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These are unprecedented times for us all as we encounter new obstacles in various aspects of our lives on a daily basis.
This pandemic will, undoubtedly, linger as a disruptive factor for a prolonged amount of time, similar to the aftermath of 9-11 and the financial crisis in 2008. It will certainly affect financial models, small businesses, and E-Commerce to name a few. Many of the entrepreneurs I work with are already facing challenges regarding credit, forecasting, and customer relations. In particular, they need new assessments of the financial and business consequences they are experiencing. How can you prepare?
So, how will we respond, recover, and prepare for the fallout of what is happening?
When developing or executing strategies and programs, we’re constantly presented with a choice between a) rules, repetition, and stability and b) flexibility and support. It’s becoming increasingly clear that it could benefit us all to incorporate more flexibility and support in both our preparation and response. I advocate taking a more balanced and reality-based approach to issues rather than simply following unproven ideas, intuition, or trends.
Here are some recommendations on how can you prepare:
Develop, test, measure, and adapt.
Focus on facts and solutions rather than personalities, partisanship, and biases. This involves both managing the decision process and the perceptions being created.
Many plans, forecasts, and proposals are done in a static format, with one-dimensional analysis and results. Often, they are flawed, because we live in a more dynamic and interactive world. Understanding “cause and effect” can have dramatic advantages. Businesses need to have alternatives at the ready and processes in place to adapt. Mistakes will occur, but remember: Thomas Edison tested thousands of light bulbs before succeeding.
Be aware of risk and don’t be afraid to take more.
On one hand, you must understand probability, experience, and history. On the other, you must decide when to be a contrarian and try outlying solutions. This is especially true in situations (like the corona virus) that constantly change and repeatedly provide a number of new challenges.
Place more attention on the process of decision-making by asking: How accurate is our information? How can you prepare? What are the consequences of potential mistakes? How much risk can we afford? I believe (with the exception of safety issues) that we can all afford more risk. Generally, we’re overly concerned with the consequences of mistakes rather than the potential upside of risk.
Beware of bias.
We all want to believe that our ideas are terrific and, thus, focus more on their potential for success. However, the obstacles associated with our ideas are often given less attention. This is just human nature. We bias our analysis toward successes and tend to ignore negatives. Using wrong data, misreading data, and incorrect analysis of data are common causes of bias. For example, most forecasts are based on history. The forecasts for next April and May will require significant adjustments to account for the significant virus events impacting this year.
Be open, flexible, and adaptive.
When hierarchy governs organizations, progress is limited. We need to create more flat organizations with increased collaboration. I suggest identifying the exceptional, gifted, and top performers, and then creating special opportunities for them. Gifted titans like Jobs, Gates, or Bezos would be restricted in traditional organizations. Their successes are a result of unconventional strategies and thinking.
Consider structural adjustments.
This may be the most ignored factor in responding to change. Organizations and individuals with more open communication are more effective. Practices like “need to know” are simply obsolete. The more informed people are, the more effective they can be. Similarly, flatter organization structures are better as they provide more speed, expertise, flexibility, innovation, and collaboration.
Embracing openness should help you make better business decisions. Success is often a result of challenging our assumptions, reviewing alternatives, and evaluating our progress. And don’t be a damn martyr! Encourage different perspectives, outside resources, and constant assessment. Change and growth are unavoidable, but how you respond will greatly influence your success.