Things are getting serious. And like any serious situation, as a leader you must give it the appropriate thought. Over thirty years or so I’ve worked with some incredible people who have taught me lots of decision-making tools ranging from the incredibly complex (Bayesian Inference) to the inane (gut feelings). This article is about one tool which I have found to be incredibly useful.
A literary agent friend told me a joke the other day. A management consultant goes into a publishing house, and after tens of thousands of pounds comes back with their conclusion: “It’s simple. In order to survive you need to only publish bestsellers.”
It’s all good to make plans based on what you expect to happen, or rather want to happen. But the reality is nobody has a crystal ball. None of us can really tell what the COVID-19 crisis will really do to our companies. We know we’d like it to all be ok, for the government to have a bigger crystal ball than the one we have access to.
Prudence says different.
Game theory gives us some simplistic tools to help us. It’s based on asking the question “What’s the worst that can happen?” Then planning accordingly.
Imagine a four box matrix (obviously all great management tools are four-quadrant box diagrams or three-ring Venn diagrams): the two axes are ‘Do nothing — Do something’ and ‘Mitigation doesn’t work — Mitigation works’, where ‘Mitigation’ is some action, and we then map the results into the boxes:
Clearly Do nothing always results in Don’t survive. But in total contrast Do something gives you some chance of surviving.
So by implication you must do something.
Problem is most people really aren’t doing something. They’re waiting for the government to make a decision for them. So now is the time for you to be a leader not a follower.
At my company we have advised all our client businesses to send their staff home, set up remote working, set up remote client meetings, run customer analysis to see who may stop spending and when they will restart, and to preempt it by good planning. We’ve moved to 100% remote workshops and board meetings. Zero inessential travel. We’re also adding additional coaches and mentors to ensure teams don’t lose focus when they don’t have regular face time in the office.
What’s the worst that can happen if we don’t prepare? If you get your plan wrong and you don’t survive at least you will have given yourselves a chance. If you get the plan right you will thrive when the inactive don’t, and your business will recover faster post-trauma. I started my most successful companies during the pain of a recession. I’ve met others who recount the same experience and how it inoculated them against the fear that inevitably occurs when things are tough and the unknown surrounds us. We’re confidant that the teams that we built with our clients will thrive in these challenging moments and we’ll be following them and working with them going forwards.
And if we’re all wrong and COVID-19 blows over or bypasses our industries, then we’ll have built incredible resilience for the next one that doesn’t blow over.
As my literary friend’s joke implies, while you’re stuck in the realms of guesswork your only chance of business survival is being proactive rather than passive. If the government gets it wrong, at least you have given yourself the highest possible chance of getting through this and thriving.