Technical teams waste executive time by presenting too many detailed scenarios instead of two or three clear trade-offs. Organizations rarely review past decisions against their models, which kills trust in the forecasts.
Questions this video answers
Speaker C explains that both involve varying input variables to calculate different outcomes, essentially making them the same in practice; the focus should be on performing the analysis rather than debating terminology.
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Pieter, what are your thoughts on this? It's a bit linked on this tendency of feeling the more details we put into the model, the more accurate it is, and therefore the more complex it becomes to actually present what did we simulate and what did we learn. And I think also to the point you'd made on going into an S&OP, I think it's the responsibility of, I would say, the technical teams to work through scenarios, understand what are the 2 or 3 main trade-off scenarios, and bring that to the executive leadership. to make a decision. And that's often what I think you can fall into the trap of. If you have 10 beautiful detailed scenarios, bring it all instead of do the work upfront and say these are kind of the boundaries of the scenarios we have. We either have to go into this extreme boundary or that extreme boundary and then make a decision. And the second thing that I barely see, and I'm not sure if that's specific to a company or if you see it in more industries, is that we always look forward. So we spend a lot of time talking about scenarios, and then we make a decision, and then we already look forward. But barely do we come back about a scenario which we discussed a month ago. When did we make a decision, and what was the reality following through? So there seems to be kind of a lack of learning and building and trust in the models we are using, because we're already looking back for the next decision into the future, rather than in a smart way trying to find how can we learn from how we use the model and let it actually help us make better decisions, rather than— it actually helped us to stay on track.
Thank you, Peter. Yeah, thank you, Sneek. We have a lot of questions, so I just want to interrupt the flow of discussion here. And again, if you have any other questions to ask, this is the time actually to go ahead and ask. Just click on the question mark at the bottom of the screen. But maybe let's start by, you know, taking some of the questions. Some of them I think have been covered, Some of them are not. So let me put them and spotlight them on the screen. So let me start with this question from Louis, who's asking, is scenario planning similar to what-if analysis, or what are the similarities and differences? Anybody would like to respond to this? Is it the same?
So, honestly, I'm not so sure whether I would spend time on debating whether it's the same or different. If you think about scenario planning, then you have different input variables, and then you basically calculate different outcomes based on that. If you have what-if analysis, it's basically you have different input variables and you want to understand the correlation on output variables, right? So for me, it's kind of the same, right? So it's more important that we do it than discussing what the difference is.
Okay, all right, okay, let's move on. We have a lot more questions, so we can take them quickly and each of you can respond to it. So let me move to this. Yeah, this is a question that Knut already kind of raised up.
