Planning & Risk: key terms, formulas and examples
Planning prepares you for the unpredictable: benchmarking, scenario planning, risk management and agile cycles. Core competencies show what to keep in-house.
Example
Prepare best, base and worst-case plans for next year's demand.
Takeaway
Plan in short cycles, review often and keep a backup plan.
Key terms
- Benchmarking
- Comparing your results with the best in your field.
- Core competency
- What a company does better than rivals and is hard to copy.
- Risk management
- Finding, ranking and reducing threats to a business.
- Agile
- Working in short cycles, learning and adjusting often.
- Budget
- A plan for how much money you expect to earn and spend.
- Scenario planning
- Preparing for several possible futures instead of betting on one.
- Management by objectives
- Setting goals together, then measuring results.
- Span of control
- The number of people a manager supervises.
- Chain of command
- The line of authority in an organization.
Formulas
PERT estimate(O + 4 × M + P) ÷ 6
Expected payoffp × G − (1 − p) × L
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