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Key points

Scenarios - ompass and courseAction plans used in strategy formulation are:

  • a coarse estimate of what has to be done, how much it will costs, what is the benefit and who has to help.
  • usually multi-year plans
  • the rough numbers used to prepare a budget input

Use the action plan to:

  • rehearse, step through, block out the idea
  • anticipate who you need help from, particularly if they do not work for you
  • estimate the value the plan adds to the firm or the cost that has to be borne
  • make sure the strategy it supports is grounded in reality
  • compare different approaches

As long as the computations are consistent across all the action plans and the estimates are easy to explain, you'll have a good sense of the relative value of each plan.

Still, the value of each plan is an "experienced" guess: at best, first two years' numbers more reasonable than the "out" years.

And, for complex plans, the next step is bottom up estimates using project management software.

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