Scenario Planning

“You had a pretty good year, last year,” I said. “What was your secret?”

“It was a solid plan, flawlessly executed,” Roberto flatly stated with a smile.

“I know that’s not true,” I replied. “I mean, I know you had a plan, but, that’s not what happened.”

Roberto’s smile turned into a grin. “Your observation is correct. We didn’t have a plan. We had four plans. We took the two largest variables that would impact our business and played them out in four quadrants. We played each variable up and each variable down in combination. At the time, what we thought would happen was very far from what actually happened. If we had not had three alternate scenarios, we would have been sunk.”

“And this next year?” I asked.

“Same. We thought we were finally getting back to normal, then Ukraine, protests in China and Iran, now a looming rail strike. You have to plan for contingencies, not just what you think will happen.”

A tip of the hat to Gideon Malherbe.

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