Scenario Analysis elective gave me tools to test our strategy
For the elective week of my Executive MBA, I was looking for a course that could give me new tools. When I saw the Scenario Analysis elective, it especially appealed to me because I was convinced that I could learn a new approach to apply to my work afterwards.
The elective was held by Dr Peter McManners, the same lecturer who held the strategy workshop for us. So, I knew I wouldn’t be disappointed. The lecturer is very analytical, and since I’m an engineer from my education, I like his style of presenting things in a fact-based manner.
I work at Grundium, a company that manufactures medical devices like digital microscope scanners for healthcare. My role is multifold – I look after quality management and engineering, and I’m on the management team. At the moment, we are planning our strategy for the coming years. So, the tools that I learned from the Scenario Analysis elective are very useful in testing our company’s strategies.
One of my big learnings from the course is that the scenario analysis time span is usually twice as long as the strategy time span. If you’re planning a five-year strategy, your scenario analysis should be considered for ten years. This rule of thumb is one I took with me.
Now that we are planning our strategy for Grundium for the next three to five years, I am using my newly learned skills and tools to think of scenarios that could happen in the world over the next six to ten years and how they could affect our business.
During the course, I also learned that scenarios and strategies should be planned by different teams to ensure objectivity. You don’t want a person planning the strategy to be involved in planning the scenario analysis because then the scenarios will just basically fit the strategy. This was the most relevant tip I learned from the course.
After we develop the strategy and scenarios at Grundium, we will be testing our strategic options against each of the scenarios. If a certain scenario happens, then how does the strategic option play out?
My assignment during the course focused on digital diagnostics and how the industry will evolve in the next five to ten years. Like all Henley’s assignments, you look at a practical problem or challenge and then apply the suitable framework and tools you are taught in the module.
The steps to create the scenario analysis follow a specific framework. First, you collect the drivers in the industry and then decide which ones are most important. After that, you will consider the extremes in terms of where these drivers could end up in ten years. Based on those factors, you can then generate a couple of scenarios. If these factors play out, then how does the world look for your company in five years?
Although each of us has some scientific basis for speculation, a lot of the data will come from our own reflections on how the world may be in ten years using a few factors or variables that we know or have control over today.
The next step is to write a short story or a description of how the world will be for Grundium if this and that happen. Of course, those scenarios describe only a few potential futures with any probability. For some, the likelihood is very low.
I feel scenario analysis is one additional tool to back up our strategy selections. If we can use this efficiently, we may find one or two things we haven’t thought of before.
Going to the UK for this elective course was special. It was fun to see everybody. Due to COVID-19, we weren’t able to have our starter workshop at Henley in the UK. Instead, we first met at the other international workshops in Denmark, United States, and South Africa. So, this was the first time we even visited the Henley campus. I’ve also lived in the UK for a while, and it’s always nice to go back.
I would definitely recommend this elective because it really gave me valuable tools that I can use. These tools are not going to change over time, and all the information will stay valid for years to come.
Pasi Syvänen is Head of Engineering at Grundium Ltd, a Finnish medical device manufacturer providing high-precision imaging instruments for healthcare. Pasi has 20+ years of experience working with technology development. Prior to joining Grundium 6 years ago, he worked in several engineering and management roles at Nokia and Microsoft.
He holds a MSc degree in Electrical Engineering from Tampere University of Technology and is currently a student in Henley Business School Executive MBA program.