Scenario planning, an effective decision-making tool under uncertainty, is underutilized by organizations primarily due to deep-seated cognitive biases that exist. Drew Erdmann, Bernardo Sichel, and Luk Yeung of McKinsey & Company tell managers how to address these common biases and provide guidance along with a practice cheat sheet on the dos and don’ts of scenario planning. Read more on scenario planning and how to make it a successful tool for your organization in the McKinsey article, Overcoming obstacles to effective scenario planning.
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Modeling Uncertainty to Gain Better Insight and Create Value Gary Lynch, founder and CEO of The Risk Management Project, proposes that uncertainty is the new normal and that firms that espouse risk management can create and preserve value. In this article, Lynch describes how his firm used quantitative models to assist a manufacturer assess how it should respond to a competitor’s price-reduction strategy and how the strategy would impact the supply chain. The analysis enabled the manufacturer to share the insight with suppliers that challenged the sustainability of the competitor’s strategy.
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Uncertainty Surrounding the Court’s Pending Decision Causes Transaction Delay Private Equity International’s Graham Winfrey reports that whatever way the Supreme Court rules on healthcare may end up driving more industry activity.