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Cool Tool

Arie De Geus espoused the practice of scenario planning in his book, The Living Company. He advocated that organizations can and should build "muscle memory" for how to respond to various scenarios so that they will be ready when the time comes. A cool tool that I recently learned from Vistage Speaker, Gideon Malherbe, helps CEO's and executives imagine different scenarios. Using this tool you can build four different scenarios and make plans for each. Here's how it works:

Step One: Consider: What are the forces driving my business? My world? At a high level you might consider these five categories: social dynamics including demographics, economic issues and trends, political or regulatory issues, technology issues and the environment. At a more day to day level commercial and residential construction are principal forces driving demand for a variety of different businesses. New competition in the market is a force that could impact a business. These day to day forces are presumably a function of one of the higher up categories.

Step Two: Once you have a list of the major forces driving your business you need to determine which are the most significant. And of the most significant you need to select the two most unknown or unpredictable forces.

Step Three: Plot one of the forces as a continuum from one extreme to the other on the X axis and do the same for the other force on Y axis. See Diagram.

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