Strategic Planning: Identify Your Short-Term Uncertainties
Although big, game-changing driving forces may present an array of opportunities and threats in your strategic plan, a number of smaller scenarios hit closer to home — the what ifs. These scenarios are short-term uncertainties that tend to keep you up at night.
A great way to test the waters of scenario planning is to build out a few scenarios based on one of your known short-term uncertainties or risks. This exercise can be accomplished in one or two meetings and is much less resource-intensive than more extensive scenario planning.
To build a set of short-term scenarios, you first have to identify one variable or area of uncertainty. Certainly, you can repeat this exercise numerous times, but for simplicity’s sake, tackle one risk at a time. Ask yourself the following questions to help you identify which variable you want to use:
What if sales are flat this year or sales decline by 20 or 30 percent?
What if sales increase rapidly, such as 25 percent or more?
What if accounts receivable collections slow by 30 days?
What if banks increase interest rates by several percentage points?
What if our biggest customer goes out of business or we lose our biggest client?
What if our competitors actively pursue our accounts?
What if we have a major public relations crisis, such as a bad product or a lawsuit?
What if we find out that important information from our company found its way into the hands of our competitors?
You may identify with one of these variables. If not, select one that’s most pressing to your immediate concerns or uncertainties.