What could possibly go wrong?

The more you can anticipate problems, the more likely you are to avoid or overcome them.

In ‘A Promised Land’ it was interesting, though perhaps not surprising, to learn about how the Navy Seals recreated Osama Bin Laden’s compound and rehearsed, for months, how the mission could play out, before the decision was made on whether to attempt the raid at all. As part of the process, they listed the variables, the things could go wrong, and how would the team act when they did go wrong, thereby increasing the chances of success.

Scenarios are a fundamental part of military planning, which can be applied to decision making elsewhere. In my experience, and errs, projects have tended to focus on something close to the best case scenario, whilst allowing a little slack in the budget and timelines for unforeseen events. Rarely do we list, in advance, the other likely outcomes and what we would do in the event that this branch of the scenario tree is the one that occurs.

There are three good reasons why scenario planning can help:

  • Firstly, it helps to recognise before kick-off, that there is a huge amount of uncertainty in every project. There are more possible outcomes than we intend. Knowing this makes you think more carefully about whether to invest the time and effort in the first place.

There are, of course, many different scenario-planning techniques. However, it can be as simple as listing possible futures. A useful visual is to think of the tree with the trunk representing the present and the branches, twigs and leaves representing different future paths.

Given each future, do we want to proceed at all? If this future occurs, what will we do then?

A few more takes on scenario planning:

  1. Probabilistic planning — in ‘Thinking in bets’, Annie Duke describes how she advised a charity to consider the probability of a grant being given in addition to the actual value, in order to decide which grants to pursue. So a $200,000 grant with a 20% chance of success represented a $40,000 opportunity. Whereas a $100,000 opportunity, with a 50% chance of success represents a better opportunity, at $50,000. It is easy to apply this technique to investments as well.

What’s stopping us from thinking rationally, most of the time, is a lack of time. So I’ll leave it at this.

Wisdom = prevention.

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