Have you ever lived in a decade when so many experts get so much so wrong? I don’t know if we have more information at our fingertips that exposes the absurdity of many experts or if we have just dumbed down the term “expert.”
Despite this trend, your company’s plans must be tied to some kind of knowledgeable forecast of the business and operating environment. What if those forecasts and assumptions are wrong? Do you have a contingency plan?
The first step in contingency planning is to be well informed.
Since the first of the year, I’ve heard a lot of people say they’ve quit watching the news. Hey, I get it; it’s really depressing when you hear news you don’t like. However, smart people aren’t scared to hear both the good news and the bad news, and they get their news from more than one source. Listening to the other side keeps you honest.
Your company’s expert in contingency planning had better be you. Don’t turn off the bad news—choke it down and understand it.
As you look for useful advice, listen to consultants who understand your specific business. I am not a buyer of the belief that business is business. Selling groceries is totally different from selling building materials. Consultants who preach from the we-are-all-the-same pulpit just want to get paid.
Be very careful of the company or industry sycophant who offers you plenty of praise but little honesty. There are plenty of yes people out there, but a great company leader looks for honesty and accountability. Join groups, find mentors, and hire people who understand our industry—not some reciter of a 20-year-old outdated business seminar.
Next, anticipate market and business scenarios that may affect your business within the next 12 to 24 months.
What happens if there is another economic and stock meltdown within the next six months? Are you prepared? Some of you would say, “This isn’t going to happen,” but a lot of Wall Street experts are predicting a huge correction; history from the last meltdown demonstrates that it can happen despite conventional wisdom. Companies must have their financial instruments in order, with provisions that can’t be called by a panicking banker.
Threats and business challenges can quickly come out of nowhere. It’s your job to anticipate them. Natural disaster, political upheaval, terrorism, and even war are being discussed daily in the news. Ignoring the noise is any leader’s choice, but history is full of failures who refused to acknowledge the risks.
Many executives have their canned in-case plans that no one can find when a real problem arises. Those plans are often copies of templates or are so outdated that they reference procedures and technologies that are no longer in place. Executives should develop real contingency plans that are meaningful for their businesses today. Most companies that prepared and planned properly in 2005 survived the Great Recession of 2008. Those that didn’t have long since been forgotten.
You can’t plan for every unfortunate event, but you can plan for the two or three events that could force your company into bankruptcy. Nobody wants to waste time making contingency plans for scenarios that we hope do not happen, but we live in an uncertain world.
You may not want to consider the negative what-ifs, but bad things have happened before and they will happen again. It is your job to be prepared.
