As we head into 2021, there is a great deal of uncertainty which can lead to analysis paralysis. Will Covid get under control or are we due for a months of lockdowns? Will the economy stabilize or will it plunge into recession?
The future is never predicable. We only have the illusion of predictability. In January 2020, you may have thought you had certainty, but that was not accurate.
How do you deal with uncertainty and make the crucial decisions that you need to make when planning for 2021?
Avoid Analysis Paralysis By Developing Scenarios
There is a continuum of scenarios that you could encounter over the next year which ranges from everything opens completely to everything shuts down completely.
If we break that down to three for simplicity, let’s call them Scenarios A, B, and C.
A – Covid goes away and everything returns to normal
B – Things continue as they are with uncertainty, occasional shutdowns, and economic instability
C – Full lockdown for an extended period.
Consider any plan you are considering against all three scenarios. The first question should be “does this plan allow my business to survive all three scenarios?” If there is a scenario in which your business fails, then you’re taking a big gamble. This is playing defense, making sure you don’t lose before you can win.
Next you ask “does my business thrive in one or more of these scenarios with this plan?” Now, we’re on offense, finding ways to win.
Within each scenario, figure out the best and worse case scenarios of any plan you’re considering. There’s more uncertainty than just Covid. Will customers respond to your marketing? Will your product supply stay consistent? Will your staff perform as you expect?
Looking at the plan, if it bombs, does it take the business down with it? If it hits big, is the dividend worth the risk?
The Importance of Structure in Planning
Analysis paralysis is often created by not having a rubric to apply to the analysis. By looking through the lens of these three scenarios, you have a structure to your thinking. You can then apply any possible plan to his process and run projections from there.
You may want to get more detailed in the scenarios, applying actual numbers or data or keep them vague like this, depending on your process.
I’d like to know what you think? Is it helpful to look at the uncertain future in terms of scenarios?
Working on figuring out how to best approach 2021? I’m running a series of free webinars to help build our your goals and plans.