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decision-making

How to create an “edge of cliff” scenario analysis to prevent big problems from occurring

June 2, 2019 by Jan Leave a Comment

“I’m afraid of what I don’t know,” the CEO of the rapidly growing company said to me as I advised him one day.

“And I’m afraid of what I can’t see.”

He feared dire circumstances could occur and wipe out his thriving company.

This CEO was worried enough that he longed for a good early warning system he could use…if there were a way to create one.

I created an early warning system for him, one we ended up calling the “edge of cliff analysis” because it addressed his key fears for his company…and a few others he had not thought about.

It was a tool he and the company reached for, and used, for years afterwards.

To create the “edge of cliff analysis,” and to make sure it worked well for them, I worked with a wide range of people at the company to understand serious and unexpressed fears they had for their company.

It was like uncovering and understanding a high-risk puzzle, and then providing an action-oriented dashboard to guide them.

It helped them prioritize improvements that would reduce the most likely risks to the company, while providing them significant measures, and the ability to use them well, in order to help them know if problems were starting to emerge.

And then we made sure the decision-making and prioritization framework is one that people inside the company could and would use. (And they continued to reach for and use it, I heard through the grapevine, for years afterwards).

Do you, too, long for a sense of command in otherwise challenging and unpredictable circumstances?

Do you ever wish for an early warning system such as this CEO did?

If so, here are the basic steps we used to create this rapidly growing company’s early warning system:

– Start with your fears

We called this the “edge of cliff” analysis, and started with the CEO’s greatest fears.

He had lived with heavy but ambiguous worry for some time.

He hadn’t yet articulated his fears clearly, and this step alone, of articulating his worries, helped turn them into something actionable, and something positive.

– Turn them into scenarios

We considered his worst-case scenarios and the probable consequences of each for his clients and company.

We also considered best-case scenarios (they are so much more fun to think about…and we needed those, too, for a bit of relief in this work).

And then we considered what would happen if the best scenarios turned out, in real life, to be even better than we dreamt. We also considered situations where something far, far worse than the worst that he feared happened.

This stretched our sense of what the early warning system needed to accommodate, and to flag for preventative, or adaptive action.

–  Make your early warning system goal clear

Identify what you want your early warning system to do for you.

Next, consider who will use the information, and what they will hopefully do with it.

Check in with the future users of the information to see what they need in order to make the information easy for them to use to identify and take the right actions.

– Gather external information

In this client project, I had to find a proxy for customer satisfaction and frustrations, in lieu of talking directly to their customers.

I looked to see what promises the company made, or implied, to their customers through their marketing and advertising materials.

This told me what processes inside the company had to work flawlessly, under all different circumstances, no matter what was happening outside the company.

– Synthesize

Working with the leadership team, I verified and clarified which processes had to be top-notch in order for them to continue to thrive.

We mapped this to the most likely scenarios they might face, and identified which processes put them at highest risk, if they were not strengthened and improved.

– Organize and communicate

We organized and simplified the work, making it easy to understand and use.

We had no interest in creating a system that just looked good on paper. We wanted one that would be successful in real life and real business.

Next, we trained people, helping them see what valuable part they played in making the early warning system work successfully, and do what it was intended to do to keep the company safe and thriving.

The early warning system turned out to be a combination of crystal ball, fire drill, and strategic change management system all rolled into one.

If you’d like more information about how to do a scenario analysis, or how to do an “edge of cliff” analysis for your business, let me know.

 

Here’s another post you may be interested in:

You place your bets when you set strategy

Filed Under: Change management, Leadership, Process design and management, Vision and strategy Tagged With: decision-making, Managing risk, process improvement, resilience, scenario analysis

Four decision making mistakes to avoid

November 15, 2016 by Jan Leave a Comment

Being able to make good decisions, at all levels of your organization, is vital to your company’s success.

It’s also vital to your professional and personal success, no matter who you are or what you do.

Decision making skill, one of the top ten characteristics of great leaders, is more difficult than many people realize.

Consider this thought:

“Some problems are so complex that you have to be…well-informed just to be undecided about them.”

Laurence J. Peter

Great decisions can have deep, lasting and positive effects on many people.

Think about the far-reaching impact of these three decisions:

  • Columbus’ decision to seek the New World
  • John F. Kennedy’s decision that the US would land a man on the moon, and do so before the decade was out
  • Rosa Parks’ decision not to give up her seat on the bus one day in Montgomery, Alabama

Poor decision quality is equally powerful, but in undesirable ways. It can have devastating effects on people, organizations, and even entire countries.

Here’s just one example (and there are many, including many current examples):

Think about the impact on US and world financial markets of a few false assumptions about market risk and how to best manage it in 2008 (and in the years leading up to it). In addition, what was deemed adequate oversight of financial institutions turned out not to be.

It all added up to very big, very bad, very sudden surprises for many people and institutions, with long-term repercussions.

What are some of the primary problems?

Here are just a few:

1. Being unable to decide without a lot of information.

And then, being unable to swim one’s way through the sea of data, information and opinions to reach a valid, effective and timely decision.

2. Being decisive – but too much so.

Decision-makers may reach conclusions quickly, based on too little information, or inaccurate, deceptive, or untimely information.

3. Simplifying information so much that it’s stripped of significance.

Data and information may be overly simplified – or it may be unwieldy.

Either way, it may be difficult to synthesize information, or to understand the deeper meaning the data could have provided. In addition, it may not be possible to draw meaningful conclusions with information stripped of significant detail.

4. Disowning one’s decisions.

This can occur if a leader fears the pushback that naturally happens at some point in almost every change or transition process, and then overreacts to it.

We’ve touched on significant ways that decisions can go wrong.

How can decision making go right?

First, great leaders ensure that they have the reliable, accurate, timely information that they need.

And they make sure that their process for making decisions is effective and continually improved, as needed.

These are characteristics of good decisions:

  • Timely
  • Well-informed
  • Take into account the needs and desires of the various people who will be most affected by the outcomes
  • Prioritize and use criteria that will yield a good result

Decision making comes easily to some people, but for others, it is a continuing challenge.

These skills can be learned and improved, with focus and practice. And they are absolutely, positively essential for leadership excellence. 

Filed Under: Change management, Leadership Tagged With: decision-making, decisive, leadership excellence, leadership skills

What do you do about a goal you forgot…or have been resisting?

March 15, 2016 by Jan Leave a Comment

Are you finding, as you build momentum in this new year, that there is a goal you “forgot”?

It can happen.

It may be a goal that:

– You hoped you could, and others would, forget about.

– Was something you never wanted to do, but knew you needed to.

– Was buried, day by day, as more immediate issues got in the way.

If there’s a goal like this for you as we move farther into 2022:

1. Decide if this forgotten goal is something you still want to achieve.

Sometimes there’s a goal we hope to get to, but it’s big enough that we just don’t grasp quite how to begin to tackle it, much less know how to completely meet it.

At other times, the forgotten goal may be one you once had, but have now outgrown or, for other reasons, no longer hold.

2. If this is a goal you still want, get excited about it again.

Maybe there are great benefits to getting this work done which you haven’t focused on fully yet.

Take some time to imagine you’ve achieved the goal. Experience that feeling of victory in its full glory…all the sights, sounds, and elation.

Also imagine the process of getting there. See yourself rising above each challenge that may crop up along the path.

3. Accept it if this is something you have to achieve, whether you want to or not.

This may be a “should” or “must” that you still have to carry forward.

If so, accept it (easy to say, but hard to do…I know that from experience). And get moving.

There is a lot of power in acceptance. The energy you’ve spent running away can be used in far better ways. You may, and probably will, find that you’ve met your goal far more quickly than you expected, once you’ve buckled down and gotten the work done.

Suddenly, the goal will be met, and the burden will have been lifted, as well.

4. Increase your dissatisfaction with the status quo.

This is the opposite of getting excited about a goal you still want to achieve.

To get to the point of action, sometimes we have to wait until we’re really ready to let go of the past. And, well, sometimes that takes a lot of unhappiness with the status quo. We have to be far more ready to go than to stay in the situation we currently find ourselves in.

How can you increase your dissatisfaction with your current situation, making you less willing to tolerate the status quo?

5. Take your big goal and turn it into a series of smaller, more accessible and achievable goals.

Put those smaller goals on your calendar and work to achieve each of those, one by one.

You’ll create a steady stream of achievements, which has far more benefits than you might realize now.

Filed Under: Change management Tagged With: action-oriented, adapting to change, change, decision-making, focus, get out of your own way, leadership skills, resilience

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