Planning for Uncertainty

December 11, 2009 by Taylor Studios in Professional & Industry Tips

How do you plan for things that are likely to happen? This week we learned we are likely to increase our work load in design by three times. The likely schedule for this work is rather quick. We will need to increase our capacity with hiring and other investments to accommodate this increased work load. These investment decisions have risks as some need to be made within uncertain terms. To a certain degree, all business decisions are made with uncertainty as none of us can predict the future. However, some decisions are bigger than others.

At Taylor Studios, management often does contingency planning. We do “what if” scenario sessions. For this particular project, we will do a pro/con analysis. We will put percent probabilities into the equation. Probabilities are educated guesses. We ask ourselves, given our current base of knowledge, what is the likelihood that this project will really be completed by 2012? What is the probability the amendment to the contract will be signed in time for us to complete the work? What is the likelihood other parties involved in the project will stay on schedule? Based on these probabilities, we will make investment decisions.

Other planning will include: plugging numbers into our various capacity reports, drafting schedules, making decisions on which team members go on which projects, what equipment and software do we need to purchase in the upcoming months, etc. How do you plan for uncertainty? Do you have the risk taking ability, like entrepreneurs, to make these types of decisions?

Posted by: Betty