Are You Ready for Global Turmoil?

Recent headlines—Citigroup's layoffs, Iceland's sudden downturn, worldwide food shortages, etc.—suggest serious global turmoil is ahead. All companies, and multinationals in particular, should be prepared to withstand it.

Unfortunately, many are not. Traditional forecasting and budgeting systems produce linear projections insufficient for risky, uncertain times. What's needed is scenario planning, where companies stress-test their strategies and processes against a wide range of future scenarios to identify their vulnerabilities. Thus informed, the companies can adjust them to be more responsive and resilient.

But scenario planning often takes a backseat to more immediate concerns: developing new products, fighting an aggressive competitor, meeting earnings targets. So when large-scale external events hit, their impact is seismic.
Business Week