The Benefits of Envisioning Failure
What would it take to make your business fail? What conditions could precipitate and sustain “the spiral of death”? What would complete financial collapse really look like? If your primary competitor acquired your firm, where would they strip out expenses, and what assets would they covet?
These are grisly questions to even consider, but sometimes you need to envision complete breakdown and failure to understand how to prevent it, and find your next level of success.
Envisioning the failure of your organization is not a pleasant exercise, but it will force your management team to:
- Critically understand, challenge and test the important assumptions that your strategy is built on.
- Look at your business as an objective third party might.
- Discover remarkable clarity about your weaknesses, gaps and opportunities.
- Put traditional risk assessment into a broader and more useful context.
- Be truly innovative to find new sources of growth and strength.
The exercise is straightforward. We've all been through workshops to create a vision of the future, and a strategy to get there.
Rather than create a vision of a successful future, we envision varying degrees of business failure, and what events, inside and outside of our control might contribute. A few pointers for success:
- Keep the session secret. The very notion can be alarming and distracting to managers and employees. Without the proper context, shareholders, customers, and competitors will draw their own conclusions.
- Keep the results secret. The output from the session is an articulation of your flaws and weaknesses, and could be dangerous in the wrong hands.
- Use a consultant or facilitator that is experienced with similar exercises. This exercise can get badly off-track if not handled expertly.
- Be prepared to act on what you learn. If you won't take steps to change based on the results, then don't bother with the exercise.
- Be as open and objective as possible. This is not a session for management to air their pet peeves, and bemoan everything that is bad about the firm.
This work must be sponsored and driven by the division or company leader, and careful preparation and follow up is as important as the session itself. The output of the exercise should include well defined actions with clear timelines and accountabilities for members of the management team.
Although some risk mitigation strategies may come out of this work, this is not meant to be an exercise in risk assessment, but rather an alternate and undesired vision of the future.
This work is not for the faint of heart, but the results are powerful.
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