Many businesses just go with the flow but what happens when unpredicted things happen?
First reactions are often fear and uncertainty, then frustration as worrying questions come thick and fast. What is going to happen? How will I be able to continue trading and working? What will happen to my business and employees?
These feelings and questions are normal in the first moments of shock but it is possible to mitigate the effects of market upheaval for both the business and its people.
A business without goals – and plans to achieve those goals – is like playing football without knowing where the goal is. You can play well and have fun and even have a false expectation about getting good results but are these results the right ones? Do they improve the business situation you’re in or your position in the market?
The first step is to set goals and create a plan to achieve those goals. Then comes the tricky part: how do I set my goals if I don’t know what is going to happen next?
As Peter Drucker said, “You cannot predict the future, but you can create it” and the solution is to create scenarios. At minimum you should create two scenarios, the worst case and the probable case. You could add the best case if you want to.
Creating a scenario forces you to place yourself in a specific context, which can be out of normality, or focus on extreme conditions. This may create uncertainty or even fear but it also provides clarity on what you could do in a particular situation in order to achieve your goals. Once your goals for each scenario are clear, then you need to make a plan for each scenario and its set of goals.
Working with scenarios helps you to create certainty in a world of uncertainty. It allows you to be prepared for a wide range of possibilities, even those outside the scope of your imagined scenarios because, once the exercise is done, you have a broader view of the operating environment.
The ensuing reality will be different to the scenarios you created but two considerations here: the reality will generally fall somewhere between the worst and best case scenarios and, most likely, will be closest to the probable scenario you created – and this is not coincidence. If you follow a plan well, you will most likely reach the goals you forecasted.
If market forces make it impossible to achieve a goal, having planned a series of them gives you an advantage and a more positive position. You will not be shocked or unprepared. You will be ready to take action, drawing on your thinking from the various scenarios considered or, in the worst case, you will be able to set new goals and create a new plan.
How do you create good scenarios? Work with your team, do it with your coach or get the help of your board. You will get more ideas and will cover more variables. Two heads are better than one. The resulting collaboration will be a more robust and certain position for you and your business while your team will recognise your leadership and be more engaged in working towards your goals.