Reflecting on July’s worldwide cyber outage should be an eye-opening experience. This article is not about technology or redundancy, but there are certainly nuggets that could be gathered in that bucket. This is about how a firm prepares for the hiccup or inevitable “rock in the road” that will occur in the business or on a project.
I had two observations from this summer that take center stage. The first was the football-field-sized queue in one of the major airports. That was hardly unexpected in light of thousands of stranded travelers. However, what was shocking were the two airport representatives servicing the overwhelming number of frustrated passengers. It is safe to say they probably had one of the worst jobs in the world that day.
Second, there was a gate agent in that same airport who was likely an established senior leader, judging by the color of their blazer. However, it quickly became apparent that this person was overwhelmed, and had no ability to make positive changes or even deal with the pressure of the moment. One could argue that no one is prepared for an unprecedented event such as the internet being turned off. On the other hand, isn’t it incumbent on leaders to equip their teams to prepare for the unexpected? Realistically, airlines are constantly playing “defense,” but there are so many instances when it seems like they are seeing a delayed flight for the first time ever.
If the pandemic taught us one thing, it’s that you never know what is coming down the line. In the last couple of years, it seems like everyone is collecting “unprecedented world events” like one collects baseball cards. The “that will never happen” scenarios happen with such frequency that we are almost numb. Yet, whether it is some massive “happening” or even a simple project roadblock, there appears to be a naivete that permeates even the most seasoned business leader. No one wants to always play the devil’s advocate, anticipating the worst-case scenario — if you aren’t careful, you’re quickly branded as the Debbie Downer (insert the blaring trumpet). However, there has to be a sense of realism in business leadership and project leadership: Worst-case scenarios have to be considered and anticipated. There is the old adage that you plan for the worst and hope/work for the best. Advice has never been wiser, but how many organizations have contingency plans that are articulated, strategized and implemented effectively and efficiently?
Business Scale
Reflecting on the pandemic may give people a bad case of hives. Whether it was thinking about social distancing, orchestrating effective supply chain management or considering the long-range ramifications of the firm’s backlog, there was no shortage of lessons learned. But how many businesses had that black swan plan that was expeditiously engaged when the first “quarantine” was engaged? Realistically, there were probably few firms, if any, that had a pandemic response kit. More than likely, it was stored with the zombie apocalypse kit.
However, while not every emergency will shutter the world, there are plenty of events or scenarios that will have a long lead-in to allow leadership to take the respective steps. For instance, hurricanes are relatively common events. By no means do I think that living through a hurricane is easier than a pandemic or cyber outage. The point is that tropical events normally provide some notice of their impending arrival, coupled with the “cone of uncertainty.” The closer the storm gets, the less uncertainty there is. But how many residents heed the warnings and spend the lead-in boarding up their windows, sandbagging their houses and leaving that location with their families? The majority of the population is proactive, but think about how absurd it is to see that one person boarding their windows as the storm rages on their doorstep.
Holding a sheet of plywood in a gale is certainly a daunting task. Yet how many businesses fail to spend the requisite time developing and gaming the what-if scenarios occur in their business? For instance, consider the following factors:
- Black swan event — Named by Nassim Taleb to describe highly unlikely negative events that are seemingly impossible to predict. While no one knows when or if a pandemic, financial crisis or world war will ever occur, there should be a “break glass in case of emergency” plan that at least provides the starting point for a business to consider. There are an infinite number of events that could occur on a macro-level, so the framework and action plan must be more generic, allowing for adaptability and allowances for specific conditions.
- Recessionary markets — While hardly catastrophic, recessions happen and will always be a part of any economic cycle. What does this mean for the business in terms of backlog, cost structure, crews and capital expenditures? While some leaders see a recessionary market as a time to hunker down, other will see this as an opportunity for strategic growth. Assuming there is enough preparation, astute leaders will capitalize.
- Customer/market attrition — Lose a customer? Not catastrophic unless that one customer is 50% of your business. But what happens if a sector disappears? For instance, what if your business specialized in tenant improvements for Blockbuster video stores? Not only did they go away, but the entire market vaporized.
These types of scenarios are also listed in terms of severity as well. The commensurate amount of internal deliberation should be reflected in the amount of time strategizing for the event. For instance, it is probably prudent to have more detailed mitigation plans to address losing a top customer/market as compared to the start of World War III. Ultimately, the job of leadership is to be forward-thinking and proactive.
Project Scale
Project managers, superintendents and foremen are some of the greatest optimists. Rainbows, unicorns and pots of gold are all we anticipate, yet every project ends up with stormy skies, dragons and a bucket of — ahem — lead. The greatest project managers constantly demonstrate forward thinking and, more importantly, an affinity for worst-case scenario situations. For instance, some of the following elements should be covered within your project risk register:
- Weather impacts — Weather is always a wild card, and it appears to be getting worse and less predictable. We certainly don’t control the weather, but are our productivity rates, schedules, etc., all based on best-case scenarios? What is our backup plan if we have unseasonable rain or snow? What are our hot-weather best practices?
- Supply chains — The pandemic taught us that nothing is standard or “off-the-shelf.” What do you know about the worst-case scenario for all aspects of your material supply chain?
- Trade contractor participation — We never like to think a critical trade partner will disappear, but what if that critical path trade partner goes bankrupt? Who is our backup plan?
- Municipality entanglements — While you can’t fight city hall, you better factor in the ramifications of how they will handle plan reviews, inspections, fees, etc.
- Customer changes — While no customer has ever changed their mind (ahem), this is more about the customer changing the script. What happens if the customer downsizes? What happens if your contact goes away?
Once again, scenario planning can easily become an infinite exercise, and the probability of each event must be factored to ensure the right amount of time is expended in “potential solution generation.”
Mike Tyson was famous for his quote, “Everyone has a plan until they get punched in the mouth.” We are certainly not privy to any backup plans the airlines, banks, etc., had in place prior to the cyber outage. The most proactive plan may have been sitting in a filing cabinet. Ultimately, the success of any plan will be measured on the outcomes. It is crucial for everyone to not only have a relevant contingency plan, but to also demonstrate confidence in the execution. Rather than cower behind the desk, everyone from the field to the top leader in charge has to act like they’ve been there before, even if they’ve never seen a zombie.
