The last few years have been a harsh reminder of the importance of risk analysis and scenario planning for business unit strategy and strategic marketing. Secondary impacts of the pandemic (supply chain restructuring, inflation, consolidation, etc.) are creating new risks for 2023 and beyond. As you update analyses, be mindful of the biases that impact scenario planning and risk management.
Even global leaders in Davos get it wrong! Consider the example of the World Economic Forum (WEF) Global Risk Analysis, an annual survey of CEOs, Heads of State, and “thought leaders”. Respondents are asked to rank a range of threats to the global economy for probability and impact (fairly basic opportunities and threats analysis).
Market Edge transposes its output into our Opportunities and Threats tool to consider the following timeline:
In 2011, following the global economic crisis, the survey showed a recency bias toward economic factors.
In 2020, economic risks were replaced by environmental risks. The world mitigated both the probability and impact of those economic risks. Note – the survey was taken in Q4 of the previous year before the start of the pandemic. Greta Thunberg’s potential attendance and Trump’s presumed re-election amid a strong global economy were the buzz pre-Davos.
In 2021, in the middle of the pandemic, infectious disease and other COVID-related risks were scored higher (more recency bias).
The 2023 WEF Global Risks Analysis has just been released and Energy Supply and Cost of Living have moved to the top of the list.
Other common biases in strategy and marketing include:
Be mindful of bias when updating strategic plans. Include a range of team members and external participants to generate different perspectives and minimize herd mentality. If you are doing scenario planning and risk management and want a fresh, external perspective, contact us below.