Programme Summary

In an attempt to forecast the consequences of their actions and decisions and to set sensible expectations and targets, business managers regularly produce very detailed plans, often stored in mega-bytes of spreadsheets. However, what is rarely taken into account in a systematic way is the uncertainty of the environment in which the business operates.

This programme will introduce critical mental concepts, language and techniques that will enable you to engage in a mature understanding of the interplay between your business model and the uncertain future of the environment in which you operate.

Generating value is a complex business. From a planning and forecasting perspective, organisations face two types of complexities. The first, captured in a company's business model, explains how the existing social and economic conditions are converted into value for the organisation's stakeholders. This is challenging in all industries, from petroleum to pharmaceuticals to telecommunication, from banking to manufacturing, from retail to health. To capture some of these complexities, we produce spreadsheets that seek to accurately predict the value-flow within our organisations. But then we expose these plans to fairly crude assumptions about the future social and economic environment! This unpredictable change in the environment that our business operates in is the second major complexity in planning. The two complexities - the value creation model and the model of change - must go hand-in-hand. Yet, in practice while much systematic planning effort is put into the former, the latter is often left to an agreement on "sensible base case assumptions".

We can do better than that - and this programme shows you how.

Topics

• Luck as a driver of performance
• The language of uncertainty: from narrative scenarios to uncertain numbers
• The technology of uncertainty: the shape of uncertainty in planning models
• The flaw of averages: business cases based on average conditions are fundamentally flawed
• Options thinking: shaping performance through flexibility
• Portfolio thinking: shaping performance through diversification and hedging

Benefits

• Develop a more mature understanding of the uncertainty your business faces
• Embrace uncertainty systematically in your business planning process
• Learn to apply simple tools to test and refine your economic intuition and formulate value propositions in your planning processes
• Develop more robust planning technologies for managing your business