2020 has brought unprecedented business disruption in a remarkably short period of time. COVID’s complete shutdown of markets, social unrest, and disruptive cyber-attacks have left business leaders spinning. Looking ahead, we are facing a tsunami of real and possible events: multiyear global pandemic, continued aftermath of BREXIT, the escalated trade war with China, conflict with Iran, cyber security threats, ongoing social unrest, contentious elections, and of course, the climate crisis.
We all remember the pain of the dot-com bust, 9/11, and the 2008 great recession that punished our economy for years, but those were individual events that occurred over multiple quarters. What we are facing now is rapid-fire, with no periods of rest. To survive these simultaneous shocks, business leaders need to adopt a mission-critical approach to management and remain ready for each new and inevitable shock.
As was famously written in Sun Tzu’s The Art of War, “the general who wins the battle makes many calculations in his temple before the battle is fought. The general who loses makes but few calculations beforehand.” We know the battle is coming and we know that it will be challenging. Now is the time to calculate our next steps and prepare for the battles ahead.
Step 1: Expect the Unexpected
Planning starts with identifying the signs of shifting circumstances. In the elite forces of the military, all ranks are trained to “expect the unexpected” by spotting these shifts early. When on watch, a guard scans the landscape over and over in search of any changes or disruptions. Often, these are as subtle as a change in the pattern of leaves on a bush or tree. The guard isn’t expecting to see an individual but rather the barely imperceptible shift they cause in their surroundings.
In business, knowing and studying your competitors to identify signs of their market shifts is critical to your survival. If markets shrink, you must capture additional market share. To do that, you must identify and react to your competitors’ market moves. By looking for a break in competitive patterns, you can identify opportunities earlier and plan proactively.
This competitive positioning will not only help you survive a downturn, but will also position you well for accelerated growth when recovery begins.
Step 2: Identify Risk and Rehearse Reactions
Given the onslaught of recent events, it’s not enough to prepare against the known environment. Through operational rehearsal, or war-gaming, the military uncovers risks and consequences and builds contingency plans to prepare teams to react effectively and decisively during any crisis. Operational rehearsal is active, engaged, and thorough. Teams work to:
- Understand the Inherent Risks by examining the operating environment, including government, market, and competitive forces and how they interact.
- Test Plans by creating challenges against the environment and competition to experience how they might respond.
- Build Confidence by taking teams through every possible scenario and outcome.
- Align Teams at all levels and across all divisions.
Businesses that leverage operational rehearsal can identify, plan, and react. Just as important, the exercise also challenges rooted mindsets and changes outcomes. Through war-gaming, individuals are given freedom to test their worst fears; teams learn to anticipate strategic shocks and trauma, creating a clear competitive advantage. The next crisis is met with confidence as teams have been trained to expect the unexpected.
Step 3: Capture Crisi-tunity
After identifying risks and calculating outcomes, the planning continues on the ground, as each unique event requires adopting OODA protocol (Observe, Orient, Decide, and Act) in times of crisis. Elite military forces landing in an unknown situation leverage OODA as a situation analysis methodology to force teams to efficiently examine if the macro environment is holding up the way they thought it would, orient themselves to the actual conditions, determine the best course of action, and execute.
Planning to Expect the Unexpected
Every event has an impact on business, whether it is as significant as a national election or as seemingly workaday as a competitor introducing a new product. There are always winners who are poised to benefit and losers who are sometimes decimated. What separates the two is preparedness: the anticipation and planning for rapid response when an event occurs.
Most organizations can create positive business outcomes when things are going their way, but only the extraordinary ones prepared to capitalize on adverse situations are able survive the shocks and rise to the top of their industry.