I was always impressed, from afar, with the Saudi government
approach to their stress testing of oil prices.; effectively budgeting a modest
figure and implementing a mechanism to
park funds into a reserve during high price periods. It appears to have served them well. Their method and approach was well communicated
to all who were paying attention.
Without pointing the proverbial finger, there are some countries, after worrying about
oil that has been stolen, often fail to grasp the eventual scenarios of
declining oil process. One country in particular recently announced that they
readjusted their budget to $65 as the price had already broken $60.
This is the third five month downward oil price shock in
recent memory, hardly unanticipated; and there will be few professionals who
had not developed this scenario within the body of their work. Even the triggers and trip wires have been
consistent. Has there been consistent communication to decision makers? Were those at the top of organizations who
are now under pricing pressure fully aware of the need to implement contingent
plans? Watch the news flow, and you will
see little panic from older established organizations. The newer industries (alternative energy) are
silent while waiting for data, which is a signal on its own. The
unsophisticated are relaxed while the hedges are in place but will have to face
the reality soon.
In your world, it is a good test to see if you had
communicated your scenarios and action plans.
Full Stop.
Does this rigor apply to self-evaluation? Those dialogues we have with ourselves where
we look at potential extreme scenarios and their possibilities are often
ignored in our personal lives. Food for thought.
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