You're listening to Business English Pod, the Business English podcast for professionals on the move.
Hello, and welcome back to Business English Pod.
My name's Edwin, and I'll be your host for today's lesson on scenario planning.
How do we plan for a future that's so uncertain?
On a global scale.
We're faced with a pandemic climate change, social unrest and political instability.
On a local level, your business could be dealing with another set of challenges.
So how can we plan for what might happen in the future?
One of the approaches that organizations take in uncertain times is scenario planning.
In a nutshell, scenario planning involves discussing different possible future situations and planning for each possibility.
This kind of planning typically starts with exploring the situation.
Exploring the situation often involves a lot of speculation.
As you discuss what might happen in the future,
This helps you identify the key uncertainties you're contending with.
Of course, circumstances differ from place to place, so you may find yourself explaining contextual differences when you plan for different scenarios.
These discussions can be quite complex, so it's often a good idea to ask for a summary of the issues.
One more very important aspect of scenario planning is using evidence to guide the discussion.
In some cases, you will need to use this evidence to counter other people's optimism about the future.
In today's dialogue, we'll listen to a scenario planning discussion in a large retail firm.
Gwen is in a leadership position in the company's US headquarters.
She's talking with Natasha and Daniel, two executives based in another country.
The company is faced with the enormous challenges that the COVID-19 pandemic presents.
And in this discussion, they're exploring the entire situation.
As you listen to the dialogue, try to answer the following questions.
1.
At the start of the conversation, what government relief program does Natasha speculate about?
Two, what does Daniel say is one of the biggest uncertainties they're facing?
Three, what possible change does Daniel believe might happen, but Natasha doesn't?
Yeah, I've been following that too.
Even so.
It's getting pretty confusing, so before we get into any details, I think we need to take stock.
Well, the challenge here is everything is in a state of flux.
I mean, a big one is the rent relief program.
There's a strong chance the government will scale that back.
And there's rumors they might limit it to just small businesses.
Seriously?
I'm not sure what they expect from us sometimes.
They talk about recovery and jobs and building back better or whatever, but then they hang us out to dry.
I know, right?
But we have had some breaks from most of the malls on rent and opening hours, so we haven't had to reduce our net store count.
Yet.
Yet.
But more important is the whole furlough thing.
Time's up on that really soon, so we've got some difficult decisions to make.
No doubt.
Staffing and wages is clearly one of the biggest issues we're facing.
We're really trying to minimize the impact on our people, but there's a lot riding on what the government will do for Phase 2.
Timeline on that?
Nothing official.
Well, yeah.
That's a challenge, then.
I guess we have to decide whether it's viable to bring them all back.
As hard as it is to see people go.
Well, we did release some.
But that's not quite how things work.
I mean, we opted into the furlough scheme from the start.
Made total sense at the time.
We had no idea how things would play out.
But the deal is that we bring them all back.
We're on the hook for four months minimum.
Ah, I see.
Right.
So, just trying to wrap my head around this, can you give me a quick rundown of what we're waiting on?
Nationally, we're hoping the government is supportive of wages and payroll.
Plus, we're looking forward to announcements on rent relief and loans.
Then that'll be followed by local measures on taxes.
Deferrals, I mean.
But that's not everything, is it?
No.
We've got some deferred taxes already.
And loans.
10% forgivable.
Possible they'll bump that to 20%.
Sorry, Daniel, but don't count on it.
They've been sending a strong signal there'll be no changes to the original plan.
Maybe for the mom-and-pop stores, but not for us.
Hmm, that's going to be a tough pill to swallow.
In any case, those are the things we're waiting on right now.
There's also a lot of talk about going back into lockdown.
Now let's go through the dialogue again and look at the language and techniques the group used in their discussion.
Yeah, I've been following that too.
Even so, it's getting pretty confusing, so before we get into any details, I think we need to take stock.
Well, the challenge here is everything is in a state of flux.
I mean a big one is the rent relief program.
There's a strong chance the government will scale that back.
And there's rumors they might limit it to just small businesses.
The whole point of this conversation, as Gwen says, is to take stock or assess the situation overall.
This is an important exercise when things are in a period of change or a state of flux.
The first major issue that Natasha identifies is the government's rent relief program.
With these programs, many governments have supported businesses by helping them pay rent, which is usually one of the biggest costs for retailers.
Natasha isn't certain what the government will do.
Rather, she's speculating or talking about what they might do.
She talks about a strong chance of reducing rent relief and mentions rumors or unofficial information.
Speculating is just talking about what may or might happen and the chances of what's possible.
Let's practice a few more examples of speculating using this language.
From what I hear, masons may pull back on their European operations.
Well, it's possible prices will rise at the same rate as last year.
If we spent more on staff, we might be in a good position to expand.
There's a chance that in-store sales could drop this year.
Let's get back to the dialogue as Gwen expresses her frustration with the government.
Seriously?
I'm not sure what they expect from us sometimes.
They talk about recovery and jobs and building back better or whatever, but then they hang us out to dry.
I know, right?
But we have had some breaks from most of the malls on rent and opening hours, so we haven't had to reduce our net store count.
Yet.
Yet.
But more important is the whole furlough thing.
Time's up on that really soon, so we've got some difficult decisions to make.
There are certainly some challenges with fixed costs like rent when a business is closed or not operating at full capacity.
But that's not the only issue they face.
Natasha raises the topic of the furlough thing, which is a type of unpaid leave of absence.
A worker who is furloughed, doesn't work and doesn't get paid by the company, but they're still an employee and expect to come back at some point.
Let's hear what Daniel says about the furlough scheme.
No doubt.
Staffing and wages is clearly one of the biggest issues we're facing.
We're really trying to minimize the impact on our people, but there's a lot riding on what the government will do for Phase 2.
Along with rent, staffing is a huge cost for many companies.
But, just as we heard with rent relief, the group isn't clear on what's going to happen with the furlough scheme.
Daniel points out there's a lot riding on, or depending on, the government's decisions in this area.
Of course, it's difficult to plan when so much is riding on what might happen, but the whole process of scenario planning is about identifying these key uncertainties, then planning for them as best you can.
What are some other ways you can identify key uncertainties?
Let's run through some more examples.
Clearly there are a lot of questions about consumer demand this year.
One big issue we're facing is the coming change in the tax code.
It's going to be difficult to plan with so much political change happening.
There are a lot of unknowns around our relocation plans.
What does Gwen think about the furlough situation?
Let's listen.
Timeline on that?
Nothing official.
Well, yeah, that's a challenge then.
I guess we have to decide whether it's viable to bring them all back as hard as it is to see people go.
Well, we did release some, but that's not quite how things work.
Gwen believes they need to make decisions about whether it's viable or possible on a business level to bring back all the furloughed workers.
But remember they're talking about government support and government support can vary from area to area.
When Natasha says that's not quite how things work, she's talking about contextual differences.
This is a common situation.
Sometimes, when we do scenario planning, we're working with people who aren't in our own area or country, and in these situations we often have to explain what is different in our scenario.
Let's practice some more ways of explaining contextual differences.
That may be true where you are, but here the tax structure is very different.
We're dealing with a much stronger economy overall than you are.
The kind of messaging you're using won't connect with the people in our area.
Well, unfortunately, our rental rates are much higher than that.
We heard Natasha point out a contextual difference.
Now let's listen as she explains it in more detail.
I mean, we opted into the furlough scheme from the start.
Made total sense at the time.
We had no idea how things would play out.
But the deal is that we bring them all back.
We're on the hook for four months minimum.
Natasha is explaining the basics of the furlough scheme or program in her area.
Basically, if they furlough workers, they get government support, but they have to bring the employees back to work for at least four months.
They can't just let them go or fire them, as Gwen suggested.
Remember, the group is just exploring the overall situation here.
They don't want to get into too much detail about each aspect of the situation.
So let's hear what Gwen does next.
Ah, I see.
Right.
So, just trying to wrap my head around this, can you give me a quick rundown of what we're waiting on?
Instead of getting distracted by details, Gwen wants a summary or, as she calls it, a rundown of key uncertainties.
Scenario planning can get pretty messy or confusing.
In these discussions, it can be tempting to concentrate on one specific issue too much.
Someone often the person leading the exercise needs to bring the discussion back up to an overview level.
And that often means asking for a summary, as Gwen has done.
What are some other ways of asking for a summary of a situation?
Let's try some more examples.
Could you summarize the situation for me?
Just give me a recap of the big issues you're dealing with.
Without getting into too much detail, what's happening there?
Now let's hear Daniel's summary.
Nationally, we're hoping the government is supportive of wages and payroll.
Plus, we're looking forward to announcements on rent relief and loans.
Then that'll be followed by local measures on taxes.
Deferrals, I mean.
But that's not everything, is it?
No.
We've got some deferred taxes already.
And loans.
10% forgivable.
Possible they'll bump that to 20%.
Besides rent and staffing costs or payroll, which they've already discussed, Daniel mentions deferrals on taxes and loans.
Tax deferral means the government will defer or delay the date on which taxes are due to be paid.
Additionally, the government has provided loans that are partly forgivable.
That is, part of the loan doesn't have to be paid back.
In Daniel's summary he mentions that it's possible the government will increase the forgivable portion of their loans from 10 to 20.
But Natasha isn't so sure.
Sorry, Daniel, but don't count on it.
They've been sending a strong signal there'll be no changes to the original plan.
Maybe for the mom-and-pop stores, but not for us.
Natasha warns Daniel not to count on or depend on the government increasing how much of their loans are forgivable.
She appears to have evidence that there will be no change on this point.
She's seen strong signals or clear indications from the government that this won't increase.
Of course, scenario planning involves speculating and talking about what if.
But you can't just hope with no reason for good outcomes.
You need evidence to say that things are likely to move in one direction or another.
In this conversation, Natasha feels it's necessary to show evidence to counter Daniel's optimism or confidence about the future.
Hope is nice, but we need to base discussions of the future on evidence.
Let's try some more ways of doing this.
Don't be so sure.
The government just announced a tax increase.
That would be nice, but our research shows people aren't planning to spend much this year.
I'm sorry to tell you, but I've read that prices are going to keep dropping.
Well, with these new import duties, things don't actually look too good for us.
Hmm.
That's going to be a tough pill to swallow.
In any case, those are the things we're waiting on right now.
There's also a lot of talk about going back into lockdown.
Daniel calls Natasha's news a tough pill to swallow.
A tough pill to swallow is any news that we find difficult to accept.
But you have to.
We take pills or medicine to heal ourselves.
Those pills might be difficult to swallow, but they're important.
In the same way, when we plan for the future, we need to be ready to face uncertainty and difficult issues.
Now let's practice some of the language we learned in today's lesson.
Imagine you are a manager in an online retail company.
Your company is faced with a lot of uncertainty, so you're doing some scenario planning.
You're talking with an executive from head office about the situation in your region.
You'll hear a cue from the executive.
Then I'll give you a suggestion for what you can say in response.
We'll guide you through each step in the practice and provide an example answer for each response.
Ready?
Let's give it a go.
So, could you help me understand what is actually happening in your region?
Start by saying you might continue to see a decrease in online sales.
Answer Well, we might continue to see a decrease in online sales.
That's not good.
But I understand you're working on some upgrades.
Answer.
Yes, but it's just not clear when those will happen.
Really?
It's been so long.
Couldn't you find someone to do the work faster?
Answer.
Well, it's different here because not many companies can do the work.
Ah, right.
Well, maybe sales will bounce back anyway.
Now say there's no sign of that happening anytime soon.
Answer I'm afraid there's no sign of that happening anytime soon.
Now let's practice some of the vocabulary we've covered in this lesson.
In a moment, you'll hear a series of sentences with a word replaced with a beep.
Repeat each sentence, including the missing word.
For example, if you hear... You can say...
Let's schedule a meeting to take stock of the current situation.
After each response, we'll provide the correct answer.
Let's begin.
I feel like our partners have hung us out to dry on this project.
I'm finding it difficult to wrap my around all the changes.
Answer.
I'm finding it difficult to wrap my head around all the changes.
The government is sending strong... that they will reduce taxes.
Answer.
The government is sending strong signals that they will reduce taxes.
It looks like the central bank will... interest rates by half a point.
Answer.
It looks like the central bank will bump interest rates by half a point.
We've also looked at how to ask for a summary and counter optimism with evidence.
Thanks for listening and see you again soon.
