Rational Manager - Future Analysis

How an organization will fare in the years ahead will be determined largely by what is being done
now.
You need to scan the horizon for threats and opportunities.
Potential Problem/Opportunity analysis enables us to look at the future see what it may hold then
come back to the present and
take action now where it can do the most good. It enables us to improve the future rather
than allow the future to arrive
entirely on it's own terms.
In contrast, where problem analysis and decision analysis are for immediate problems this is
entirely PROACTIVE.
It takes determination to make time for deliberating on imponderables and remote possibilities.
Conditions are always changing and change is what life is all about. Success and survival depend
on being able to anticipate change - to avoid
being swallowed up by it's negative effects and to sieze the benefits it offers.
PPO analysis is a systematic process for uncovering and dealing with potential problems and
opportunities that are reasonablly likely to occur and therefore worthy of attention.
The basic question to as is:
1) What could go wrong?
2) What can we do about it now?
3) What could go better than expected?
4) What can we do now to make the most of it?
A person can learn how to do this in a few hours and take the rest if his life learning how to play
well.
Basic Activities:
State the Action - the basic goal or end result of the plan or action to be implemented.
List potential problems - future undesireable or deviations to be addressed one at a time.
Consider causes for the potential problem - factors that could create or bring about the anticipated
deviation.
Take actions to address likely causes - ways to prevent the likely causes from creating the
problem or ways to encourage the likely causes to create the opportunity.
Prepare actions to reduce likely effects -wasy to minimize the impact of the problem should it
occur, or wasy to maximize the impact of the opportunity should it present itself.
Set triggers for contingent systems that indicate that a potential problem or opportunity has
occcurred.
--we focus on the deviations +/- and their causes and effects.
Every action has a cost. It calls for an allocation of resources against some future return. The best
deal is high return at minumum cost. You just have to do a

cost/benefit analysis.
It is not uncommon for a mangement team to choose an excellent alternative that has a couple of
substantial risks attatched to it. This is because they believe those are risks taht they can handle
with PPA. They think they can mitigate the risks. And if they do occur, the effects can be
controlled through contingent actions.
STATE THE ACTION:
LIST POTENTIAL PROBLEMS OR OPPORTUNITIES:
Where in our plan are we the most vulnerable?
What are the most likely problems that could upset our plans?
Vulnerabilities are most often identified by looking at what has been planned
then thinking of what would hurt most if the plan were to fall apart.
Step through the situation chronologically in time.
Anything that has never been done before suggests a vulnerable area.
So does overlapping responsibility or authority for any activity.
Tight deadlines represent vulnerable areas.
Activities that must be carried out at long distance - rather than under the direct
control of the person responsible for their success.
No plan ever comes off completely as envisioned. So any plan will have its gaps and
omissions.
You list potential vulnerabilities first, then decide on mitigating actions.
We list the areas in which we might have problems and EXACTLY what those problems
might be.
What SPECIFICALLY could go wrong?
CONSIDER CUASES FOR THE POTENTIAL PROBLEM OR OPPORTUNITY
It is first necessary to know what is likely to cause the problem in order to remove the
cause.
Having an exhaustive list enables us to spot most of the more probable causes.
TAKE ACTIONS TO ADDRESS LIKELY CAUSES:
PREPARE ACTIONS TO REDUCE (OR ENHANCE) LIKELY EFFECTS
SET TRIGGERS FOR CONTINGENT (OR CAPITALIZING) ACTIONS
A contingent action is a wasted resource if it remains unused when needed. Some
mechanism must be put into place to monitor the potential problem and activate the contingent
action at the correct time. The best triggers usually begin the contingent action automatically.
However judgement is often required.
When should we use PPA? Whenever experience or intuition tell us something could go wrong in
the future and the cost of it going wrong could be great.
Also when we are confident of success because of the nature of the actino or as a result of a PPA
but experience or intuition tells us that there would be value in exceeding expectations.