My Vistage members still talk about the Recession-Ready work I had them do back in 2006/7 after we heard from our Vistage economists who we follow that something big was coming, which turned into what we now call the “Great Recession”.
When do most people react to a recession? Day 1 of a recession! Which means it’s day 181 before CNN Headline News declares we are in a recession, because you need 2 quarters of negative growth to be technically defined as a recession. What chance do you have of being recession-ready on day 181 of a recession? None!
Not if you are in my Vistage Groups! I hold my members/groups accountable for being Recession-Ready before a recession. I get them to work on Plans ABCDEF:
- Plan A: Acceleration
- Including Who/What/How/Where/When/Why analysis, As-Is vs Could-Be
- Plan B: Business as Usual/Baseline
- Plan C: Consolidation/Cost-Cutting
- Plan D: Downshifting/Downsizing
- Plan E: Exit
- Plan F: Fold
Downloadable tool: Options & Futures Matrix v4
- Options are valuable because they create degrees-of-freedom to navigate problems and opportunities in front of us. When we have more options, we have more influence in choosing our future. When we don’t have options, our future chooses us. Are you choosing your future or is your future choosing you?
- Whether we are in good times or bad, the reality is that we face a combination of scenarios all the time in business, not least because of the different market segments we serve, the different products/services we offer and the different phases of the life-cycle which apply to these. So we always have the possibility of a portfolio of plans.
- The key is to do this scenario based thinking, to generate, develop and nurture a portfolio of plans and options. Even if we are in an emerging situation in which we predict Scenario C or D with increasing probability, there may well be the opportunity of some Plan A options we can be accelerating (a new product or service to create a new revenue stream, for instance), and certainly some Plan B options (additional focused efforts to retain existing clients, for instance) that can make a real difference – giving us more degrees of freedom to navigate the difficult phase ahead.
- Real options create real value – shareholder value.