Worst-case scenarios are real

Are you prepared for the worst that 2020 can toss at you?

Getty Images
Getty Images

Take a moment to ponder this question: What will the world look like in 12 months?

Will there be a resurgence of the pandemic later in 2020, with the return of wholesale lockdown measures? Even if the virus is contained, what lasting damage has been done to the economy? Once government subsidies are exhausted, what will be the cost in terms of jobs lost or businesses destroyed? Who will occupy the White House in January 2021?

Then take a few moments to think about your own life.

Will you still be doing the same job, a different one, or will your job be gone completely? Will your kids be able to return to college in the fall? Will your retirement funds have grown or shrunk? What will happen to your town? Could the city go bankrupt?

At no point in any of our lives have these answers been harder to find. Given the dramatic events happening around us, the very act of considering the future can cause a great deal of anxiety.

Welcome to a new future of unprecedented uncertainty, where the course of events is further outside of human control than at any time in living memory. The potential outcomes are too complex to calculate.

The smartest epidemiologists, engineers and economists cannot begin to assign meaningful probabilities to any one of them. The virus might become more virulent, like the Spanish flu of 1918, or it might fade away as past outbreaks have done. There might be a vaccine for this virus, or there might not be.

Consumers might return to their old habits of shopping, foreign travel, restaurants and bars; or they may have adjusted to a new reality based around the home and family isolation. We could be facing a very long economic slump or a very quick and sharp recovery.

For business leaders this means scenario planning — previously reserved for multinational corporations — must be taken seriously at all levels. And scenario planning means considering the impact of multiple scenarios across critical aspects of the business.

Like all good business planning, scenario planning starts with raw intelligence. Gather all of the sources of data within your business and try to figure out what they are telling you. Identify what you don't know and figure out where to get that data.

Once you have worked out the most likely scenarios, map every possibility and ask how each one could impact your operations, customers and external stakeholders.

If customers stay away, what's your plan for keeping them on your side and regaining their confidence? If we enter a prolonged recession, how many people do you need to maintain a viable business? What's your plan if there is another lockdown?

Perhaps the most important question is: What's the worst that could possibly happen, and are we prepared for that?

One of 2020's lessons is we have to take worst-case scenarios seriously. Black Swans are not the stuff of nightmares or best-selling business books any longer; they are real.

Once the data has been assembled and key questions answered, use the completed scenario maps to define a set of strategic choices that can be activated in any given situation.

Keep a pulse check on customers and other stakeholders. They know you are facing the worst business environment anyone can remember, and that you might have to make tough decisions. Find out what's important to them in the next phase of this crisis.

Make sure you include a crisis management strategy in every scenario plan. Road test your readiness through real-time crisis simulations, to identify what could go wrong.

Finally, once the scenario planning is complete, don't file the results in a drawer. Maintain the plans as living and permanent parts of your business. We'll get through this current crisis eventually, but let's not repeat the cataclysmic mistakes of 2020 — a massive failure to spot the early warning signs and act on them.

Will you remain resilient in the face of whatever the next 12 months can throw at you? Will your reputation survive all of the knocks you might take in the process?

It may seem counter-intuitive, but in an unprecedented situation where nobody has the answers, the key to survival lies within our own hands.

Geoff Beattie is EVP and lead of crisis and issues in North America for BCW.

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