Companies can’t build all possible events into their scenarios and should not spend too much time on the low-probability ones. Such executives are also well placed to build the organizational capabilities needed to face critical issues early and then use the extra lead time to gather intelligence, to conduct the need analyses, and to debate their implications. This will require collectively significant, shifts in their operating practices
Since determining what to do under uncertainty usually requires careful debate among many people across the entire company, you need processes and protocols to determine how issues are raised, how deliberation is conducted, and how decisions are made. You also need to clearly lay out the obligations of managers, once the debate and decision making are over, to put their full weight behind making the resulting actions successful.
Just-in-time (JIT) decision making:
Much of the art of decision making under uncertainty is getting the timing right. If a critical issue surfaces early, there is usually enough time to use proven problem-solving approaches to making decisions under uncertainty.
Structuring of decisions:
Decision tree help managers think about the structuring and sequencing of their decisions. Similarly, the organisation which can identify opportunities arising out of external factors will have above average returns for all its stakeholders.
We quote below from statement given by Castrol India Ltd’s management at the time of announcement Q3FY09 results, which clearly identifies threats and opportunities and take appropriate steps
‘This performance is attributable to the consistent execution of our long term strategy and is underpinned by ‘in year focus’ on margins, attacking cost inefficiencies and reducing working capital.