February 2018
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Green Shoots and Dark Clouds

Prediction is a difficult business

The news is full of stories claiming to see the bottom of the recession or the proof of recovery, while others claim the worst is yet to come. Choosing between hoping for the best and preparing for the worst is hard – and delay is not an option for everyone.

There is an option, which can make the decision easier. Instead of devoting endless hours to deciding which prediction is right, pick the one that seems most likely and then determine the worst case.

Base your planning on the most likely scenario, but use the worst-case scenario to enable you to recognize major risks when they appear. Time will show which scenario was most accurate – and should you need to change plans, you will have a scenario ready upon which to plan.

Most firms spend a lot of time fine-tuning their predictions beyond what is necessary. The future cannot be predicted with complete accuracy and the attempt often takes time from more fruitful tasks. Having two scenarios helps prepare you for uncertainty and can help relieve the need to constantly adjust your predictions.

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