Jan Richards

Let's Make Your Business Work Better

Categories

resilience

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

by 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

How to simplify in the extreme

by Leave a Comment

Sometimes you’re thrown into a situation that makes a mess of your well-laid plans.

And sometimes you’re suddenly in a chaotic situation that’s one hundred times more complicated than that.

Just one current example? You know where this story is going…

It’s the COVID-19 pandemic experience we share.

In chaotic times what do you do to simplify the chaos?

And not just simplify, but simplify in the extreme?

Try one or more of these four steps:

1. Focus on one priority. 

Yes, just ONE.

When you’re trying to right a world that has turned upside down, you don’t need the drag and drama of trying to juggle multiple goals.

Like a laser beam, narrow your focus to a single point. Make that your sole priority for now.

2. Let go. Say no.

The only way you’re going to let go is to say no.

And if that’s not easy for you, well, frankly, that’s tough.

You need to be able to clear out the underbrush. You have to let go of what is extraneous for now.

What was once important may be again someday.

Now, it it not.

Practice the word, “No,” until you can say it with the calm confidence you need to back it up. And then live your fully-owned “no.”

3. Pay attention.

You need information that’s easy to gather and use in order to know if you’re getting back on track, and staying there.

Select a few key indicators you can count on.

Then pay attention to the information it is providing you.

Use it simply, consistently.

4. Follow up.

Take the time to see how things are working, and if they could work better.

And if things aren’t working, face the facts.

If you need to adjust your plans and actions, do it.

Your work and the world will right itself, with time, but in the meantime, it needs your help.

The best way to start?

Simplify, in the extreme.

 

Here’s another post you may be interested in:

How to lead successfully through uncertainty

Strategic planning: Mine your imagination with scenario planning

by Leave a Comment

Have you ever been blindsided, whether by difficult circumstances or by opportunity?

Many people around the world would answer “Yes!” to that question, given recent events, who might previously have said, “Hmmm, let me try to think of an example…”

Consider a big surprise in your career or personal life, whether positive or negative.

If you had anticipated and been ready for it, would that have affected the decisions or actions you took when the surprise occurred?

Be better prepared the next time changes are sharp and sudden.

Scenario analysis, a simple planning tool, can help you.

It may sound complicated, but it’s not.

In its simplest possible form, scenario analysis is a brainstorming tool.

It works because it loosens your grip on the future you expect.

It opens your eyes to many possible futures, and helps you prepare for seemingly far-fetched circumstances that can, in fact, become real.

The process of building scenarios increases the quality of your planning, and improves your responsiveness.

It helps your team consider, and work through many different possibilities. It also heightens awareness of cues and data you can monitor to anticipate, notice important changes that are occurring, and then to be prepared for whatever happens.

As you envision each scenario, you’re essentially beginning to rehearse how you’d handle each circumstance.

Here’s a simple approach to use scenario planning:

Prepare

1. Define the problem.

What’s your challenge, in one sentence?

2. List the primary forces that could drive change in the situation.

For example, is availability of qualified employees critical to your team or company?

Are economic trends, regulatory issues, industry or technology trends important to you – or could they be?

What other major forces must you monitor and be ready to respond to quickly, and well, as changes occur in each of them?

3. Create a matrix.

You’ll need at least six columns. You’ll also need enough rows for each of the primary forces you identified that could drive significant change in this situation.

In the first column, list each of the primary forces, one per row, that you identified.

Across the top of the matrix, write these column headers: “Even better case,” “Best case,” “Most likely case,” “Worst case,” “Even worse case” in columns two through six.

Be there

4. Imagine, one by one, that you’re in the middle of three different scenarios,  “Best case,” “Most likely case,” and “Worst case.”

As you consider each scenario, write a few details in the appropriate boxes for what you expect would be happening with each driving force in that circumstance.

For example, let’s say you’re planning for rapid growth at your company. One force you would need to consider in that case is the availability of qualified candidates for jobs at your company.

Let’s say, then, that you anticipate the best case is that there will always be as many highly-qualified candidates as you need.

As a worst case, perhaps you fear that major demographic changes could reduce or even eliminate future job candidates for the jobs you anticipate having available.

And as a most likely case, perhaps you think there will be little change in the number, and quality, of job candidates available to you.

5. Stretch even further.

Now, having considered the “Best case,” “Most likely case,” and “Worst case,” expand your thinking.

What circumstance would be EVEN BETTER than what you imagined for each driving force?

And what would be EVEN WORSE than what you already dared to picture?

Working through these extreme outcomes inevitably leads you to new insights. Many companies find that creating these stress scenarios…both good and bad…accelerate and improve their preparation, teamwork, trust, and resilience.

6. Build the most likely scenario.

Having considered the extreme examples, what now seems to be the most likely scenario?

Is it the same “Most likely” scenario you originally envisioned?

The odds are very high that, having stretched your thinking, you see some new areas of caution and, also, opportunity.

And that the “Most likely” scenario now looks different.

Save and compare

By this point, you may have accomplished as much as you want to with this simple version of scenario analysis.

You can do further work, if desired, such as by gathering data and doing detailed analysis to help you understand which scenario you envision is most likely…or if there are forces, or scenarios you also need to consider.

7. Save your work.

Whether you’re ready to complete the scenario analysis, or you’re doing more research, save the work you’ve done for later use.

8. Express key scenarios in a way that makes them easy to use.

You can capture the scenarios in some way that makes them easy to use and refer to in the future, such as through simple graphics or drawings. You can select a metaphor, or write a phrase that expresses the anticipated circumstance succinctly.

9. Later, when time has passed and change has occurred, compare what actually happened with the scenarios you imagined…and what you thought might happen.

You might be surprised at the quality of the crystal ball you create with this simple exercise, and how well-prepared you are, as a result, for what actually occurs.

Considering many different possibilities prepares you to some degree to be ready for them…and makes you more attentive to the key forces that may be constantly changing.

One client, an investment management firm, discovered after we used scenario planning there, that they were far better prepared for volatile financial markets than some of their competitors were.

However you plan and prepare for the future, rest assured that it won’t be a simple extension of the past.

Scenario analysis can help you be much better prepared for the future, and more resilient.

How to lead successfully through uncertainty

by Leave a Comment

“I think we’re lost. Yeah, we’re lost. I KNOW we’re lost!”

Does that sound like the worried buzz at the company where you once worked – or the one where you work now?

Did the path forward once seem SO clear, so destined to be successful during the cool logic of business or project planning?

And now, does that plan seem to be pure fiction, or a dream, perhaps?

These “we’re lost” quotes were not from an employee sometime, somewhere.

These were the fears of our then-12-year-old son, Matt, as his 20-year-old sister, Anne, tried to lead us back to our hotel in Paris when we were trying to find our way to home base on the last night of a family trip there.

Anne was our leader in this case because she was, effectively, the only French-speaking member of the family.

She’d been nervous about taking on the communications and navigation leadership role at the beginning of the French portion of this family trip. She grew into the role beautifully, though.

Her skills were really being tested this final evening. And she did get us safely back to the hotel, despite the doubts of some of her followers.

What worked in this situation can help you, too, to succeed when you must adapt best-made plans quickly in order to lead successfully through uncertainty.

Try these approaches to help you be successful:

Make yourself easy to follow

Be clear about your vision, plan and directions. Use simple language and descriptions that everyone can understand. Speak in specific, concrete terms. Help your team understand what’s different in this situation from the original plan.

Be clear about your assumptions

We all know stories about teams that made incorrect assumptions in planning and then never adjusted them, despite the facts. In many of these cases great difficulties, even tragedies, occurred which might have been prevented. Be attentive to whether your assumptions are solid…or need to be revised…as you play your plan. Use good data. Know what it’s telling you. Adjust both your plan and actions if facts make it clear you must.

Trust your instincts, but check the facts

One of the primary strengths of the way Anne led us back to the hotel that evening was that she started with a vision of success that held up in spite of the nervousness around her. She also paid close attention to her intuition, combined with the facts and feedback she could gather from the team (her family, in this case) and the environment. Finally, she held it all together with a healthy spirit of adventure that made the team successful, and the experience memorable, in a positive way.

Show confidence, courage

This is often a major key to tipping the balance of a team’s focus from fear and anticipation of failure – particularly when plans must change rapidly – to confidence and conviction. Armed with a vision, a revised or flexible plan, and guided by facts gathered along the way, you and your team can move with assurance in whatever circumstances you find.

Make simple agreements – and keep them

Agree with your team on the milestones at which you’ll check your progress, and the data or metrics you’ll use to evaluate whether you’re on- or off-course. Then keep those agreements. You’ll build a strong experience of being a team – and improve your outcome – as you face uncertainty together.

Keep communication flowing

Success requires strength, confidence and everyone’s willingness to stay fully involved. Keep lines of communication open, free-flowing. As a team leader, be clear about how you’ll make decisions. Ask for information or feedback you need. Listen fully. Acknowledge, sort, synthesize and incorporate essential information you receive (if you don’t, people may stop bringing it to you). Keep communication moving. It can be the difference between success and failure.

Follow through

This one can’t be said enough. Confidence grows when teams see a growing trail of small victories, one success leading to another. Follow up. Follow through. Complete each task and keep moving.

Encourage others

If you’re discouraged in the unexpected situation in which you find yourself, others on your team are probably even more so. They’re watching you very, very closely, and your mood shows more than you know. As the leader, it’s your job to get the group successfully and safely to their destination, despite the circumstances you find yourselves in. Your job will be easier if you help to lighten the team’s load, even by letting them know that you see how much they’re carrying. Show appreciation for their efforts and their flexibility.

When you’re right, no gloating, no showboating

Finally, congratulate and thank each member of the team, whatever role they played in the team’s success. Remember – you got to your final destination together, not alone.

Resilience: The difference maker when pressure is on

by Leave a Comment

What’s the key to turning high potential into high performance and results when the heat and pressure are highest?

It’s resilience, and it’s one of the top ten characteristics of great leaders.

Consider how resilience has played a significant part in your life and career.

First, think about the stark contrast in how high pressure situations might have worked out compared to how they did when you were resilient.

On the one hand, you can have:

  • Success
  • Innovation
  • Responsiveness
  • Resilience
  • Influencing and inspiring others in a way that brings out the best in a full team

Now contrast that with these possibilities:

  • Failure
  • Freezing in place
  • Rigidity, inflexibility
  • Fully flourishing fear
  • Expecting the worst and bringing it out in yourself and others

Which experience do you want?

(I won’t wait for your answer. I’m pretty sure I know what it is)

Resilience is the ability to perform at your best. When you’re resilient you’re highly responsive to the situation you actually have rather than the situation you assumed you would experience.

Resilience is most likely, and most effective when you’ve done the learning, preparation and practice required to make great performance and results a realistic possibility in whatever circumstance you encounter.

There are many other examples we could use. Let’s consider one memorable experience from the 2012 Olympics in London.

This example of “Get out of your own way to let your best performance through” occurred in the men’s 10-meter platform diving competition.

First, U.S. diver David Boudia barely made it out of the qualifying rounds.

His early performance earned him the 18th and final spot in the medal round.

Next, the slate was wiped clean of prior scores. Competitors started fresh in the final stretch of the medal round.

Finally, when the pressure was highest, Boudia produced a series of nearly-perfect dives, besting the seemingly unflappable, unbeatable Chinese divers in that particular competition.

The Chinese competitors seemed unable to understand, accept and adapt to having their assumed supremacy (and their expected gold and silver medals) challenged in the final round.

So when they, and other competitors, could not adjust to Boudia’s barrage of near-perfection, they lost the gold medal to him…the man who had almost missed the medal round.

This getting out of your own way business sounds simple enough, right?

But for most people and teams, it’s not.

Why? These are the primary reasons:

1. Fear

This can be a fear of failure, or a fear of success. Or it can be a fear of both.

Either way, fear can be immobilizing.

2. Bad habits or a poor process

Whether because of bad habits or a bad design or implementation, inefficient and unfocused ways of getting things done stack the odds of success against you.

3. Disabling and limit-setting beliefs

You or your team may WANT success.

You may diligently WORK TOWARD success.

But if you don’t BELIEVE you can produce and maintain success, or don’t feel that you “deserve” it, you’re far less likely to achieve it.

It’s like trying to run a race with a 100 lb. weight strapped to your back. That weight…actual or imagined…is a burden your competitors may not be carrying.

4. Expectations that turn out to be wrong

You can plan and prepare for a circumstance that does not come to pass.

And when the situation is different from what you expect, you may not be able to see it, accept it, and adapt rapidly, or enough.

If fear, bad habits, disabling beliefs and incorrect expectations are some of the causes, what are some of the cures for the problem?

  • Benchmark and learn from the best.
  • Observe others in competition. See how they handle the pressure when the pressure’s highest.
  • Get a mentor. Learn from someone who has been where you’re going.
  • Plan for and practice in all sorts of circumstances…best and worst…to build resilience, muscle-memory and relative fearlessness in your ability to handle many types of situations.

When the pressure is on, your ability to read a situation quickly and accurately, then to choose the right moves, take them, and ultimately succeed in unexpected situations may be one of your most important success skills of all.

Get out of your own way.

Let your best, and the best of your team, come through clearly and completely.

Don’t trap or bury your talent.

Tap it.

Turn your full potential into full success.