Industry Health Signal Tables

Industry Health Signal Tables#

Overview#

This file replaces the former Valuation Translation Pipeline. Instead of calculating margin impacts, multiple shifts, and basis-point portfolio returns, facilitators use a simple score-to-condition mapping to give participants tangible feedback on their industry's structural health.

Key concept: Cumulative aggregate score → Industry Condition → Mechanical consequence for next round.

Key Changes (V7.4 IC Redesign):

Valuation translation pipeline eliminated (no margin impact, multiple impact, probability of success, or portfolio impact calculations)
Replaced with 5 Industry Condition bands based on cumulative aggregate score
Conditions carry mechanical consequences that affect participant decisions
Historical reference data consolidated in 07_Supporting_Materials/07_Historical_Reference_Data.md

Industry Condition Bands#

Conditions are based on cumulative aggregate score (sum of all round scores to date for that industry). This creates momentum: good early decisions build advantage; poor early decisions compound into real trouble.

Facilitator announces conditions at the start of each round (starting Round 2). Takes ~2 minutes. No calculation required — just look at the running score total.

Cumulative Score	Condition	Facilitator Announcement	Mechanical Consequence
+15 or higher	Surge	"Your industry is structurally advantaged. Margins expanding, multiple lifting. Investors are overweight. You have room to be ambitious."	Participant may attempt one Transformational-band decision without triggering automatic red-flag review. (Still scored normally on all 3 dimensions — just no automatic challenge on the Transformational band.)
+6 to +14	Tailwind	"Your industry is navigating well. Margins stable-to-improving. Market views you favorably."	No modifier. Business as usual.
-5 to +5	Steady	"Your industry is holding position. No clear momentum. Market is neutral."	No modifier.
-6 to -14	Headwind	"Your industry is under structural pressure. Margins compressing. Investors cautious. You need to stabilize before you can grow."	Facilitator imposes one constraint from the constraint menu at start of next round. Participant must address it before submitting primary decision.
-15 or worse	Crisis	"Your industry faces structural decline. EBITDA collapsing, multiple in freefall. Talent and capital fleeing. Survival mode."	Two constraints imposed. Primary decision must include a defensive or restructuring component — pure growth plays score automatic -2 Strategic Fit.

When a Headwind or Crisis condition triggers a constraint, the facilitator selects from this menu:

Regulatory Halt: Government regulators have announced a review of AI deployments in your industry. All new AI projects are effectively frozen for this round — you cannot launch new pilots, expand existing deployments to new sites, or go live with tools that are still in testing. Decision impact: Your strategy this round must work within your current AI footprint. You can optimize what's already deployed, invest in workforce development, or reposition strategically — but you cannot expand your AI capability set.
Labor Cost Surge: Union negotiations, wage competition, or mandatory retraining obligations have driven your labor costs sharply higher. The increase is material enough to compress margins and force trade-offs elsewhere in your budget. Decision impact: Any strategy that depends on labor-intensive rollout (retraining programs, change management, multi-site deployment teams) now costs significantly more. You may need to narrow the scope of your plans, slow your rollout timeline, or find ways to offset the cost pressure — but you cannot ignore it.
Capital Tightening: Market volatility, credit conditions, or investor skepticism have significantly reduced your available capital for this round. Your board has pulled back discretionary spending authorization. Decision impact: You cannot pursue capital-intensive strategies at the scale you might otherwise choose. Large infrastructure investments, acquisitions, and multi-site expansions are constrained. Your strategy must either be capital-light or demonstrate why a smaller, more focused investment is the right use of limited funds.
Reputational Pressure: Public backlash — whether from workforce displacement concerns, algorithmic fairness controversies, or customer trust erosion — has forced your industry into a defensive posture. Stakeholders expect visible action on responsible AI practices. Decision impact: Your strategy this round must credibly address the reputational concern. Aggressive AI expansion without a visible "responsible transition" component will be scored harshly. You may need to slow deployment, invest in workforce support, or reframe your narrative — but ignoring the backlash is not a viable option.
Competitive Response: A major competitor has used AI to aggressively undercut your pricing, poach your customers, or leapfrog your product capability. The competitive threat is immediate and material. Decision impact: Your strategy must account for active competitive pressure. Purely internal-facing or long-horizon strategies that don't address the near-term market share threat are risky. You may need to defend your position through pricing, product differentiation, partnerships, or accelerated deployment — but you cannot plan as if the competitive landscape is stable.
Litigation Risk: Your industry faces active or imminent litigation related to AI deployment — algorithmic bias claims, labor displacement lawsuits, intellectual property disputes, or product liability actions. Legal exposure is material and uncertain. Decision impact: Any strategy that expands your litigation surface area (aggressive automation, opaque algorithmic decision-making, rapid workforce reduction) carries additional risk this round. You may need to slow certain deployments, invest in governance and compliance infrastructure, or choose lower-risk AI applications — but the legal overhang must be reflected in your reasoning.

Selection guidance for facilitators:

For Headwind: Choose the constraint most narratively appropriate to the industry's situation and recent decisions. Aim for pressure that creates an interesting decision, not punishment.
For Crisis: Choose two constraints. One should address the primary failure mode; the other should reflect market consequences (e.g., Capital Tightening + Competitive Response).

How to Use Industry Health Signals#

End-of-Round Procedure (Replaces Former Valuation Translation)#

Score all explicit industry decisions using banded scoring ({-2, 0, +2} per dimension, +/-3 if red-flag).
Apply base case fallbacks for industries without explicit decisions (reference Base Case Fallback Bank).
Update cumulative score for each industry (running total across all rounds).
Determine Industry Condition by looking up cumulative score in the table above.
Announce conditions at start of next round (takes ~2 minutes).
Apply constraints for any industry in Headwind or Crisis before decision preparation begins.

Tracking Template#

Use a simple flip chart or spreadsheet:

Industry	R1 Score	R2 Score	R3 Score	R4 Score	Cumulative	Condition
Retail	___	___	___	___	___	___
CPG	___	___	___	___	___	___
Healthcare Provider	___	___	___	___	___	___
Healthcare Payer	___	___	___	___	___	___
Finance	___	___	___	___	___	___
Consulting	___	___	___	___	___	___
Law	___	___	___	___	___	___
Manufacturing	___	___	___	___	___	___
Logistics	___	___	___	___	___	___
Big Tech	___	___	___	___	___	___
B2B/B2C SaaS	___	___	___	___	___	___

Condition Dynamics Across Rounds#

Typical Trajectories#

Strong performer: R1 +4, R2 +5 → Cumulative +9 (Tailwind). R3 +4 → Cumulative +13 (Tailwind). R4 +3 → Cumulative +16 (Surge). Participant earns freedom to attempt bold moves.
Average performer: R1 +2, R2 +1 → Cumulative +3 (Steady). R3 +2 → Cumulative +5 (Steady). R4 +1 → Cumulative +6 (Tailwind). Gradual positive momentum.
Struggling performer: R1 -2, R2 -3 → Cumulative -5 (Steady). R3 -2 → Cumulative -7 (Headwind). Constraint imposed in R4.
Crisis trajectory: R1 -4, R2 -5 → Cumulative -9 (Headwind). Constraint in R3. R3 -4 → Cumulative -13 (Headwind). More constraints in R4. R4 -3 → Cumulative -16 (Crisis). Sustained poor decisions required to reach Crisis.

Design Intent#

Momentum matters. Cumulative scoring mirrors real-world dynamics: industries that make consistently poor decisions face compounding consequences.
Recovery is possible. A strong round can pull an industry out of Headwind (+5 or +6 in a single round). Crisis recovery is harder but not impossible.
Consequences are mechanical, not just narrative. Constraints physically restrict what decisions participants can make. This is the "compressed multiple" effect — expressed as reduced freedom of action rather than financial calculations.
Surge is earned. Hitting +15 cumulative requires sustained excellence across most of the exercise. The reward (bypassing automatic red-flag challenge) is meaningful but balanced.

Historical Reference Data: All historical market data (industry EV/EBITDA and P/E multiples, S&P 500 sector returns, forward P/E multiples, Treasury yields) is consolidated in 07_Supporting_Materials/07_Historical_Reference_Data.md.

End of Industry Health Signal Tables — V7.4