Using Scenario Planning to Make Sense of an Uncertain Future
I've been working with a leader in a big studio. In one of our sessions, we discussed the vision for their studio, and they shared that they weren't sure how to formulate one. "There's just too much going on, and too much of it is out of our hands. It doesn't really make sense to look at the future when there's so much uncertainty right now."
In the next sentence, they admitted that the lack of conversations around the studio's future was already hurting their internal alignment, which was starting to cause friction. Their question to me was, "If we can't declare a definitive vision, what can we do?"
Ideally, you'd have a clear vision of the future and how to get there. But every once in a while, you may find yourself in turbulent waters, unable to look very far ahead. In this situation, it can help to figure out your most likely scenarios, and work from there.
Why scenarios?
When the future is uncertain, it can be tempting to forego discussing it altogether. After all, there's not much you can do about it, and any stake you put in the ground might have to be changed later.
But this view is too simple, especially if you're running a big operation. Things are still happening all around you, and you still have to align your leadership team and your studio around a common direction.
Luckily, even when things are out of your hands, we can still name those things, and talk about what might happen if those things come to pass. This way, you can still discuss possible outcomes, and you can plan your own actions in light of those possible outcomes. This puts you in a much more proactive position than waiting and seeing.
This is what scenario planning is: you make an effort to imagine the most likely scenarios, determine what would happen if they came to pass, and prepare accordingly--building alignment along the way.
So how do you go about scenario planning? Let's take our studio leader as a jump off point, imagine a similar studio in a situation that obscures their long-term vision, and use that to walk through the process. The core dilemma of this fictive studio should be recognizable for almost anyone who has held a leadership position in games: they have a flagship game that they have successfully monetized for years, but it's not clear for how much longer they can, or indeed want to support it. At the same time, a small team is working on a prototype for a new game, but funding for that game still needs to be secured. They hope that scenario planning can shed light on this dilemma and help them plan for the future.
Planning your future scenarios
There are many ways to work with scenarios, and in this case we'll look at deductive scenario planning. I recommend doing the following steps together your team--after all, the whole point is to use these conversations build alignment, not to present the perfect plan.
STEP 1 - Determine the scenario
First, we want to decide what we're building the scenarios for. In the case of our studio, we want to build scenarios for the near future, about 2 to 3 years out. We want to evaluate the success and health of the studio in a number of different scenarios, both so we know what to prepare for, and so that we can explore how those scenarios might extend into a longer term studio vision.
STEP 2 - Create an Impact/Uncertainty Matrix
To begin, we want to determine the core uncertainties that will form the basis of our scenarios. These are the things that will have a definite impact on our future, but that we currently can't say will swing one way or another. In the case of our studio, let's imagine that we come to the following list:
- Will we land funding for our new project?
- Will our core product stay sustainably profitable, or will we need to sunset it?
- How might we integrate AI into our workflows, and how big of a role do we want it to play?
- Do we keep our office footprint, or do we scale back and embrace a hybrid work model?
- Will our current leadership team and key creative talent remain stable, or do we need to plan for significant organizational change?
Aim for a list of 5 to 10 uncertainties. We really only care about the most important factors anyway, and building a huge list only makes it harder to find them.
When you have the list, discuss with the team and vertically rank the factors from high to low impact. Make sure no factors share the same ranking; you can cluster similar factors if they share a theme, but the relative impact needs to be crystal clear.
In our case, we might rank new funding the highest, since that has a huge impact on what the studio works on next. And we might not worry too much about something like AI, because we think it might be a while before we can integrate it in a way that truly adds value, if it happens at all.
Next, rank each factor horizontally based on how uncertain they are. Here, we might say that funding for the new project is very uncertain; as is the performance of the core product, since we don't know if we can push it hard enough to drive the revenue needed to keep afloat in the long run. On the other hand, we might not worry too much about leadership and talent stability, as the studio has a good reputation and is currently investing in its leadership and management capabilities; and we might already have a rough plan in place for how and when to scale down our office footprint, so we estimate a low uncertainty there too.
This step leads us to a completed impact-uncertainty matrix:
STEP 3: Creating 4 scenarios
From this matrix, we'll use the most impactful and least certain factors - the new project funding and the performance of the core product - to create our scenario framework. To do so, we take each factor in two divergent directions and place them on one of the axes to create 4 different possible scenarios:
Your first two choices might not lead to a perfect quadrant with 4 distinctive scenarios. If that's the case, simply move down the list of impactful and uncertain factors until it feels like you've created 4 quadrants that are meaningfully different, and provide a good starting point for discussion.
STEP 4: Building the scenarios
With our scenario scaffolding ready, we can now start looking at the individual scenarios. You'll want to agree on a handful of themes beforehand to make sure that you can make meaningful comparisons later. Some of the uncertainties we identified before might be useful in this step. In the case of our studio, these might be:
- Team size & office space - What would each scenario mean for the upsizing or downsizing of our team? And how does that impact the office space we need?
- Talent stability - If both games happen, how fast can we hire and onboard people to the new project if it gets funded, to ramp up production? How many people can we afford to lose in the worst case scenario? If only the new project happens, how do we support people in making the transition from maintaining an existing game to creating a new one entirely?
- AI integration - to what extent is AI support needed and/or wanted in each scenario? Can it delay certain bottlenecks in the case of great success; can it delay or prevent the inevitable if our revenue drops too far?
From here, you fill in the rest of the details of what your situation might look like if this scenario came to pass.
You can do these as a group, or you can create teams to work on each scenario and present them to each other. Whatever form you pick here, the point is to have real discussions about the tradeoffs inherent in these scenarios. Because while the underlying factors might be out of your hands, it is still possible to build alignment in how you want to act when these scenarios come to pass.
When the scenarios are done, give each of them a compelling, distinguishing title.
STEP 5 - Using the scenarios
With these scenarios in hand, you can now get to the practical discussion: how might we best prepare for these scenarios?
This is where the real value of these scenarios come into play, so make sure to spend enough time on this part. As a team, discuss what makes each scenario different, what they might share; discuss the risks and opportunities you see. From there, you can start to develop possible steps to prepare for these scenarios. You'll want to position yourself in such a way that you're able to capitalize on opportunities, while shielding yourself from risks that your studio would not survive.
Remembering that our studio designed these scenarios to ascertain studio health and success in various scenarios, we might land on the following action steps:
- Develop an alternative game proposal that we can shop around in case our current project isn't greenlit
- Develop a prospective roadmap for the core project that can capitalize on any success it might find in the market
- Start conversations with possible Co-Dev partners in case we need to downsize
- Fast track AI research so that we know what role it will play in the case that we need to to rapidly up- or downsize
By going through these steps, studios can prepare for the future--several different ones, in fact--even if many of the most important factors are out of their control.
And finally, by looking at the underlying drivers for the choices we'd make in each scenario, our studio can also start to imagine the longer term future, independent of these scenarios. Whatever we decide should be the same across the scenarios, must be something that we want to keep for the long term, regardless of what happens. These are likely ingredients for a long term vision that your team will rally around. Especially in times of uncertainty.
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See you in two weeks!
Martijn
