Has your company factored a reasonable number of “what-if” scenarios into its strategic plans? Have you underestimated your company’s full exposure when industry and market fundamentals keep shifting?
Time to undertake a 90-day set of actions to avoid the paralyzing and potentially deadly, “What do we do now?” trap.
Despite what recent history has taught us about the impacts of rapid and unexpected turn of events, surprisingly few food industry firms incorporate risk scenarios into corporate strategy. Chief executives agree that the ability to predict the future and respond quickly to threats and opportunities is a crucial part of their job.
We don’t suggest making strategic planning and execution any more difficult than it already is, but gone are the days of a precise, single forecast with a narrow, single strategy. We recommend a simple risk scenario process that factor in three plausible outcomes: one optimistic, one pessimistic and one most likely.
- Build a portfolio of moves, company and business unit models in response to relevant issues such as commodity cost volatility, availability of credit, competitive or customer consolidation, shifts in consumer patterns. Include big bets with large payoffs should opportunity arise.
- Consciously and dramatically strengthen and safeguard the organization by building resilience across key areas. This includes undertaking a series of no-regret actions that pay off and serve your business well in any scenario.
- Recognize the signals and warning signs that trigger scenario-based action when events unfold. Remain informed, vigilant and mobilized to expedite important new strategic decisions.
- Leverage a steady flow of intelligence on key customer or industry segments to enable quick action. Pursue a clear-eyed approach to secure your company’s position in the emerging situation or environment.
