Multiply options for the future: Research shows that when uncertainty is high, it’s best to multiply options for the future to avoid making decisions that close off options for things that will change later.
Airline example: When airlines think slow down, they may plan to lay off employees. The decision to layoff is hard to revise and get people back (closes options). They could furlough: don’t pay people but can call them back. Furlough comes at a cost to the airline (they risk losing people) and employees. Airlines may choose middle ground: reduced pay, keep paying benefits, with a commitment from employees to be there when called (opens options).
When making decisions under high uncertainty:
During crisis, priorities and goals change: We need to decide which goals we are willing to prioritize and which goals to sacrifice. Highly loaded people must deal with more work, changes and new goals due to the pandemic such as social distancing. People will need to pick-up extra load to cover for people who are out sick or quarantined.
- Healthcare example: Hospitals have replaced the goal of “providing everybody highest level of care” with “we will try to provide care."
- NetJets example: During Hurricane Sandy, everybody wanted to leave New York city at same time. NetJets also needed to move all airplanes out of the path of the storm. NetJets was getting overwhelmed with requests for their planes. NetJets could have taken advantage and raised prices or become inflexible on changes but instead they relaxed financial goals (pricing) to prioritize the goal to provide high service and by doing this, they built trust and gained future customer
Goals, priorities, requirements, policies changes to provide breathing room:
- What goals are we willing to relax? Where do we need slack, breathing room?
- What requirements or policies can we put on hold or relax to free capacity?
- General Foremen example: Consider administrative items taking General Foremen’s time, what can we postpone, move to another role, temporarily relax constraints on?
Minimize exposures and prevent rapid spread: Plan early how we will handle situations that require rapid response.
Minimize exposures and prevent rapid spread:
- What areas do we typically frequent that have high exposure?
- Example, convenience stores and fuel stations: what could we do to minimize exposures? Provide lunches – reduce exposures and add good will.
- Who are our “super spreaders”? What do they need to change?
- Example: Safety specialists use technology, Facetime, to connect with General Foremen (still do crew visits but use technology to supplement).
In dealing with uncertainty, the more difficult the threat, the more strategies are needed. The more uncertainty, the more the options need to be diverse.
- Frame out what’s happening in the world and explore how it could impact our business using scenarios.
- Example: How are we going to handle if we realize we have an exposed General Foreman and multiple of his crews need to call out sick or be quarantined?
- Example: What will we do if we can’t get trucks in for regular maintenance? Note many businesses are now taking advantage of this downtime. Airline maintenance facilities are slammed as airlines are getting airplanes checked and maintained.
- When designing actions and strategies to manage risks and uncertainty, break into smaller groups and ask them to come up with 3 strategies for this risk (open options).
- Identify critical business functions / key individuals / key processes that have single points of failure. Use a strategy used by the military to gather tribal knowledge, ask: what are the 3 things about your job that nobody at our company knows how to do? Write down what they are and how to do them.
- Example: Only this person knows how to…
- Example: Need the approval of this one person.
- Focus on what is urgent and will help us with the current situation.
- Distribute workload, make problem solving role and domain specific – let people who do the work, solve it. Include frontlines.
- What do we need to work on right now?
- Supplies: What do we burn through most quickly? Create static buffer.
- Example: special forces. A lot of their training is not direct fighting but is about communicating with each other when under increased workload and stress.
- What is our company doing to update our customer’s model of the situation? As a good team player, we could help them update their model. We can see what a variety of utilities are doing. This could help move us from customer – client relationship to partnership.
A customer conversation (or risk assessment) could look like this:
- What are you seeing? Weak signals?
- Here’s what we’re seeing. Here’s what we’re doing.
- What are you worried about? What changes are you seeing? What do you think you’ll have to do in response to those?
- What uncertainties are you facing? What’s important to you? What kinds of information would help you make better decisions? This helps us watch out for things that relate to what you are concerned about.
- What are the sources of risk that we pose to you? What steps can we take to mitigate those risk? (but don’t start here!)