7: Limit handling

Even with good planning, foresight and management information, unforeseen things can still happen that threaten the business.  In our analogous car, we may be driving slowly and cautiously because it’s a frosty morning, but we may still not be able to avoid hitting another car skidding out of control towards us.  All we can do is try to minimise the impact and the effect.

More passionate drivers will try to understand how the car behaves in extreme circumstances by taking limit handling training, essentially pushing a car right up to and over the edge of traction in a controlled environment so that they start to recognise how much grip they have, what the car feels like as it approaches its limit and how to collect control again afterwards.  These exercises generally have two effects on drivers: first, they make them slightly more cautious, particularly of different conditions and second, they give them valuable time and understanding when disaster does strike: the reaction is more likely to be better judged and more automatic.

This is easy and relatively inexpensive to arrange as a driver, but not so easy to replicate for our company.  And yet the same unforeseen circumstances can occur, so how do we hone our skills at dealing with them? 

Firstly, be curious and talk to businessmen who have crashed, taking their businesses beyond the edge and into either Liquidation or Administration.  Find out first-hand what the warning signs were, and in retrospect what actions they might have taken to have avoided the situation.  Don’t just listen to these people and feel sympathetic, or worse, gloat because it hasn’t happened to you.  Overlay the scenario on your business and make note of how the warning signs might appear to you.  And then ensure that you watch for and act on these warning signs.  In our panel of instrumentation, this might be a low-oil light: a simple and significant warning to take an urgent action.

Secondly, make use of scenario planning and mitigate recovery from potential disasters.  The simplest example of this is backing up computer data in case of loss, but a more complex example happened to friends whose whole premises were razed to the ground one night.  Employing hundreds of staff and with a large number of clients reliant on their services, it was a testament to their skills in disaster planning that they had a replacement server up and running and office staff managing business as usual in a rented office within 24 hours. 

If you would not fare so well, then it is probably worth setting some time aside to think about what safeguards need to be put in place.  And then put them in place!

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