From extreme weather disasters and geopolitical unrest to increasingly high energy prices and strained supply chains, the Allianz Risk Barometer is predicting elevated levels of disruption for the next 12 months. If you’re not already prepared for everything 2024 may come with, now is the moment to proactively plan your response to worst-case scenarios.
When HBO did this exercise, it generated six pages of tactics that a competitor could use to destroy it. A city council in Texas uses it annually to anticipate potential threats to their city. Every quarter, an American mining company runs it to identify competitive and market forces.
Within your company, invite employees from all levels to a remote, in-person or hybrid session. Present this challenge to the group: “What could put us out of business in 2024?” Assure them this is not a prank and ask them to imagine all the ways to run the company into the ground.
When you reverse a highly conventional question — “how can we beat our competition?” — it empowers the people with insider knowledge of your business to reveal its weak spots. Ask everyone to write or type each threat on a virtual or physical sticky note. Sample threats could be “our main competitor starts selling our core product for one-third less” or “consumer demand drops suddenly by 40%” or “we’re exposed for a security breach of user data.”
When you give employees permission to be honest about your company’s flaws, they’ll deliver. And if they generate 30 weaknesses in 30 minutes, it’s exactly what you need to get ahead of imminent threats. After all, the competition doesn’t care about your pride or the chain of command; they want to win at any cost.
From here, prompt each participant to reveal their sticky notes. Direct them to categorize each one as either a big or small threat and whether they think the threat will be easy or hard to remove. From the array of sticky notes, open a discussion about which threats are perceived as the most threatening and easiest to remove. Then, take a vote on the top three.
When you have consensus, ask your teams how they’d prevent those things from happening? For example, to hedge against a 40% drop in demand, could you make a strategic acquisition to expand your customer base? And to lower your risk of a privacy breach, what about investing now in encryption to better protect your consumer data in the future?
This phase of scenario-planning is where the pain pays off because it’s when your biggest threats are transformed into real-world solutions that are truly innovative. By the way, sometimes a few tactics generated in this exercise can actually be turned against your competition.
For example, if one of your threats was a drop in consumer demand…could you bring your own product costs down by one third? Perhaps by relocating manufacturing? Could this change enable you to then sell your product for one-third less? Likewise, this exercise can uncover hidden strengths within your company. If, say, it becomes clear through this exercise that you’ve got a lock on manufacturing or pricing, identify immediate ways to leverage that strength.
This exercise helps you recognize where your business is vulnerable by giving your employees permission to say the quiet part out loud. It’s also cathartic for employees, especially those who are dispirited and frustrated. Strategically invite those folks to the table — along with a handful of new employees, who will likely bring their valuable objectivity. By planning for worst-case scenarios, you can better prepare for the disruptions ahead. When you make this exercise a routine activity, you’ll build the skills of resilience and agility needed for your company to survive and thrive in 2024 and beyond.
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