2. A Most (Un)Likely Case Scenario
There is turmoil at The Osborne Company! Management can’t get together on their Strategic Plan for next year. Marketing believes that unit volume will be at a certain level; manufacturing says that marketing’s forecast is too high; and the CEO, who marches to a different drummer, has yet an even higher level of volume. Take into consideration that certain elements of raw material will have to be outsourced at potentially different prices depending upon supplier availability and throw in that there may be an increase in the minimum wage. Oh, and by the way, a mandatory debt repayment is required.
Amid this turmoil, the CFO has been asked to create the Most Likely Case Scenario. Sound familiar? Let’s see how he handles it?
1. Navigating Through Uncertain Times
When has a strategy that you have undertaken followed the precise path that you pictured when you laid out that strategy? The answer is probably never. Why? Because life is happening. Because actions and inactions, taken or not taken, by customers, competitors, governments, regulators, etc are occurring simultaneously.
The weather forecasting community introduced us to the term – the cone of uncertainty – as they attempt to predict the path of a storm. I submit that a company’s strategy can also be projected with its own cone of uncertainty.