Canon glossary

Stories are remembered up to 22x better than facts alone

Ideas presented in threes are more memorable and satisfying

Setup, Confrontation, Resolution - classic dramatic structure

Shared identity increases influence - emphasize common group membership

Mapping customer jobs/pains/gains to your value proposition

A structured way to think about the future when prediction is impossible. Build three to four distinct, internally-coherent stories of how the world could unfold, and stress-test strategy against each. The output is a set of named worlds the team can argue with — not a probability distribution.

When to use

Time horizon ≥12 months · ≥2 high-impact uncertainties that cannot be expressed as probability distributions · top two uncertainties roughly independent · team commits to revisit every 12–18 months. For shorter horizons use sensitivity analysis; for quantifiable risk use Monte Carlo; for one-dominant-uncertainty use cascade scenarios.

Why it works

Solves the two failure modes of forecasting at once: being precisely wrong (point estimates anyone can falsify) and uselessly hedged (ranges so wide they cannot guide action). Scenarios commit to a small set of plausible worlds and crystallise strategy into no-regret moves, sequenced bets, and lose-everywhere moves to drop. Names + early signals + wind-vane triggers turn the exercise into a usable contingency plan.

Purpose

Force narrative discipline on multi-year decisions where single-point forecasts fail. Translate structural uncertainty into a small set of decision frames the boardroom can act on by name.

Anti-pattern

Best/base/worst case (three points on one axis, not four scenarios) · probability-weighted average of scenarios (collapses to expected value) · Goldilocks-spaced scenarios that rank good-to-bad · scenarios named "Scenario A/B/C" instead of world-shape names · 50-row Excel labelled as a scenario (model, not story) · scenarios without measurable early signals.

You value the target by summing the appraised or marked-to-market

You project free cash flows over an explicit forecast period (typically

You model the target as if a private equity buyer were acquiring it,

You apply a peer-derived multiple (EV/EBITDA, P/E, EV/Sales, P/NAV) to the

You apply multiples derived from comparable historical M&A transactions

The mirror-image thesis. Management responding to an activist campaign,

You argue the target is over-capitalised, has been chronically poor at

A specific subset of operational turnaround focused exclusively on

You argue the board itself is the constraint — its composition, tenure,

A specific subtype of undervaluation: the target trades at an

You argue the target's underperformance is operational — costs too high,

You argue the target should be sold to a strategic acquirer or to

You argue the target should fundamentally change its strategic

The most-used thesis type. You argue the target's intrinsic value is

You visualise two futures side by side: the trajectory the target is on today, and the trajectory under your proposed intervention. The reader has to see the delta to feel the stakes. It's the rhetorical cousin of the peer-gap — same visual grammar (comparison), but across **time** instead of across peers.

When to use

For turnaround / reform proposals

Why it works

- It **quantifies the opportunity cost** of inaction. "Doing nothing" becomes a concrete, visible path, not an abstraction. - It **makes the Answer tangible**. The prescription isn't a paragraph; it's a trajectory the reader can point at. - It **pre-empts the status-quo defence**. Management usually argues "we have a plan". Your chart shows what their plan looks like vs. yours. - It **satisfies both the Architect** (math adds up) **and the Storyteller** (emotional delta between two futures).

You argue the target should be separated into two or more independent businesses — via spin-off, sale of a segment, REIT conversion, dual-listing unification, or carve-out IPO. The thesis: the parts are more valuable apart than together, because the market assigns conglomerate discounts, misallocates capital across segments, or misprices a hidden asset. This pattern usually combines with `patterns/sum-of-parts.md` (the valuation proof). This file focuses on the **strategic move** of proposing a breakup, not the valuation mechanics.

Why it works

- **Structural solutions beat operational ones rhetorically.** "Sell the segment" is cleaner than "improve the segment's margins by 300bps". - **It neutralises the CEO-can-fix-this defence.** Even a great operator can't fix a capital-allocation problem structurally baked into the company. - **It offers a clear realisation path** with historical precedents — the capital markets know how to spin a subsidiary. - **Tax-efficient mechanics exist** (Section 355 spin-offs in US, demergers in UK/EU) that neutralise "too tax-inefficient" pushback. - **It shows management what "yes" looks like**. Vague demands get rejected; a specific structural proposal forces a yes/no.

You reproduce management's own words — verbatim, with source and date — and then place them next to the outcome that contradicts them. The CEO built the rope; you put it around their own neck.

When to use

When management credibility is the lever

Why it works

- **Maximum credibility**: no adjective you could write is as damning as the target's own prior statement. - **No rebuttal path**: management can't argue they didn't say it. - **It forces accountability onto a person**, not an institution — even if you aren't explicitly naming a villain elsewhere. - **Reporters amplify it**. A CEO-quote-contradiction slide is quotable, which means it lands in WSJ/FT/Bloomberg coverage.