As uncertainty is a startup’s daily business, this shouldn’t’ be much of a problem, should it? Silicon-Valley-Entrepreneur and author of the bestselling book ‘The Lean Startup’ Eric Ries explains: “A startup is a human institution designed to bring something new under conditions of extreme uncertainty”.

So, startups now are supposed to have a huge competitive advantage compared to big, sluggish industry incumbents who lack the agility of small enterprises and react to rapid change like dinosaurs. With all their flexibility, creativity, drive, and variety, startups must be the winners in times of crisis, right? 

Wrong.

Many startups were totally hit by surprise and a lot of them didn’t or will not make it through repeated crises. It makes them feel utterly powerless and out of control. And they are not the only ones to feel that way.

With future scenario planning or, as I rather call it, future scenario thinking, startups can gain their power back and turn uncertainty into a competitive advantage, just like the Singaporean government did.

Turning uncertainty into a competitive advantage in Singapore

Singapore never had the luxury of not planning for the future.

It was a question of survival for the small island state. 

A country smaller than New York City, Singapore was thrust into independence in 1965 with few natural resources and even fewer people who believed it would survive the early years of independence. Its early leaders recognized the country's precarious position and launched a series of long-term strategic scenario exercises to increase their competitiveness on a constant basis. 

The technique they used, scenario planning, was first applied by the US Air Force for strategic planning in the 1940s. Then, in the 1960s and 70s, a team at Royal Dutch Shell famously adopted it for business purposes. With great success: Shell had already been prepared for an oil-shock scenario when others didn’t even dare to think about it. As a result, Shell was able to skyrocket from a rather weak market position to the top two of the world’s leading oil companies.

Members of the original Shell-team, like Peter Schwartz, author of the seminal book "The Art of the Long View," went on to found the consulting firm GBN (Global Business Network), the very company that implemented scenario planning on a constant basis in the Singaporean government.

It paid off: Singapore became a thriving economy. 

Today, scenario planning is a key part of Singapore's strategic planning process. Dedicated units in Ministries and agencies are now familiar with the key vocabulary and concepts of this methodology. 

For Singapore, scenario thinking has been useful in surfacing otherwise hidden assumptions and mental models about the world.

It can do the same for startups. Now more than ever. 

Don’t try to predict the future, create it instead

In the "just do it" startup mentality, the need for a vision of the future, a strategy, or long-term goals is often ridiculed. 

And indeed, trying to predict the future or making rigid future plans is a loser’s game.

How-so? Firstly, because detailed plans seldom accommodate big, surprising changes. “Everyone has a plan until they get punched in the mouth”, knows box champion, Mike Tyson. And secondly, because future predictions operate on the assumption that the future is already determined. Scenario planning, in contrast, operates on the assumption that we can shape the future, or as Abraham Lincoln once put it: “The best way to predict the future is to create it”. 

Be brave enough to face reality

The active creation of the future is only possible when we are firmly grounded in reality. The reality is, that qualitative factors like human behavior are much more unpredictable and define the future more than foreseeable and plannable quantitative factors. That’s the big difference between future trends and scenario thinking: the technique focuses on qualitative, not quantifiable drivers.

Why? Just think about Uber smashing the taxi business or Airbnb upending the hotel industry. A non-industry competitor hitting you from the sideline has the ability to impact your business much more than let’s say predictable demographic development.  

In the 7-steps scenario process, we face this reality by diving deep into internal and external driving forces, learning about true priorities and motivations, and surfacing hidden assumptions and mental models about the world. And that’s how we can turn uncertainty into a competitive advantage.

So, why should you think about the future again? Because it gives you the opportunity to make more conscious decisions for your business now and the ability to thrive in uncertainty while others are blindly tumbling around.

And, last but not least, the future will unfold with or without your consent. Wouldn’t you like to have a say in it and actively co-create it?