What can Michiel de Ruyter teach us
about investimgInvesting in the footsteps of Michiel de Ruyter
Scenario planning has been a common practice in military strategy for centuries. For example, Michiel de Ruyter's (1607-1673) success in the major naval battles with England is partly explained by a methodology we would now call scenario planning. In preparation for major naval engagements, De Ruyter created various representations - scenarios - of what could happen. He trained his troops by conducting mock battles: "Cruising off the Vlie and Texel, De Ruyter's fleet practiced (...) through mock battles, which revealed various flaws in the captains' leadership and their adherence to written and verbal orders, and thus immediately proved to be very useful." His biographer, Van Reine, writes further: "De Ruyter invested a great deal of time in preparing for a naval battle. On the eve of a battle, he regularly recorded in his ship's log the deliberations on board (...). De Ruyter ensured that no combat maneuver or battle order presented his men with unforeseen difficulties. De Ruyter's methodology arguably makes him the world's first successful scenario planner.*
De Ruyter's methodology arguably makes him the world's first succesful scenario planner
De Ruyter demonstrates how a strong strategy can help you face the future decisively: by considering different scenarios of what could happen, known as scenario planning. This also forms the core of the Hoofbosch philosophy.
Avoiding risks instead of spreading risks
De Ruyter worked with various scenarios: For example, what to do in the event of fog, shifting winds, or the loss of the flagship? Hoofbosch considers possible futures in a similar way: For example, what if interest rates rise? What if a recession occurs? What if the euro collapses? We then test our strategy against these different scenarios. And if necessary, we adapt our approach so that it is robust enough to withstand diverse future scenarios. Our ultimate goal is to avoid risks, not diversify.
*From: Slag om de toekomst, Marius Rietdijk and Martien van Winden (2003)
