Next steps following video
If that video felt intimidating and overwhelming, don't worry! It's not as complicated as it sounds! Just take this process step by step. We suggest the step-by-step process below to get the job done. If you feel it necessary, get a Strategic Planning Facilitator to support you through this process.
Step: Assemble scenario team
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Action: List the group that will co-develop your 'Scenario plans'. This is probably a subset of your Task Team, likely including the CEO, CFO, and Head of Marketing / Sales.
- Suggested timeframe: Next 24 hours
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Action: Schedule a series of workshops as follows (feel free to integrate into a single event):
- Develop Macro Scenarios (2 hours);
- Develop Industry scenarios (2 hours); and
- Develop Revenue scenarios (2 hours)
- Suggested timeframe: Next 24 hours
Step: Define revenue scenarios
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Action: Run scheduled workshop(s) to define revenue scenarios; ensure that each result in a clear output (don't let perfect be the enemy of the 'good enough'. Speed - with practical and sufficient accuracy - trumps precision in this case!)
- Suggested timeframe: Within 1 week
- Suggested tools: Risk assessment matrix, Develop revenue scenarios presentation
- Develop Revenue scenarios (2 hours)
- Suggested timeframe: Next 24 hours
Step: Define cost cutting targets
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Action: Mandate your CFO / FD (or similar) to do the financial analysis to identify targeted Cost Cutting levels (as a % of total current monthly costs), as follows:
- COST CUTTING TARGET 1: achieved 6-months cash flow runway in Revenue Scenario 1 (the most optimistic Revenue scenario);
- COST CUTTING TARGET 2: achieved 6-months cash flow runway in Revenue Scenario 2 (the middle Revenue scenario); and
- COST CUTTING TARGET 3: achieved 6-months cash flow runway in Revenue Scenario 3 (the most pessimistic Revenue scenario).
- Suggested timeframe: Within 1 day of workshops mentioned above
- Suggested tools: Runway calculation model
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Action: Schedule a Workshop to review and finalise the Cost Cutting Targets (2 hours).
- Suggested timeframe: Next 24 hours
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Action: Conduct Workshop, review CFO analysis, debate, and finalise the 3 cost cutting targets.
- Suggested timeframe: Within 1 day of CFO analysis
- Suggested tools: Runway calculation model
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Action: Mandate your CFO / FD (or similar) to do the financial analysis to rank Cost Cutting opportunities based purely on your largest costs, using the template provided.
- Suggested timeframe: Within 2 days of CFO analysis (action 3.1)
- Suggested tools: Cost cutting plan tool
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Action: Schedule a Workshop to debate and finalise the Cost Cutting Targets (4 hours).
- Handle the debate 1 scenario at a time, starting with the most optimistic scenario, and concluding with the most pessimistic scenario
- For each scenario, identify which costs you will cut to achieve the cost cutting target. For each cost that will be cut, identify the % cost cutting required, the actions required to achieve that goal, and the person responsible
- If the cost cutting scenarios feel impossible, list the actions that would be required to achieve the target anyway. Those actions probably are not impossible (just traumatic), and may be required to survive; and
- For each cost cutting target, place the list of actions required to achieve that target in a single 'plan' (e.g. in an MS .Excel spreadsheet), and name each plan as follows:
- PLAN A (for the plan to achieve Cost Cutting Target 1)
- PLAN B (for the plan to achieve Cost Cutting Target 2)
- PLAN C (for the plan to achieve Cost Cutting Target 3)
- Suggested timeframe: Within 24 hours of CFO completing analysis
- Suggested tools: Cost cutting plan tool, Plan for cost cutting template (coming next week)
Step: Identify flags
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Action: Schedule a Workshop to identify the main triggers / flags to watch to understand how the future is unfolding, and what that means (i.e. which of your Scenarios looks most realistic, and therefore which PLAN you should be executing on).
- Suggested timeframe: Within 1 week of completing the Workshop to debate and finalise the Cost Cutting Targets
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Action: Conduct Workshop to identify the best triggers and allocate responsibility to your management team to undertake the activity required to 'watch those flags / triggers' (e.g. meet with customers to gather information on their future order plans).
- Suggested timeframe: Following previous workshop
Step: Integrate into task team
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Add an item to your standard weekly Task Team agenda, to discuss the Triggers, and conclude with a shared answer to these 3 questions:
- Which Scenario is most plausible right now?
- Therefore, which Plan are we executing on: Plan A, Plan B, or Plan C?
- If we're pivoting, what is the list of new actions we must now take as a result?
- Suggested timeframe: Following completion of step 4
