Understand how to understand and frame the current situation.  [That was not a Rumsfeldian typo.] Executives and investors make, or don’t make, decisions on how to allocate capital and other resources based on their understanding of the current situation.  On average, our team at Forisk supports over $1 billion in capital projects, transactions and plant construction in the timberland and forest products industry each year.  While everything may not look like a forestry situation or timber market, I have learned that few situations are that unique.  For example, common errors and sources of resistance to “scraping the ice off of the windshield” include:

• Failing to consider the view from the other side of the table. In forestry, when we own something – when we buy land and grow trees – we tend to see things from that point of view.  And yet owning timberland is but one side of a two-sided equation.  What does a mill see?  When a forest products firm thinks about building a mill, what does it look for?  Understanding this helps us assess timberland values and forest management strategies.  Conclusions from this type of analysis and research are relative.  It’s a constant comparison of one market to another, of one region to another, GIVEN an assumption about the economy.  
• Imposing rigid projections for the economy.  Nobody forecasts the economy well; it’s a hard place to create value. For capital budgeting and investment strategies in forestry, prioritize understanding how THIS local timber market or THAT local wood basket performs relative to every other given an assumption about the economy.  Massive economic growth?  “These timber markets are positioned to outperform those.” Brexit? “Those markets would be affected this way, and those timber markets that way.”  And so it goes.  
• Forgetting to test opinions and data sources.  When thinking about information and the situation, consider the source.  Who is telling you this and where do they get their information?  Few people I know have a process for testing their own ideas and assumptions, or testing and thinking about the data and information they hear from others. 
• Creating goals via fiat rather than by analysis. Pushing for stretch targets differs from disregarding the projections from your team and replacing them with a decree of what they should be.  I have heard too many times executives say their direct reports sandbag their budgets and expectations, and that they need to be pushed. Well who made them sandbaggers in the first place? (If that’s even true.)  Padding the numbers is a response to the organizational environment.  In most cases, it’s a culture that punishes missed numbers rather than risk taking.  Just understand what you have, why you have it, and how this lines up relative to what you actually want from your team, career and portfolio.

At the end of the day, we need to systematically aggregate the facts and organize them in ways that bring to the forefront an understanding of how things work. That means part of our responsibility and obligation is to develop a true sense of the current situation. Without that, it becomes difficult, if not impossible, to plan and strategize for the future. We must confirm the facts as best as possible given the time and resources available, get varying points of view on what they mean, think for ourselves what makes sense – is this operable? Doable? Actionable? Viable? – and if we remain unsatisfied with where we are, get back to getting more data and viewpoints.