Practice Crisis Anticipation

In business consulting, we teach a way of thinking called "crisis anticipation." I encourage decision makers to look six months to a year into the future and ask the question, "What are some of the negative things that could happen that would derail our plans? Of all of them, what are the very worst things that could happen?"

We then make a list of all the different setbacks or unexpected emergencies that could occur that would threaten the enterprise. For example: A competitor could come out with a new product or service that was better and/or cheaper than ours. Interest rates could go up. Government could place new taxes and regulations on our activities. Costs of fuel or raw materials could increase. A key person or persons within the organization could depart for some reason. A key customer or customers could leave and go to a competitor. Competitors could cut their prices below costs in order to take business away. The economy could tip into recession and the overall market could shrink dramatically.

In each of these cases, the ability of the company to respond quickly and effectively could determine its very survival. These possible reversals and setbacks should be thought through in advance. The best rule is "no surprises!"

Royal Dutch/Shell of the Netherlands has one of the most complete forward planning processes of any company in the world. It has developed over 600 scenarios to deal with problems that might occur around the world in areas where it has oil and gas op erations. As a result, the company is seldom surprised by anything that happens. It is never caught off guard. It always has a backup plan ready to go. It has also become one of the most continuously profitable and successful companies in the world. Thinking ahead really pays off.

Business Brain

Business Brain

Among the hardest transitions for individuals is to move from the employee to the entrepreneur mentality. The idea of getting on your own, getting your own business is fantastic. It's the desire of a lot of individuals to leave their jobs and get to be successful business owners.

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