinds of actions can you take to ensure this new world will (or won’t) happen? What kind of competencies will you need to develop to address this possible new world?
- Monitoring: We know the only constant is change, so it’s important to define key indicators and monitor them. If drastic shifts occur, revise your scenarios to include the new information.
A common pitfall is overcomplicating the scenarios. Keeping them simple while ensuring that they are plausible but structurally different (not variations on a theme) will provide the insights you need. Ultimately the point is not to predict the future, but to gain a deeper understanding of the larger environment in order to inform your strategy and improve your decisions during today and tomorrow’s uncertain times.
With a deep passion for the nonprofit sector, Ann Lucas has spent more than 25 years helping nonprofits strengthen our community with guidance on fund development, organizational planning and development and board governance. She is a member of the Nonprofit Consultants Network and the Impact Foundry. For more information, visit her website at www.annlucas.com.
The Nonprofit Consultants Network (NCN) is a collaboration of consultants who serve nonprofit organizations in the Sacramento region by convening, engaging, and inspiring them in professional development and growth. The information and opinions shared in this article do not necessarily reflect the views of NCN or its other members. You can access a directory of local consultants who are ready to support organizations during the COVID-19 crisis here.