{"id":1974,"date":"2020-05-08T08:00:41","date_gmt":"2020-05-08T12:00:41","guid":{"rendered":"http:\/\/markkirkwood.com\/?p=1974"},"modified":"2020-05-04T17:43:20","modified_gmt":"2020-05-04T21:43:20","slug":"using-scenarios-to-win-the-battle","status":"publish","type":"post","link":"https:\/\/blog.markkirkwood.com\/?p=1974","title":{"rendered":"Using Scenarios to Win the Battle"},"content":{"rendered":"
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The COVID-19 crisis is obviously having a dramatic impact on the world, and its trajectory is at this point unpredictable. As a result, the tremendous uncertainty about what lies ahead can cripple business leaders\u2019 ability to take strategic action. Public policy\u2014regarding financial interventions, for example, and the timing of the reopening of local economies\u2014is often ambiguous and is constantly being revised. When will people feel safe enough to resume normal life? How will this affect their consumption habits? Will social unrest erupt as the economic fallout intensifies? The answers to these questions and more will be of paramount importance to the business environment, but they are largely unknown\u2014rendering forecasts essentially impossible.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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Yet paralysis is not an option. In fact, taking action now, during the crisis, will be critical. A previous Boston Consulting Group analysis showed that\u00a0companies that began responding and communicating with investors early<\/a>\u00a0in the financial crisis of 2008 to 2009, for example, performed significantly better than companies that waited until the full-blown recession hit.<\/p>\n

So how can a company become an early actor in a time of extraordinary uncertainty and constant change? One key is to break down the timeline of the crisis into manageable phases\u2014in this case, the current lockdown period, a transition period lasting until the outbreak is brought under control, and the new-normal environment that will follow. Leaders should then build scenarios\u2014and update them frequently by monitoring a variety of real-time indicators\u2014to use as the basis for decision making. A temporary crisis management infrastructure is also necessary. Finally, by applying the military\u2019s OODA (observe-orient-decide-act) loop, the company will be able to act continuously in response to changes in the business environment\u2014and accelerate learning to gain a competitive advantage. Adopting such a military approach to crisis management can help because this is, after all, a matter of survival.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n

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DESIGNING SCENARIOS AND KEEPING THEM UP TO DATE<\/h3>\n
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The first thing to remember when developing scenarios in such an unpredictable context is not to get lost in unnecessary details and to avoid the lure of false precision. Scenarios should be combinations of assumptions about each of the following factors, which will determine the evolution of the current crisis.<\/p>\n