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 There
are two techniques that can be useful in developing the
foresight that is a hallmark of
effective leaders.
Practice Crisis
Anticipation
The first is called “crisis
anticipation” and it involves looking ahead as far as you
can and asking, “What could possibly change or go wrong that
would threaten our survival?”
Think About The Worst Possible Event
For example, what would you do if interest rates doubled, as
they have done in the past? What if your best-selling product,
or service, suddenly stopped selling, as often happens in
high-tech industries in times of rapid change. What if a key
executive died unexpectedly or your offices with all your
records were destroyed by fire? What if you lost your key
customer or major source of revenues?
These and other questions can only be asked and considered by
the
corporate leader, the person ultimately charged with the
overall
responsibility for results. The failure to think through
possible crises in advance can open you and others to fear,
panic and confusion if something goes wrong.
Plan For A Crisis
The Greek philosopher Epictetus said, “Circumstances do not make
the man; they merely reveal him to himself.” A crisis is the
genuine test of courage
and effectiveness in a leader. You can greatly improve your
abilities to function in a crisis situation by thinking it
through in advance and by developing contingency plans
–
just in case.
 Determine
What Can Go Wrong
The second technique is called the “master method” of
decision making. It involves asking, “What is the worst
possible thing that can go wrong in this situation?” Once you’ve
asked the questions, you must decide whether or not you can live
with those consequences. For example, in an investment, or
new product introduction, or new promotion, the worst
possible outcome may be that you will lose every penny. Can you
live with that? Can the company survive? There are many
different types of decisions and one of them is the decision you
cannot afford to make. Most big failures result because someone
made a commitment of resources without carefully considering the
worst possible outcome.
Do What Billionaire's Do
John Paul Getty, the great oil billionaire said that one of his
secrets of success was to always determine the worst thing that
could happen in any investment
–
and then make sure it didn’t happen.
Action Exercises
Here are two ways to apply these techniques to your own
situation:
-
First,
make a list of the three worst things that could happen to
your business or your department. Then
develop a strategy to deal with these situations if they
occur.
-
Second,
practice “crisis
anticipation” in each key area of your life. Look into
the future and imagine a major setback. What would you do if
they happened?
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