This act of creating imaginary situations and preparing for their eventuality regardless of how remote they seem makes a business leader ready for any eventuality.
Of course once you find out the worst that can happen, your next big role is to make sure it does not happen by wise planning.
This helps you to think of measures to bridge that huge gap even as you think of strategies to make sure it does not happen
It is said that Alexander the Great, the ancient king of Macedonia, would often stop in the middle of something and ask his generals; ‘‘Supposing an enemy attacked us from this or that direction, how would we respond?”
His team would figure out all possible strategies of neutralising the imaginary enemy.
This is called crisis thinking and is one of the attributes of a leader. It is the ability to envision a possible crisis and strategically plan in a way that does not lead to loss or endanger.
This act of creating imaginary situations and preparing for their eventuality regardless of how remote they seem makes a business leader ready for any eventuality.
It involves figuring out or looking ahead and asking, “What could possibly change or go wrong that would adversely affect my business?’’ For instance what would I do if I lost one of my key employees, a key customer who accounts for most of my sales, or if my product suddenly becomes outlawed or obsolete to the extent that I can no longer sell it? Every person can benefit from this line of thinking. For instance, what would you do if you lost your job, investment or some other treasured thing?
Looking at life from this perspective is not pessimism. Rather it is a realistic way that prompts planning and preparedness for any eventuality. It is what author Harvey Mackay calls digging the well before you are thirsty.
It makes one make well thought out decisions when faced with challenges. Failure to think ahead and consider all possible worst case scenarios in advance makes you vulnerable to shock, fear, and confusion if something went haywire.
Although we all go into a venture with optimism that all will go well, it is important to accept that all can go wrong.
In this case you need to find and reconcile with the consequences.
Of course once you find out the worst that can happen, your next big role is to make sure it does not happen by wise planning.
Two critical areas of business that most people make errors when forecasting is revenue and expenses. There is always a tendency to overestimate revenue and underestimate expenses. The consequence of those twin errors is disastrous.
Most experts advise that when planning, it pays to consider a situation where expenses go up three times and revenue shrinks to one third of the projection.
This helps you to think of measures to bridge that huge gap even as you think of strategies to make sure it does not happen. It makes you adequately prepared both physically and psychologically.
Mr Kiunga is a business trainer and author of The Art of Entrepreneurship: Strategies to Succeed in a Competitive Market.
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