Archive for the ‘Contingency Planning’ Category

Richard Martin’s Monday Morning Brilliant Manoeuvres — 6 May 2013

Posted: May 6, 2013 in Brilliant Manoeuvres, Business, Contingency Planning, Enterprise Robustness, Leadership, Management, Military Lessons, Monday Morning Brilliant Manoeuvres, Personal Development
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Brilliant Manoeuvre
Never assume you’re completely right about your enemy (or competitors)… nor completely wrong either.

Discussion
Warren Buffett, CEO and principal shareowner of Berkshire Hathaway just presided over his company’s annual meeting of shareholders. According to this morning’s Wall Street Journal, Buffett took the outstanding step of inviting a well-known investor who’s selling Berkshire’s stock short. Buffett’s point from this, apart from the obvious newsworthiness, is that he likes to seek contrary opinions. His main message according to the WSJ? Doubt yourself. Of course he doesn’t mean to lack faith in one’s means. Rather, he says to question your own certainties. This is a highly developed approach to management and leadership. Whether in war or business, the biggest mistakes come from irrational belief in the correctness of one’s progostications. It takes a big person to consider contrary opinions and views. Buffett’s success as an investor shows that this is a very prudent and wise thing to do.

Questions
What competitive threats are you facing? What capabilities do your competitors have? Can you estimate their intentions? Do you have advisors who systematically question your assumptions and provide a contrary point of view?

Richard Martin is a consultant, speaker, and executive coach. He brings his military and business leadership and management experience to bear for executives and organizations seeking to exploit change, maximize opportunity, and minimize risk.

© 2013 Richard Martin. Reproduction and quotes are permitted with proper attribution.

Richard Martin’s Monday Morning Brilliant Manoeuvres – 22 April 2013

Posted: April 22, 2013 in Brilliant Manoeuvres, Business Continuity, Contingency Planning, Crisis Leadership, Enterprise Robustness, Ethics, Exploiting Change, Geopolitics, Leadership, Leadership Principles, Military Lessons, Monday Morning Brilliant Manoeuvres, Never Fight Fair, Personal Development, Strategy
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Brilliant Manoeuvre
No one can predict the future, much to the chagrin of many economists and financial theorists and their media acolytes, who prefer assumptions of perfect knowledge and decision-making in all circumstances.

Discussion
I’m breaking my deliberate policy of not commenting on political issues this week in order to comment on reactions to the Boston Marathon bombings last Monday. My personal opinion is that the response of government and law enforcement agencies at all levels has been brilliant in the circumstances. However, there are already Monday Morning Quarterbacks saying that the government overreacted by shuttingn down Boston on Friday and part of Saturday. The problem is that the ones responsible for making these decisions can only plan and act based on information available at the time and the factors they felt they needed to consider. Just throwing out there that they overreacted without knowing those things is pure speculation based on specious counterfactuals or a personal hobby horse. If there is something I learned from a 26-year military career and my study of military strategy and history, it is that decisions that can look sub-optimal in hindsight may have been the best at the time given the circumstances of friction, uncertainty, and the fog of war. In this particular case, only a full after-action review will permit the systemic learning to occur. Saying it was an overreaction is nothing but pure hindsight bias.

Tip
The more complex and risky the undertaking, the more likely that friction will wreak havoc. We must compensate by building robustness, resiliency and redundancy into our plans and systems.

From the Vault
A Superb Example of Crisis Leadership in Action

By the way…
My ideas were featured in the March 25th Globe and Mail: A military approach to business.

Richard Martin is a consultant, speaker, and executive coach. He brings his military and business leadership and management experience to bear for executives and organizations seeking to exploit change, maximize opportunity, and minimize risk.

© 2013 Richard Martin. Reproduction and quotes are permitted with proper attribution.

Richard Martin’s Monday Morning Brilliant Manoeuvres

Posted: November 5, 2012 in Brilliant Manoeuvres, Business, Contingency Planning, Crisis Leadership, Enterprise Robustness, Ethics, Exploiting Change, Geopolitics, Leadership, Military Lessons, Never Fight Fair
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Brilliant Manoeuvre
Active, covert threats will continue to grow, and companies must be on the lookout for attacks not just from direct business competitors, but also from actual and potential opponent groups.

Example
At the end of 2011, the computer networks of Stratfor, a strategic forecasting consultancy, were hacked. Financial and other confidential client records were stolen. A group that was opposed to Stratfor’s activities was presumably at the origin of this breakin. Stratfor’s systems and operations were compromised for over a month, and the company had to invest considerable sums and effort to get back on track.

Tip
Most of the intelligence that can be generated about threats and opportunities is staring us in the face, if we are open to seeing it. We have to keep an open mind and be on the lookout for significant changes. We have to keep employees apprised of the situation and objectives so they can also be on the lookout for threats and opportunities, and communicate these to management.

Richard Martin is a consultant, speaker, and executive coach. He brings his military and business leadership and management experience to bear for executives and organizations seeking to exploit change, maximize opportunity, and minimize risk.

514-453-3993 (toll free 888-453-3993)

richard.martin@alcera.ca

More information about Brilliant Manoeuvres: How to Use Military Wisdom to Win Business Battles

Richard’s Speaking

Richard’s Blog: Exploiting Change

Richard on Twitter: boldleadership

Richard’s Email: richard.martin@alcera.ca

Richard’s Company Website: www.alcera.ca

© 2012 Richard Martin. Reproduction and quotes are permitted with proper attribution.

Military Wisdom: The Lesson of Humility

Posted: August 21, 2012 in Brilliant Manoeuvres, Business, Contingency Planning, Enterprise Robustness, Exploiting Change, Leadership, Military Lessons
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I find in my interactions that one of the most useful aspects of military wisdom to business, and life in general, is simply to not assume that you know everything, and that you’ve got everything figured out.

I find that too often business leaders assume that their plans will work to perfection just because, well, they’ve planned it that way. As military history and experience teaches us–and as cogently expressed by Donald Rumsfeld–there are known unknowns as well as unknown unknowns.

Military wisdom teaches us that we have to be prepared for anything, that we must make hard choices about how to allocate scarce resources, that we must consider many different scenarios and options before we decide on a final plan, and that we must keep reserves and contingency plans in our back pocket just in case we were terribly wrong about what we thought the enemy would do, or the weather, or anything else for that matter.

© 2012 Richard Martin. Reproduction and quotes permitted with full and proper attribution.

Competitors Aren’t the Only Threats

Posted: May 3, 2012 in Brilliant Manoeuvres, Business, Contingency Planning, Crisis Leadership, Enterprise Robustness, Ethics, Exploiting Change, Leadership, Leadership Catalyst Newsletter, Management, Military Lessons, Risk Management, Strategy
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One of the things that I’ve noticed lately is just how vulnerable many companies (and other organizations) are to non-competitive threats.

I’m not talking about the traditional corporate bogeymen of big government and big labour. I’m talking about environmentalist groups, political action groups, and even lone bloggers launching verbal rockets from the comfort of their homes. Some of these external groups have good points, but many don’t. Their positions are often non-sensical or ill informed, especially when it comes to science-based facts. The ability to propagate disinformation quickly through blogs, online petitions, Twitter, and Facebook contributes greatly to the capabilities of anyone with a message or a cause.

Organizations need to be aware of this phenomenon and to take measures to protect their operations. Here are four cases in point:

•    A meat processing and packing company in the US called BPI came under attack last year by a lone woman in Texas when she started an online petition against using the company’s product in school cafeterias. BPI’s product, a kind of highly processed meat, apparently excites revulsion among some consumers, even though there have never been any cases of contamination or any other form of associated danger. It just appears to be ‘icky,’ to use a thoroughly scientific term. The consequences on BPI have been disastrous. It’s had to close 4 of its 5 production facilities because its clients—the Walmarts, Taco Bells, McDonalds, and others—have abandoned or put severe restrictions on it as a supplier.

•    Hydro-Quebec, the massive electric monopoly in Quebec, is planning on installing what they call ‘smart’ meters in homes across the province. These will enable more detailed data gathering and information transmission about consumption patterns so that the utility will be able to increase its efficiency. There are some 15 or 16 applications for this technique at the present time, and probably many more in the future. But some people find the fact that the meters emit radio waves to be a harmful side effect. Never mind that the emissions are so weak that they can only be measured in a lab similar to an anechoic chamber, Hydro-Quebec has to fight off ignorant opponents who don’t know the first thing about basic physics. Let’s hope the project goes through nonetheless.

•    TransCanada Pipelines has to fight against opposition to the Keystone XL pipeline from environmental groups in the US. The purpose of the pipeline is to ship oil down from the Alberta oil sands. I’m sure these groups have a lot good points, but the alternative to a new pipeline from Canada is to ship the oil from Venezuela and the Middle East by oil tanker which, once it’s on US soil, still has to travel in a pipeline. Unless the US starts consuming radically less oil—something I don’t think will happen anytime soon—I don’t see how shipping oil from another continent in a combination of oil tankers and old pipelines is safer than in a single brand new pipeline. It’s a question of balancing risks, not eliminating them altogether.

•    Stratfor bills itself as a ‘strategic forecasting’ consultancy, providing geopolitical and military-strategic assessments of the world and regional situations for paying clients around the world. It’s safe to assume that some of these clients are corporations trying to work in dangerous environments and governments seeking independent sources of information. Stratfor’s website and computer servers were hacked late last year, with the theft of competitive and client information such as credit card data and repeated illegitimate email blasts to the company’s client lists. The hacking had all the makings of a deliberate attack to discredit and disrupt Stratfor’s operations and credibility. The company has spent millions getting its operations back on a secure footing.
I’m sure readers have their own experiences or know of other companies and organizations that have had to react to these types of threats. I could have included SNC Lavalin’s dubious connections in Libya, or Talisman Energy’s difficulties in Darfur ten years ago, or even Apple’s Chinese sub-contracting practices.
I write about this phenomenon in my forthcoming book, Brilliant Manoeuvres. It is my contention that many companies need to worry as much, if not more, about nebulous threats from non-commercial entities as they do from traditional business rivals. As we’ve seen from the examples above, the threats can be costly and, in some cases, disastrous.

These types of threats can come from anywhere. Here are some questions to ask in identifying potential threats:

•    Do any of our activities or products, though legal and approved, nonetheless elicit opposition in some way?

•    Has anyone ‘threatened’ to take us down or harm our operations in any way?

•    Is there anything we do that we feel uneasy about making public, even though that activity may be perfectly legal?

•    Can what we do be interpreted in a highly negative light from the standpoint of the environment, politics, or labour practices, whether in North America, Europe, or anywhere else in the world? (Think of the opposition to Apple’s sub-contracting practices with Chinese companies with abusive labour practices.)

There are many other questions that can be asked. The point is that someone somewhere may not like what a company is doing, and can take action quickly to sully the company’s reputation, sometimes with massive effect on its business. I will blog more about this topic in coming weeks, specifically on what to do about it.

© Alcera Consulting Inc. 2012. We encourage the sharing of this information and forwarding of this email with attribution. All other rights reserved.

Consumers Can Vote with their Tweet

Posted: April 18, 2012 in Brilliant Manoeuvres, Business, Contingency Planning, Crisis Leadership, Enterprise Robustness, Ethics, Exploiting Change, Management, Marketing and Business Development, Military Lessons, Risk Management, Strategy
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Remember when the expression was “Consumers vote with their feet”? The meaning was obvious. A company often doesn’t know that it has a problem with consumer satisfaction and confidence until sales have started to drop, and then it’s often very hard to recover from that loss of good will.

Well, now that we live in the age of instant tweeting and blogging, it seems companies can be brought down by rumours spread over social media, online petitions by people who don’t even buy their products, or by a particularly nasty blogger. The mainline media, more concerned about repeating accusations and rumours, than in determining if they prove unfounded, jump into the fray and report tweets and online flamings as news. It’s getting ridiculous.

The real issue for business though is that competition and threats don’t just come from the traditional sources anymore. It used to be competitors, government, and unions were the big bad enemies. Well, now any environmentalist or concerned parent can start a online thread somewhere and the effects can be devastating for a company, even if there is no evidence the company did anything wrong. All that has to happen is an accusation that ‘maybe’ something is wrong…or it’s products are icky.

This is what has happened to BPI, an American meat packing company, as reported in the April 16th issue of Bloomberg Business Week. The company’s founder Eldon Roth about 30 years ago figured out a way to separate what remained of meat on pieces of beef carcass that had been butchered. The process Roth perfected basically uses centrifuges to separate the meat from the fat, which is then freezed and turned into a kind of ‘pink slime,’ as it is known by detractors, so it can then be added into other ground beef products to raise the meat content. Major clients of BPI have included McDonald’s, Taco Bell, and Walmart. To make his product as safe as possible, Roth treated it with an ammonia compound to kill bacteria. This was all approved by the US Department of Agriculture.

Now, BPI is on the verge of shutting down. Why? Because a lone blogger in Texas was concerned about the safety of BPI’s product. Apparently, it wasn’t so much the nature of the product itself, although it IS icky (that’s a technical term by the way). It’s supposedly the fact that it is treated by the ammonia compound, even though that particular process is approved by the USDA, is common in the meat packing industry, and is naturally occurring in beef anyway. BPI’s product isn’t contaminated or carcinogenic. It just happens to be, again, icky, and chemicals are used in its processing.

We could say ‘so what.’ So some company has come under attack for the nature of its product, and it will probably be forced out of business by the rumours that have been spreading on the web. The issue here is that companies can come under attack from quarters they hadn’t even thought of. We’re not talking about other companies, or politicians, or lawyers, or even customers abandoning the company because they no longer like the product. We’re talking about someone in the comfort of their home starting a string of rumours or tenuous accusations that then go viral on the internet and in the band of imitators in the news media.

I write about this phenomenon in my forthcoming book, Brilliant Manoeuvres: How to Use Military Wisdom to Win Business Battles. Specifically, I write about this in the chapter on applying the logic of military intelligence to business intelligence. We never know who our real enemies can be, and where threats will come from. The solution is to assume that these threats exist and to take them seriously when they do occur, even if they are small. Even better, though, is to become proactive by going on the offensive. If you are sitting in your boardroom wondering what would happen if a blogger or an irate consumer found out something about your production process that could be interpreted in a less than stellar manner, even though you know that you are in the right, then there’s probably a good chance that that will occur at some point.

© 2012 Richard Martin. Reproduction and quotes permitted with full and proper attribution.

Success Principle # 4 – Surprise

Posted: March 8, 2012 in Brilliant Manoeuvres, Business, Contingency Planning, Crisis Leadership, Enterprise Robustness, Entrepreneurship, Exploiting Change, Leadership, Management, Marketing and Business Development, Military Lessons, Never Fight Fair, Opportunity, Innovation and Adaptation, Personal Development, Strategy
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Now here is a surprising success principle! How can surprise possibly contribute to success? I will propose three ways. The key thing to realize is that surprise is essential to strategic advantage. Don’t squander it!

First, there is little to no advantage to revealing your intentions ahead of time in any kind of adversarial or competitive situation. Look at how Apple has been consistent in keeping mum about its initiatives and new developments. Secrecy is an obsession at the company, but it has many benefits in terms of surprise, among which: competitors are caught off guard when you spring your new products on them; customers are pleasantly surprised because they don’t necessarily know what to expect in advance.

Second, there is no advantage to revealing too much to others about your plans or decisions ahead of time. This is because, strategically, anything can happen. It’s better to surprise the market and competitors than to have to retract at the last minute or recant after the fact. As with Apple, surprise also generates a lot of free publicity for the company.

Third, surprise and secrecy contribute to freedom of action and freedom of manoeuvre in a strategic (i.e. adversarial) situation. If you signal your intentions ahead of time, your opponents can prepare directly for them or create better contingency plans to ‘head you off at the pass.’ Freedom of action is critical to seizing and maintaining the initiative, and these in turn are critical to maintaining an offensive spirit.

© 2012 Richard Martin. Reproduction and quotes permitted with full and proper attribution.

How Robust Is Your Business?

Posted: October 26, 2011 in Business, Business Continuity, Contingency Planning, Enterprise Robustness, Entrepreneurship, Small Business, Succession planning
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CBC News is reporting this morning on a TD Waterhouse poll result indicating only about a quarter of small businesses have a succession plan in place for when the founder/owner retires.

That’s pretty bad, in and of itself. But even worse is the fact that right now, most small businesses are completely reliant on their founder/owners as principal marketer and salesperson, operations head, director of HR, head of procurement and supply, production manager, etc. etc.

It’s inevitable that a small business owner will do most if not all of the work at the beginning, but as the business grows, the company’s knowledge, skill set, and processes must be progressively systematized. The key is to get what is in the owner’s head out into the systems and processes and structures of the enterprise. This is so that employees can act and innovate based on the owner’s knowledge and acumen.

A few years ago, I was chatting with the president of a small tool supply business. The owner, a man in his early 50s, had succumbed to a massive heart attack and died on the job. When everyone in the company got over the initial shock, they realized that everything of consequence about running that business was in the owner’s head. We’re talking processes, supplier lists, client contacts, stocks, financials. Everything. The new president admitted freely that the company almost went under, simply because no one knew who to contact upstream or downstream, or even the full picture of the business. Disaster was averted (beyond the death of the owner), but it could easily have been otherwise.

Companies, even very small businesses, need to think about worst case scenarios. For a small business, the worst case is always the permanent or temporary loss of the owner/president. Can the company operate for a length of time without it’s principal impetus to action? Would employees know who to call at clients or suppliers? Do they know who the insurance brokers are? Do they have a relationship with the banker? How about the accountant?

The owner doesn’t need to die for this to be a major hindrance to the company. It could be personal or family illness, injury, or just overwork, leading to the principal not being at his or her personal best for a length of time.

The time to prepare for these situations is now, when everything is operating smoothly. Even small businesses must improve their robustness. This is the ability to survive and even thrive in adverse circumstances.

© 2011 Richard Martin. Reproduction and quotes permitted with full and proper attribution.

Beyond the Next Hill

Posted: August 2, 2011 in Business, Contingency Planning, Entrepreneurship, Exploiting Change, Leadership, Leadership Catalyst Newsletter, Management, Military Lessons, Personal Development, Strategy
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A few weeks ago, I wrote the following entry on my blog (www.exploitingchange.com): In the military, young officers and NCOs are taught to think “beyond the next hill.” This means that you can’t just focus on the next objective, the next tactical bound (an intermediate objective for movement), or the next moment in time. You have to constantly be thinking of what can happen next. You also have to think of what can or can’t happen as a result of your decisions and actions. It’s not unlike what good chess players, good pool players, and good golfers do. They are constantly thinking of the moves and countermoves that will follow the next one.

This type of anticipatory thinking is distinctive from contingency planning. In contingency planning, we anticipate events and situations that are largely independent of our own actions and that are inherently uncertain. An example is the potential effect of weather on a building project. Whether it is raining or sunny, this can affect the speed of, say, road construction. No amount of prior planning can affect the weather. On the other hand, it is possible to take measures to attenuate the potential effects of the weather in order to optimize the construction project. This is the domain of contingency planning.

But whenever we are dealing with people, we enter a completely different realm requiring a different type of anticipation. Someone once said that the difference between the natural – or hard – sciences (e.g. physics, chemistry, engineering, etc.) and the human sciences is like the difference between kicking a rock and kicking a dog. The differences are qualitative rather than quantitative. It is evident that we are in completely different domains of knowledge and practice.

This type of interaction requires dynamic foresight, i.e. the ability not only to anticipate, but to do so based on one’s own “moves” and the other person’s goals, motivations, and interests. Whenever you’re negotiating, you have to envisage the range of possible responses and reactions to your offers, and prepare your own contingent responses. This type of move-countermove dynamic can play out over several cycles.

I would extent this further by noting that this is the entire domain of strategy. People often colloquially refer to their strategy for doing things where there is no chance of an intentional response. For instance, you can say you have a strategy for digging a hole, but in reality the ground doesn’t have any intention of resisting the digging. There are contingent factors, such as weather, but this doesn’t mean there is another party to the digging. On the other hand, any time you are interacting with other human beings who have their own goals and intentions and motivations, you are necessarily in the realm of strategy. The ability to anticipate their reactions and responses more than one move ahead is vital to achieving your aims.

Regardless of your objectives, the surest route to effective strategic interactions is to determine at the outset whether you are in a situation of conflict, competition, or cooperation. Many strategic interactions falter because the stakeholders fail to realize that people act and react differently depending on the tone of interactions, especially if they perceive that their fundamental interests are at stake. For instance, negotiations can take a very different turn depending on whether you see yourself in conflict or competition (win-lose) or cooperation (win-win). Some leaders try to motivate their personnel by putting them in competition with each other when what is really called for is cooperation. This can be even worse when the leader creates conflict between team members.

Further ineffectiveness can result from treating people like rocks and physical objects, rather than living, breathing beings with motivations, aspirations, and interests that may differ substantially. This requires insight into personality, behaviour, and emotions. It also requires the ability to anticipate the consequences of one’s interactions, not just immediately, but even more “beyond the next hill.”

© Alcera Consulting Inc. 2011. We encourage the sharing of this information with attribution. All other rights reserved.

Thinking Beyond the Next Hill

Posted: July 9, 2011 in Business, Contingency Planning, Entrepreneurship, Exploiting Change, Military Lessons, Opportunity, Innovation and Adaptation, Personal Development, Risk Management, Strategy
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In the military, young officers and NCOs are taught to think “beyond the next hill.” This means that you can’t just focus on the next objective, the next tactical bound (an intermediate objective for movement), or the next moment. You have to constantly be thinking of what can happen next. You also have to think of what can or can’t happen as a result of your decisions and actions. It’s not unlike what good chess players, good pool players, and good golfers do. They are constantly thinking of the moves and countermoves that will follow the next one.

The same applies in business. As I was discussing his potential hiring of a manager with one of my clients, I reminded him of the need to look beyond the immediate actions and consequences. What could conceivably happen if the person he was looking at hiring turned down his compensation offer. Would he be able to accept those consequences? What would he do if he didn’t, or if he did? How could other stakeholders react? What alternative solutions were possible?

You don’t have to become obsessed with looking beyond the next events or actions, but you have to be at least as alert to these possibilities as a young military officer or NCO, or a good golfer, chess player, and snooker player.

© 2011 Richard Martin. Reproduction and quotes permitted for non-commercial purposes with full and proper attribution.

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