The Extra Sip
Blog by The Business Hangover
with Nicky & Sarah
The feedback from our podcast asked us to delve a little deeper into the concepts we talked about. Never shy of a challenge we said, why not? The Extra Sip is a blog to explore the ideas and feedback from our podcast series and to continue to share the world of business, our views and experiences with you.
In the business world we call an unpredictable or unforeseen event, usually something that comes with an extreme consequence, a Black Swan event. It is a unique set of circumstances that we were unable to gauge and as such, the strategic plans to manage the outcomes, are unsuitable at best and disastrous at worst.
If nothing else the recent pandemic highlighted a level of complacency and misguided belief that we actually control our environment and our business futures. The disruption to supply chains, productivity models, workforce support and IT capabilities were quickly shown to be inadequate and slow to manoeuvre or respond to the chaos of a crisis.
Our risk management plans had not dived deep into the unexpected risks that a world that runs on its own framework could have on the delivery of outputs and commerce. We failed to truly encapsulate the mental health impact on our workforce created by Black Swan events, or the understanding of the time frame of chaos on our personal and professional lives, individually, within communities and globally.
Model Risk Management teams (MRM) or as we call them Black Swan Management teams (BSM) have a big job ahead of them now. CEO’s and Directors must be mindful of how they situate the importance of a well-funded group of creative and outlier thinking individuals within the business models moving forward. The benefits are to discover the unpredictable opportunities and theoretically road test the possible outcomes.
A fast moving business landscape.
What has been highlighted is the large number of organisations needing to structure their business with the backbone of a creative culture that drives strategic planning and operational structuring for the future. How we think, act and brainstorm in business is on an equal footing with the importance of our procedures, processes, and production goals. Reliance on historical data to predict future trends and deliverables is nonsensical in times of crisis. Business loose the ability to stay ahead of the curve, as catching up is now near impossible. Our business landscape is shifting too fast and the variables are adding up daily- from service delivery and production to workforce accountability and support.
Value-added person-centred approaches or Humanistic Leadership can lead us through the discord and turbulence of crisis in business. A fully functional and funded BSM team have the capacity to become the business expert advisors, capable of offering sound judgment built on the creative and innovative brainstorming that is their role within the business. Although not fool proof, it is a proactive way to engage in the unpredictable world and forecast possibility and purpose moving forward.
Four factors of Black Swan purpose.
Some research is demonstrating that four factors are integral to the BSM goals.
- Being able for an organisation to make a decision with speed and high levels of efficiency, is more valuable to recovery and adaptation.
- Preparing a BSM contingence plan with a governance strategy that includes workplace reform, alternative supply chain resources and transient employee roles.
- Embracing, utilising and pushing technology to flex with change is imperative to success.
- The business and CEO value set that looks beyond profit margins and revenue streams and considers social wellbeing, emotional workplace support services and other non-technical outcomes of the crisis.
Thawing your Frozen Middle.
So, who should be part of your BSM team?
Look into the middle section of your business structure. Draw from this ‘frozen middle’ of talent the individuals that, perhaps your HR assessment screening ruled out. What a business ‘Frozen Middle’ brings to the BSM is:
- A focus on dynamics ahead of mechanics.
- Skills generated from ideas and creativity stimulation as this is what thaws the ice to make connection to the bigger organisational picture.
- Flexibility depending on what is needed- a job role, organisational level discovery driven or simply an attitude invested in the cultural objectives. It gives you your own gig based economy within your four walls.
The Black Swan must-haves.
In your BSM the team you might be looking for;
- The Devil’s advocate who argues the opposite.
- The Day Dreamer who sees problems from creative viewpoints, no matter the actual possibility.
- The Emotional Architect who watches the social impact of every action and reaction.
- The Catastrophiser who dooms and glooms all possible outcomes.
These outliers are the thinkers who can design the impossible and build a framework to hold your business together and have fast acting pace for any crisis that hits.
Of course, to do this we must re-think the importance of failure as a cultural positive within operational structures. A Failure Fund, crisis tool kit, what ever you want to call it, funds the BSM. It let’s us explore, create, innovate and design the survival mechanisms and the organisations non negotiable control points. It enables technology, that emotionally and operationally drives a business through the crisis and out the other side. What it can offer a business strategy is:
- The backing to the “Vision” statement that we try to learn and culturally embed the backbone to our vision- it’s about acting in alignment with a BSM belief, not just stating the rules.
- An opportunity to look at a world with no boundaries.
So, what happens when you bring the concept of a failure fund to an organisation? What are the separate roles fearful about? Well, we found out. In an actual coaching session with a large organisation this is what each manager identified as the blocks to integrating the concept.
Real Reactions to Failure Funding.
The CFO – “How much will it cost?”
The Entrepreneur – “Amazing, this is brilliant. How soon can we get started?”
The Product Development Team– “Awesome, but don’t go crazy we still need to satisfy some criteria!”
The Line Manager– “How much is to much and how do I keep it under control and not stifle creativity?”
The Compliance Department– “What critical control points do I need to make it work but not get it caught up in a process?”
Changing operational dynamic’s will always bring a level of trepidation and uncertainty. If we incorporate engaging the frozen middle of our business models, embed the Black Swan Model of Management into the strategic planning and embrace a failure fund culture, then change becomes the new normal, adaptation the new skill and humanistic leadership the style of management and ownership for the future.
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