Signpost Analysis – An Easy Way to Anticipate Long-Term Risks

With information and other demands for our attention bombarding us each day, it can be hard to think about the long-term. As a growing number of examples show, ignoring long-term risks to strategic objectives can be devastating, especially considering the world of Volatility, Uncertainty, Complexity, and Ambiguity (VUCA) we find ourselves in.

While discussing the VUCA concept in his book Decide to Succeed, Hans Læssøe instructs us:

In such a world, it is a matter of diligent preparation to ensure decisions and plans cater effectively to handling risks and uncertainties.

It can be hard to take the time to gaze into the future to anticipate what might occur, but it is vitally important to do so as best you can. While companies like General Motors have their own methods for understanding long-term or future risks, many organizations tend to forego this type of risk assessment because of time, logistical, and other constraints.

Signpost analysis is one tool organizations of any size and budget can use to understand long-term risks that slowly materialize.

Originating from the intelligence community, signpost analysis is a tool used for predicting uprisings and other significant events. Former Canadian combat engineer and current Director of Enterprise Risk at VIA Rail Canada, Benoit Ladouceur, discusses signpost analysis and a variety of other quick risk assessment methods in a session from the annual Risk Awareness Week.

As Benoit explains in his intro, risk managers can learn a lot from military and intelligence personnel about managing complex, uncertain situations.

In the business context, signpost analysis can be helpful for understanding long-term strategic risks that, when taken in the aggregate, can have huge impacts on the organization. Benoit uses a familiar analogy to explain the concept:

…something that is basically the frog in the boiling pot where you don’t see the signs until it is too late and then you didn’t act and you get took [sic] by surprise.

Examples of where signpost analysis can be applied include understanding:

  • Climate change impacts
  • Political unrest
  • Economic recession/depression
  • Competing commercial products or services (e.g., taxi vs. ride-share)
  • Internal projects and initiatives

In the case of VIA Rail Canada, Benoit explains how they currently use signpost analysis to better understand the risk of autonomous vehicles, which if adopted on a mass scale, would be a clear and present danger for a passenger rail line.

Below is a screenshot from the webinar of a sample signpost analysis for a large project. As you can see, you have the starting point of the project on the left and the possibility of the project’s failure or “budget blowout” on the right. If one of these events were triggered in isolation, it wouldn’t be a huge deal. However, if the triggers occur as a sequence or chain of events, the end result could be the project coming in way over budget or not being completed.

Each of these early warning signs represent a “milestone” or “sign post marker.”

There are no particular rules or set number of milestones – over time, you may add some or take others away. Milestones can either be completely qualitative or have some sort of measurable target (i.e., quantitative).

Each milestone serves as an early warning sign that a risk is starting to materialize. Instead of reacting and scrambling like the proverbial frog, this early warning system helps you proactively determine the right risk response in an orderly way. It also forces you to look at long-term trends that develop slowly and thus are easy to forget about.

Besides understanding when risks are materializing, signpost analysis is a helpful tool for combating confirmation bias and encouraging deep thinking.

The benefits of signpost analysis extend beyond understanding long-term risks.

As I discuss in this recent piece, confirmation bias, which basically involves picking and choosing information that supports your own opinion, is a common trap that prevents good decision-making. As Benoit explains in his session:

…we all have opinions. If we don’t keep [sic] open-minded, we will only pick information that suits us.

Taking the time to identify and research milestones can help protect against this dreaded problem since you are (…or at least you should be) looking at a variety of different sources, even ones you may personally disagree with.

Identifying and researching milestones also spurs deep thinking, which is something we tend to forego in today’s fast-paced world. However, taking the time to reflect instead of just going with your gut feeling will pay off tremendously when you prepare for long-term threats.

Gazing into the future to understand threats and opportunities can be more of an art than a science. However, with tools like signpost analysis and others, risk managers can transform the ERM function into a valuable tool for ensuring the company’s long-term success, not just avoid failure or satisfy regulators.

Signpost analysis was one of several tools Benoit discusses in his session. I highly recommend checking out the entire presentation from RAW 2020!

What type of tools do you use to understand long-term risks?

Have you and your organization been caught off guard by seemingly disparate events that culminate in a big way?

I’m always interested in learning more about methods for better understanding threats and opportunities. To share your thoughts and experiences, feel free to leave a comment below or join the conversation on LinkedIn.

And if you are struggling with how to best understand long-term risks to your organization, please don’t hesitate to contact me to discuss your specific situation today!

Featured image courtesy of Viajero via

Posted in

Sign Up For Our Newsletter

Sign Up For Our Newsletter


Meet Carol

Helping companies achieve their vision and strategy, and succeeding in today's turbulent world, is something I'm honored to be a part of. Whether you're an occasional blog visitor or a long-term client, thank you for letting us be a part of your journey.

Most Recent Posts

The 12 Days of ERM Christmas

Without a doubt, one of my family’s favorite holidays is Christmas. Part of the fun, especially for our son, is seeing what “Santa” brought, but most importantly, we treasure the spirit of peace and goodwill the season brings. And after what seemed to be a never-ending warm spell, the weather is expected to be good…

Read More

Don’t Let Goals and Initiatives Be Blindsided by External Events

As the end of the year draws near, I think we’d all agree that while it wasn’t without its challenges, this year also wasn’t quite as turbulent as the previous two. While a lot of people are juggling company parties, shopping for friends and family, and special activities for the kids, most companies are putting…

Read More

Going the Distance: Ensuring Successful Execution of Strategic and Annual Initiatives

Strategic planning is a challenge – of all people, I understand… After all the meetings, risk and data analysis, and brainstorming of the preceding months, it’s tempting to think this is the end of the road and you can relax. Contrary to this common perception though, this is exactly not the time to relax, but…

Read More

Avoid Rookie Mistakes and Protect your Internal Reputation

Be honest – have you ever done something that you soon realized was a real rookie mistake? Me raising my hand… Considering the nature of ERM’s role to ask questions and challenge assumptions (often during conversations with executives), it can be argued that, in at least some cases, the expectations bar for risk professionals is…

Read More

ERM at Thanksgiving – An Illustration of Risk Management in Action

On occasion, I like to take some of the concepts we risk professionals think about in our jobs and apply them to different personal situations…take some of the same concepts we use when working with executives to develop corporate strategy and manage risks or uncertainty around that strategy. It’s Thanksgiving week in the U.S. –…

Read More

Why Quantitative Risk Assessment is Not Just the Best But the Only Option – A Conversation

Periodically, I have the pleasure of speaking one-on-one with Hans Læssøe on a variety of topics around ERM, strategic risk, and other issues and trends. As you know from my previous conversations (here, here) and posts featuring his work, Hans was formerly a practitioner at the iconic LEGO Company, but even more notably, is a…

Read More

The Three Lines Model – 3 Reasons Why I Don’t Like It

Everyone likes a clear-cut template that offers an easy way to create or manage something…I mean what’s not to like about a step-by-step process for accomplishing what you want? Sometimes this can work without any issues, such as the case with the Project Management Book of Knowledge (PMBOK), ISO 9001 standard, or a new cooking…

Read More

5 Avenues for Expanding your ERM Knowledge

One thing I was taught to appreciate from a young age was the value of education and knowledge. It didn’t necessarily matter what the subject was, just that I always maintain a learning or growth mindset regardless of my current status in life. This mindset has served me well over the years, and it’s a…

Read More

Storytelling and Risk Management – Developing Skills that Technology Cannot Replace

It’s amazing how technology has developed and changed our working world over time. Imagine trying to run my risk and strategy consulting firm without tools like Zoom, Box, Slack, and other ERM-specific technology tools. There is no way we would be able to serve our clients the way that we do. Just consider how the…

Read More

3 Phases to Creating and Launching an ERM Program Focused on Organizational Success

If you’ve been handed the task of creating an ERM program for your organization, let me first offer my congratulations quickly followed by my empathy for the task ahead of you. I don’t say that to scare you but to provide a small dose of reality. Building, launching, and refining an ERM program that is…

Read More