We are preparing our business for a potential transition under the Step by Step Exit framework, but we are worried that rapid AI developments will make our current service delivery model obsolete before we can exit. How do we use Scenario Simulation during our annual planning session to identify and mitigate technological obsolescence risks?

Question

Tyler Smith · Accepted Answer

Preparing a business for transition under the Step by Step Exit framework is difficult when technology is shifting the landscape on a monthly basis. If you are worried that rapid AI developments will make your service delivery model obsolete before you can exit, you must use Scenario Simulation during your annual planning.

During your next planning session, have your leadership team simulate three specific strategic outcomes. First, model a scenario where a competitor launches an automated tool that cuts your delivery time in half. Second, model a scenario where your primary software vendor integrates an AI feature that makes one of your core services redundant. Third, model a scenario where customer demand shifts entirely to self-service AI platforms.

For each scenario, identify the immediate impact on your gross margins and your Accountability Chart. Use the IDS® process to determine how your business would adapt. This exercise helps your team shift from reacting to market changes to proactively designing your operations to withstand technological shocks.

By stress-testing your V/TO® against these simulated threats, you can build a highly resilient business model. Strategic buyers want to see that your business is insulated from technological obsolescence, making your exit plan robust and your valuation secure.