Decision making under extreme uncertainty: blending quantitative modeling and scenario planning

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My co-author Robert Avila and I have worked extensively together in challenging business environments in Latin America, where conditions can change abruptly, market data is often lacking or suspect, and the unwritten rules of engagement are challenging to discern for multinational companies. The Futures Strategy Group's tools for what we call "managing uncertainty" work well in such an environment; in fact, some were developed in the Latin American region. What we have found essential in seeking to learn underlying market dynamics is a strong sense of humility, especially about "unknown unknowns" which are invisible to researchers and analysts not resident in a country. For this reason we typically work with individuals and organizations in country, who can read and interpret political and economic signals, and who support our knowledge development efforts by conducting confidential interviews with key stakeholders and by actively contributing to scenario development. Most importantly, as consultants, we work closely with client project team, as partners, in these challenging kinds of engagements. This helps ensure that the there is a functioning action plan when the strategy work is done and that the client team feels sufficiently skilled and empowered to carry on follow-on market monitoring and contingency planning when the consultants are no longer on the scene. It's a happy formula that has served FSG and our clients well over the years.

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