Applying Scenario Planning to Talent Planning
Predicting the talent an organization will need, even in the short term, has become futile. The pandemic, global warming, the growing risk to computer systems from hackers, and the growth of artificial intelligence have changed the mix of skills organizations need and made traditional talent and succession planning relatively useless.
Even the competencies organizations deem critical to future success change rapidly and are unpredictable. The key to success is being able to anticipate possible needs and having the capability to respond agilely and quickly.
Scenario Planning
Scenario planning is a way to develop strategic foresight and contingency plans to respond to possible future needs. It involves imagining and posing situations that might happen and then developing plans on how the organization could react if the situation occurred.
Scenario planning involves brainstorming uncertainties that could impact talent needs for your organization. Then choose two or more of these uncertainties as most impactful and imagine four possible scenarios. You can create as few as three or as many as six or eight different scenarios, although four seems best as it forces the team to concentrate on the most significant ones.
One of the three or four would be the situation you expect to happen or is most likely, and one should be the least likely or the one you do not think will ever happen. Another should be the crazy, way-out-there wild card – a scenario you believe could not and will never happen. The other situations can be somewhere between these extremes.
It is not a new methodology. Shell Oil used this approach decades ago. One situation they imagined was that a cartel of a few nations would emerge and control the supply and price of oil. When this occurred with the creation of OPEC, Shell was the only energy firm with a plan to cope with the situation. Their response made them a very profitable firm.
They continue to use scenario planning as the future of energy remains volatile and changing. Shell has developed three possible scenarios describing how the world may respond to global warming after the Paris agreement. They call these Waves, Islands, and Sky 1.5. You can learn more about them here. These are good examples of how you might create scenarios for your function.
Below are some thoughts on how you can develop talent scenarios for your firm. All scenario development is a team process that needs to involve as many diverse functions and people as possible. Individuals from all relevant functions should be part of the group that creates these scenarios.
Take the time you need. It may take days or even weeks to develop robust scenarios – it is essential to devote the time needed to brainstorm, discuss, and create scenarios that reflect your group’s collective thinking and encompass existing data.
Available Resources
There are many resources to help you get started and understand the how-tos of scenario planning. For a general understanding, one of the best is a book by Peter Schwarz, an early advocate of scenario planning at Shell, entitled The Art of the Long View: Planning for the Future in an Uncertain World. Another book is Scenario Planning: The Link Between Future and Strategy by Mats Lindgren and Hans Bandhold.
For real how-to-do advice related to talent planning, this resource by Steven Forth is excellent.
Focus on developing at least four alternate scenarios.
Put together a team of hiring managers, recruiters, HR professionals, technical staff, and any others you feel have something to contribute. With this group, brainstorm key uncertainties and develop scenarios about possible future business directions and the talent your organization will need to respond.
It would be wise to tap into all the data you can find on the available talent, including the gig workforce and students. You should gather data from talent intelligence tools, government sources, and futurists.
Discuss the skills and number of people your organization may need if these scenarios happen. Doing this, you will see the skills gaps and where you need to build your talent communities and pipelines or create development programs.
Just as CEOs cannot anticipate what future strategies will be successful, you can not predict what kinds of people your firm will need in the future. Based on these future possibilities and your employee skills gaps, widen the types and backgrounds of the people you have in your talent pool. Actively source a wide variety of people with different skills that might be useful if any of your scenarios become reality. A broad pool makes it much easier to find that “impossible” candidate when the time comes.
Knowing where potential talent is located and how to contact them increases the chances of having the person you need on tap when needed. Success in this area can be seen and measured. When the time to present a suitable candidate to a hiring manager approaches zero, you have achieved success. No search was necessary because you had already anticipated the possible need and had someone waiting in the wings.
I have created a simplified example below. It explores how the talent world might look in three years. It is important to brainstorm what the world might look like at a specific time, often in 3, 5, or 10 years.
Let Your Imagination Soar
The real power of scenario planning is when you let go of what you think or hope will occur and explore the edges of the possible. It is critical not to let assumptions limit your scenarios. This is why a diverse group is essential so you do not get bogged down in what you can already see. Do not discount unconventional thinking. For example, who anticipated that Russia would invade Ukraine? Most of us thought that a war in Europe was not likely or even possible in this era of peaceful nations.
Develop multiple talent pipelines.
Every organization with any sizable recruiting volume (actual or projected) must have more than one or two sourcing capabilities. You should have a robust career site that generates at least 30% of all your candidates; 30% or more come from employee referrals, and another 25% from internal promotion. The remaining 15% can come from your talent pool and from the pre-need searches you conducted based on your scenarios.
A tiny percentage of total hires should come from recently conducted searches or search firms. A high rate of candidates coming from these sources indicates a reactionary recruiting function that will struggle to be successful.
Creating Scenarios Increases Your Influence
You can use these scenarios to explain why you need resources or are taking a certain direction in your recruiting. They can help illustrate needs and gaps in skills and open access to resources and tools you can use. Because scenarios can be written as stories, they are compelling.
I urge you to try this approach. It is a useful and insightful way to explore the future of work, the skills your organization might need, and how you will find those skills.
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