As we head into the fourth quarter of 2022, with what TD calls a lethargic economy, let’s take a brief big picture view of the economy. The current outlook considers many different factors including post pandemic recovery, the energy crisis in Europe, the war in Ukraine and Russia, China’s real estate slowdown, and here on North American soil, heavy inflation and rising interest fees and supply issues, there is an underlying fear of an oncoming potential recession.
So, I ask again what’s the worst that can happen? As a leader, how can you help your business navigate taking risks of change and uncertainty?
The answer to that question can be found by looking at the backbone of all risk management processes: the worst-case scenario.
Where there is change, uncertainty and instability, the success of your business can benefit from the analysis of worst-case scenarios to enable you to be more decisive when important decisions need to be made, reducing the dangers associated with risk-taking.
Let’s take the worst-case scenario here: a recession
- What parts of your business will be the most affected?
- How can you soften the impact on your business?
- What risks can you afford to take?
- What risks can you not afford to take?
- What risks are critical to business success?
It’s important to note that for the most part, worst-case scenarios tend to be manageable. We’ve been in a recession before. Worst-case scenario preparation can work as a great tool for success. Remember, risk-taking is an inherent part of disruptive innovation which is necessary if you want to propel your business to the next level.
(If you missed it, last month we looked at overcoming fear and risk management, looking at opportunities and risk analysis. With some great examples of success and failures. Click here.)
Leaders and Decision Making
As a business leader, making decisions is relentless. Your job is to arrive at great decisions even if you are under pressure. Every decision you make has a consequence.
The best leaders understand that energy needs to be applied to both the decision-making, but also to recovering from a bad decision faster. This is what’s known as the “no-regrets” strategy. Developing a ‘no-regrets’ strategy, to align with the worst-case scenarios can build confidence in decision-making and prepare for an easier time during any crisis.
In business, there’s never a perfect plan. To be a successful leader (and successful in life!), you have to grow accustomed to uncertainty. Indecisiveness drains your energy and time. Making a decision, even an incorrect one, is forward momentum.
In the long run, the only wrong decision you could ever make for your business is making no decision at all.
Fail Fast, Fail Cheap, Fail Often, and Learn from Your Mistakes
Conventionally speaking, failure is not tolerated and is often perceived as a weakness. Nevertheless, frowning upon failure prevents us from learning from our failures. In turn, we tend to lose numerous opportunities to grow and realize our goals. Alternatively, an agile and robust business strategy should include systems that can benefit from failing fast, failing often, failing cheaply, and learning from our mistakes.
Failing fast: The sooner that failure happens, the sooner the lesson behind it can begin. This allows you and your team to access quick feedback on what works and what doesn’t that you can then use to adjust your strategy and move forward.
Failing often: The moment the failing and learning loop is established, you’ll discover the more different things you try out, the more failures you’ll have, and thereby; the more opportunities, you’ll have access to learn and steer your business strategy towards success. Failing often also helps in eliminating the necessity of wasting unnecessary time on wrong approaches which you’ve already tried.
Failing cheaply: Business experiments are often expensive since many businesses try to gravitate towards success in their own eyes before they can run external tests. Conversely, by failing cheaply, the more freedom you and your team will have to alter your approach and avoid big losses.
Learning from your mistakes: When you learn from your failures, and in extension your mistakes, failure will be the best thing that could happen to your business.
The time has come to think big, start small and act immediately! You can enhance your success rate in business by failing fast, failing cheaply, failing often, and learning from your mistakes.
Being a great leader equates to having the ability to learn how to overcome fear, manage risk and make difficult decisions in diverse situations. Most start-ups fail because they try to achieve more than what’s sustainable, they’re not prepared for the worse-case scenario.
If you’re ready to overcome your fears, you need help with your worst-case scenarios or if you are struggling with a big decision, connect with me and let’s walk through it and find a solution.
I’ve project managed some of the most challenging infrastructure projects on both sides of the Pacific. Without taking calculated risks and developing detailed risk management strategies these projects would not have been completed as effectively as they were. I now work with some of the most talented; Business owners, Entrepreneurs, CEOs and C-Suite Executives who overcome fear and takes risks in their business every day. As a result, they are leaders in their industry sectors. We do this through regular 1:1 coaching and peer group meetings to reach greater results than would be possible on their own.
Connect with me to see how we can open your mind to overcoming fear and taking risks to achieve greatness. Email me.