Strategy can be distilled down to three broad questions that need to be addressed:
- Where do we play?
- How do we win?
- What resources do we need?
This is a neat distillation of a more complex and in-depth process, but imagine if you knew the future, how simple would it be to build a plan to maximise the value of knowing these three things?
Of course, no one knows the future so instead we build methods of managing against that information deficit. One way of managing the uncertainty is to narrow the spread of events, assess probabilities, and then plan against them. This can be effective provided you have the right spread and you can invest enough effort into making those plans.
One forecasting methodology typically used in business is scenarios. They are an effective tool for understanding strategic implications, assessing portfolio options, and to determine how much resource is put into planning for a given scenario.
Creative scenarios can certainly be useful in envisioning the spread of possible outcomes, but they have limitations, particularly when it comes to using them as a tool to make financial decisions.
Signpost has been developed to address those specific shortcomings. Signpost:
- Generates scenarios based on data, it is a reflection of what has happened in the past infused with potential future shifts.
- It makes forecasts as accurate and realistic as possible – based on relative not absolute values but providing a probability for each scenario at any given time
- Provides key data for making decisions around resource allocations:
Timing is potentially the most important of these parameters. Most of the big gains in strategy are based around making the right resource allocations at the right time. Being able to anticipate the right move and to be able to execute at the right time is where Signpost adds the most value.
The current Ukraine conflict is an excellent example. Europe has been developing a dependency on Russian gas for some time. Conflict was both likely and a knock-on effect would be to cause tightening of supply with associated price rises.
The conflict had been signalled for at least a decade, something that has been teased out during the Signpost fore sighting process. With this driver built into a model it provides understand of the:
- likelihood of a conflict event
- impact of that specific event on a commodity (in this case gas)
- timing of the event
For the Signpost user this generates key insights that allow them to prepare plans around these events so they are able:
- Observe the key signals that signpost a potential event
- Prepare plans for that event
- Execute the plan in time to maximise potential
Signpost can build scenarios around a range of commodities, around once in a lifetime events such as the energy transition, climate change or across a vast range of specific challenges.
We’d love to talk to you about your challenges and how Signpost can give you an advantage.