The post image for this article shows a core drill from the construction phase of my house. I want to use this example to show that things go wrong - in other words, Murphy's Law applies. I then transfer that to a few simple thoughts that have helped me run my business.
Why is there a hole in the core? Because pipes for a residential ventilation system were laid in the ceiling. Then the concrete was poured. And it turned out that the hole for the bathroom downspouts didn't quite fit, so they had to re-drill. And then it was kind of obvious that one of the pipes was hit nice and centered. I kept the drill core because it shows nicely why things go wrong in real life:
- Everything looked good in the plan.
- The masons, however, seem to have strayed a few inches from that.
- The pipes were not listed, so drilling was somewhat of a "gamble".
- No one talked to anyone before the drill.
This could have been avoided by controlling the implementation, communication between the actors and adjusting the plan. In the life of a contractor, the interactions and complexity are incomparably higher than in this construction example. It will therefore not be possible to take everything into account in advance during planning. Rather, it is important here to a) identify all relevant risks, b) discuss manageable measures, and c) regularly review both and adjust as needed. The process can look like this:
- Relevant risks: as an entrepreneur, one should know the risks that can affect the continuity of the company. There are both external and internal risks to consider. I will highlight the internal risks in another article. Typical external risks are: global crises, such as the financial crisis (it doesn't always have to be a pandemic that leads to the postponement of expenses), market entry of a competitor with a better product or fighting prices, failed integration after a company acquisition and the resulting exodus of key employees.
There are certainly more here and in appropriate round these can usually be adequately named. It may make sense to establish one person or team as the "devil's advocate" that is tasked with being "paranoid". Limiting it to one person or team is important so that doomsday thinking does not spread throughout the company (this is a typical internal risk).
- Focus and communication: The list of risks must be prioritized. Because it will hardly be possible to address them all. After all, the main task of a company is to bring great products to the market and not to worry more and more about risks. It should be named which risks are likely, which ones would particularly hurt and what can be done about them with reasonable means. For example, the entry of a competitor (which will inevitably happen if you are successful) can be countered by good customer relations, a clear roadmap, and continuous innovation. The risks as well as the related measures should be communicated regularly and in an appropriate manner (this is again a separate topic).
- Review and adjust: the risks themselves should be reviewed 1-2 times a year. More often is not necessary in my opinion, otherwise you lose focus. The measures themselves should be looked at more often - are we doing enough, for example, to be ahead of the game, how do we determine this (define key figures!) and where do we need to readjust.
When this is taken into account, Mr. Murphy can even become a welcome guest to ensure that you don't rest on your laurels and keep moving forward.