How to make hard decisions easier with scenario planning

This is one of my business mantras assuming that almost any decision could be corrected, or adjusted with other decisions in the future.

“It’s always better to make a decision rather than let the circumstances decide for you”.

I found the timing to be way more important than playing a polished decision in the startup World. Execution can teach you in practice how your decision impacts your customers. This is the best base to use and reiterate. It is even more relevant when your product decision could be reverted easily, in case they have a negative impact.  

However, everyone has a different perception of risk along with gain and loss in any business decision. It’s never been a good decision to spend time with your team to play head against head, metaphorically speaking “playing goats wresting” on who has the best prospecting or worst who is right. Using scenario planning can help the team to agree quickly and make meaningful work happen in a short period rather than spend time in long meetings on who has the best opinion.

These situations can go on for weeks and you can be trapped in a trench to discuss who is reasoning better and more eloquently to get all the team support and a green light to go ahead.

How to calculate and use simple scenario planning

Start from a data source that is universally accepted to all your team such as funnel conversion metrics that are reported monthly. This can be a starting point in the case you are in a conversation on how to improve your onboarding metrics that require product changes.

📊 Quantify the loss of not making a decision

For example, taking the case that you and your team are working on how to increase your funnel conversion. You can quantify how many users your team lose at each step of the funnel and build the scenario on the monthly and quarterly loss. This is useful to identify the impact of any decision that could be taken at this step and it can help to prioritise based on the team’s goals.

🚂 Build your scenarios and measure the impact

This is a simple example, that uses daily conversion data to create two scenarios when the conversion rate increase and decrease.

The increased conversion table, in green, represents the gain in the number of paying users at different percentages of conversion rate. All scenarios for the increase in conversion are quantified in the number of paying users at daily, weekly, monthly and quarterly levels.

A similar thing is represented in the scenarios where the conversion rate decrease, in the grey table. Quantifying the “decrease scenario” is useful to define the boundaries of a negative outcome of the product change that you could consider.

Along, with this, would be useful to define the minimum timeline that the test should run to have initial signs that the specific product change increase or decrease the conversion. This would vary from business to business and other people can point out that this is not statistically significant.

I got your point! I love statistics too.

However, in many early-stage businesses, you don’t have the volume of users to have statistical significance to almost any test. In this case, you could look at the early signs that can give you a glance that you are going in the right direction or not, like the metrics of the previous conversion steps in your funnel.

For the minimum test time, one example can be to remain under a week, around 3-5 days. This will help to have a short turnaround between the next implementation of the specific product change and build powerful growth metrics.

In case, the change causes a notable decrease in conversion at this time you can revert the changes and the loss of paying users would be minimised as the grey table example.

However, here you are just evaluating things on an early sign to move quickly and have a fast reiteration on your product changes. In case, you have weak early signs of your change you can keep the test running a few more days until you can judge the outcome.

🥡🥢Takeaways

Not taking a decision is already a decision. Waiting for the great decision just made a dent in your run rate more than penalising your current performance in many scenarios. In addition, if you can decide on early metrics of a product change, it is a strength to move things quickly and have an astonishing month over month growth.

Scenario planning can help to quantify the opportunity in decision making. Also, not taking an active decision is still counted as decision making. In this example, the volume of paying users that you can gain from the positive conversion rate optimisation is on the green table.

Another powerful win is to share and explain your scenario planning before a team meeting. That will help you and your team to use scenario planning to take a faster decision and reduce the subjectivity of the opportunity.

Do team reflection with the scenario planning, product change timeline and align everyone around the table on the same page. Incorporate the team’s feedback in the scenario planning and use that as a stepping stone to take further decisions. This will help to move all your team as one entity, secret powerful momentum in the team and to speed up the execution.