Sh!t Happens

“Sh!t Happens” – Carl Wertherman in 1964

Also copied by Forest Gump, this quote sums up our uneasy relationship with an uncertain future. . . 

Put another way… “How To Be Less Afraid of an Uncertain Future“.

Today I wanted to focus on a subject which is often passed over. Either because it induces fear of the future, or more often because frankly, it’s dull. Or more accurately dull, dull, DULL! (and vital).

Because when “Sh!t Happens”, we should have a plan for when Lady (bad) Luck visits our carefully thought out strategic plan. 

Risk Assessment 

So when was the last time you planned something for your business that went exactly as expected? Rarely?…. and remember the main thing we plan for are our competitive and growth strategies.

Did we all have formal measures in place to deal with the unexpected Covid crisis? For even our large companies, who are required to formally assess and plan for risk, it’s often merely a tick-box exercise.

However, it does not have to be difficult or dull, and should involve the opinions of your whole senior team. As a consequence, a useful side effect in the process is the insight you will gain into the level of alignment that exists within your management teams, as it is critical to ensure any strategy has “cascaded” through the management team, and stress testing that strategy between them will reveal that. This Risk Assessment inevitably produces a long list of, err….risks, and many more than our finite resources can possibly monitor. So using a “Risk Register” like the following) to score and prioritise risks, and most importantly record the Mitigation, is really helpful. 

It is important to be clear what your scoring scales mean. Again, this can be developed and made more specific to your business and sector.

I am often asked, “What risks should I assess?” It can help to reflect on three areas in turn as you start to identify potential risks. Planning – Internal – External. 

Planning Risks – What were the assumptions that you have made in your plan? What would happen if these were incorrect? How have previous assumptions turned out? Do you have good KPIs to track actual delivery? And even more importantly, how do you learn from current performance to use in future planning?

Internal Risks – What are the factors within your own business what could have a negative impact on you? What are the risks brought about by your business structure, systems, operations and processes? (Using Strengths and Weaknesses in SWOT is helpful).

External Risks – Revisit your Five Forces from article four (using opportunities and threats in SWOT is also helpful).

So did company risk assessments predict the impact of Covid-19?…of course not. However, those who had planned in this way completed a “Business Continuity Plan”  within them, and they have fared massively better than those who didn’t…

Business Continuity Planning 

There are some risks that we cannot Mitigate against. So we are left with one option – be ready for when it happens, and carve out any additional benefits inherent in the planning. This is contingency or “Business Continuity Planning”. Essentially here we take any risks that we think are significant and likely, then work out in advance what we will do. 

By example, in mitigating the risks of snow days and rail strikes, companies made provisions for home working to avoid lost productivity. The additional benefits were improved communications, greater work-life balance, and a feeling of trust by the team from their leaders. Also, they didn’t predict Covid-19, however when lockdown emerged, for many this same planning provided seamless continuity in productivity.

Wrap Up 

It’s easy to ignore the need for a Risk Assessment, and hard to make time for Contingency Planning, though it’s at the expense of the resilient business. However done properly, they can change challenges into profitable opportunities as your competitors scramble around trying to respond in a crisis. During which time you enact and refine your predetermined business continuity plan and gain an advantage over your rivals. . . 

Other Articles in our Rescue, Recovery, Reinvent Series:-

Article 1 – Businesses That Plan Do Better

Article 2 – Business Strategy, Why Bother?

Article 3 – The Importance of Purpose, Vision and Values 

Article 4 – How to Predict the Unpredictable