3 Big Steps For Leaders To Mitigate The Effects of Black Swan Events
See if you can quickly answer these questions:
What would happen if one of your key leaders went away?
What if your most prized client left?
What if your system was hacked?
What if everybody from an entire line of service suddenly quit?
What if there was a fire and the building burned down?
What if there was an event that took out your communications for the next three days?
In any of these events, do you know what the next step would be? It’s natural if you don’t because – and I’ll let you in on a little secret – most leaders don’t. This is especially true when an event occurs that is unprecedented in human history, totally unexpected and has a major impact on society – also known as a Black Swan event. In our last post, we touched on some of the Black Swans we’ve seen in history such as 9/11 and the fall of the Soviet Union. Nobody saw those events coming, no matter how many experts in hindsight now say they did.
However, even when it isn’t a fully-fledged Black Swan event, like the scenarios from my questions above that will probably impact your company more than our entire society as a whole, it can still feel catastrophic and unprecedented.
So what can leaders do to navigate through Black Swans and other types of incredibly unpredictable events? We may not be able to foresee when such events will occur next and what the impact will be, but we can put the pieces in place to not only help the company survive the event but keep the bumps in the road ahead much smaller.
Here are 3 gigantic steps your leadership can take on that front:
ACTION STEPS: Minimizing The Potential Damage Of A Catastrophic Event
Bundle Services You have a client with a relationship built on one person or one service. What happens if a Black Swan event occurs and that one service you provide has to be interrupted? And what if a competitor has no issue providing that service in your place? You can guess what comes next. Before it gets to that point, think about what it means to grow the relationship to one more department with one more key contact, offering them one more service from at least one more of your own people. Suddenly, it’s become that much more complex for the client to walk out the door due to a disruption from a Black Swan event.
Share What You Know Across The Team Great leaders don’t bottle up what they know due to insecurity or control issues. Deep down, they’re thinking, “So-and-so isn’t the company’s client. It’s MY client. I’m the only one who really understands what they want and I’m the only one qualified to deal with them.” That’s just building a wall of isolation that actually hurts the firm from strengthening the relationship with the client. Now consider if a Black Swan event happens where the leader serving that client is no longer at the firm. Does another person in another department or another city know what they know? Why not? It’s time to share the knowledge through mentoring, training and taking other team members to the client meeting so their faces can become familiar. You can’t afford to pretend you’re the only one with the answer. The difference of whether your company moves forward or not successfully after a catastrophic event may depend on how much you surrounded yourself with other people who are fully apprised of all pertinent client matters and personalities.
Think Of All The “What Ifs” Collectively – And What The Actions For Each Will Be It’s not just an individual leader who can isolate themselves from others. Entire companies have fallen victim to it. I can think of three easy examples: Kodak. Hostess. Blockbuster. These companies absolutely had their corner of the market nailed. But once the leadership started becoming too enamored with their own technology and press clippings, they became blind to the fact that they’d fallen behind the curve of innovation. By then, they were too invested in one path to pivot with the times. Someone within the leadership of a company like Blockbuster should’ve asked a simple series of questions: “What if there comes a time when people are actually able to rent or buy movies at home…without having to drive to one of our stores? What if they never had to hear, ‘We’re out of that movie’ and could just somehow access it whenever they wanted to at home?” When the unprecedented event of renting a movie through a cable service on demand occurred, Blockbuster was essentially done as a company. One person can’t see such things coming but you have a far better chance of foreseeing as many “what ifs” as possible if the leadership team comes together to address them – no matter how outlandish some of them seem today on paper – and logistically plan for what the appropriate response will be.
Are you ready to get real and execute a plan for “what if”?
Good. Value Drivers has two excellent ways to solidify those plans for the long haul. First, for those transitions involving CEO onboarding, it’s better that your Board of Directors and us meet now regarding our Setting Leaders Up For Success program. If you don’t like unpleasant surprises from your most valuable clients (and really, who does), let’s talk about one of our Client Loyalty Assessments.
In just a few months, you won’t just be planning for what could be. You’ll be ready to make it happen. To learn more, call Value Drivers today at 312.827.2643, email firstname.lastname@example.org, or click here to schedule a 30-minute consultation.