How are you leading?

BANG! COVID-19 was a BANG!

Imagine moving along in time and suddenly, BANG! Something unexpected, unwanted or unforeseen happens. Your world is in disarray, disrupted, dislocated. Your team is confused, disoriented and forced to react.

But, does it have to be this way going forward?

Can we beat the next BANG before it even happens?

Wouldn’t it be great if you and your team could identify the situations that are most probable and get a game plan in place today?

What matters now is how you as a leader anticipate the situations going forward and rally your organization to address them now, get prepared now, plan now and engage now.

I was first exposed to the book, ”Left of Bang” by Patrick Van Horne and Jason A. Riley while visiting Texas A&M University about 5 years ago. It challenges the premise that we must wait until something bad happens before we react. Instead, it pushes us to consider looking forward to identifying situations ahead of time and then taking appropriate action. It is living left of bang instead of right of bang; it is living in a proactive instead of a reactive world.

You see, I have been solving big problems with clients for years. However, most problems were right of BANG – we were trying to solve problems that already happened with the hope that we could eliminate the same problem from occurring again in the future. Many times, it worked. However, my desire for any client is for them to anticipate future situations, craft a game plan and minimize the future BANG.

During the last 2 weeks, I have interviewed 52 leaders (C-suite to VP levels) from multiple industries, such as: artificial intelligence, chemicals, aerospace, machine shops, block-chain, logistics & transportation, financial services, water treatment, insurance, international finance, online media, municipal government, human development, family offices, information technology, trade associations, pharmaceutical, private equity, e-commerce and hospitals.

We engaged on one simple question: “What are the most challenging issues you are faced with today?”

Interestingly, most leaders have already looked past the immediate concerns and problems with COVID-19 and have started to look forward to the next set of issues around restart, renewal, refreshing, rehire, retraining, retooling, reinventing and other re-this and re-that.

Having spent the last few days digesting their comments, I offer a few “BANG” situations and some “Questions Worth Asking.” The resulting frame is based on my experience in industrial manufacturing, oil & gas, chemicals, aerospace, logistics and internet, so tailor the material for your own industry. I have not addressed changes in strategy or M&A, but mainly focused on the operations and execution of what is presently in front of leaders and their teams. I am not an expert in your specific industry, so I balanced the need for a general approach with the need for usefulness. It is a starting point for your teams.

Own your own BANGS!

BANG 1: Poor Financial Fundamentals

Situation:

There is great debate as to whether we will see a long depression (L shaped), slow restart (U shaped) or fast recovery (V shaped). The freshest data points to some segments being up in volume and many being down. We see bankruptcy, rent re-negotiations and supply chain disruptions. The impact seems to be market segment specific. For each organization, the financial fundamentals will be specific to issues like cash flow, margins, liabilities, etc.

Questions Worth Asking:

o  Will we have the cash to survive until the economy returns to a more stable rate of operating? Are you planning for the best case or worst-case scenario? Are you re-planning regularly, testing your assumptions and adjusting plans?

o  Who is managing each of the line items on your financial statements – profit & loss, cash flow and balance sheet? Do your teams all the way down to where the work gets done understand how they impact and trigger entries on each line item?

o  What does the 13-week and 26-week cash flow look like? Who manages, who reviews and what actions are being taken to reduce uncertainty?

o  Where are your stranded assets (inventory, rentals, leases, materials, receivable) that can be turned into cash?

o  What is the prediction for demand and pricing by segment, by offering, by SKU, location, customer, product, etc.? Who is accountable for working on this? What data can be gleaned from past customer behavior or current economic data?

o  What non-essential costs can you remove from your business?

o  What would a zero-based budget look like? If you did a clean sweep or blank slate exercise, what would you do differently to manage your finances?

BANG 2: Friction and Lack of Flow

Situation:

Most businesses are ultimately structured around flow. The flow of goods and services create value for the customer and the firm. Friction reduces the efficiency, speed, scalability and utility of the goods and services. The friction that gets in the way reveals itself as complexity, waste and variation in the systems, processes, tools, checklists, regulations and risk assessments that firms use daily. Much has been revealed due to the move to remote work conditions, reduction of work force, behavior of customers and suppliers and leaders.

Questions Worth Asking:

o  What can we eliminate? What is worth keeping vs. discarding in terms of a process, report, tool or system?

o  What can we substitute, combine or rearrange?

o  What can we adapt, modify or put to another use?

o  What are the roadblocks in the organization or what gets in our way?

o  What cultural norms, policies or procedures create friction?

BANG 3: Disrupted Supply Chain

Situation:

When looking at the entire supply chain from customer through supplier base, one can already see cracks in the foundation required for smooth restart. We already see the entire dynamics of the health and fitness industry being disrupted with the closure of some gyms and the push by online apps offering free trials to capture market share. The same holds true for some chemical firms where demand for auto parts has plummeted while packaging films and medical supplies are skyrocketing.

Questions Worth Asking:

o  Will your sales force still have access to customers for face to face selling and if not, what systems and workforce will you need?

o  Are any of your suppliers at risk of going out of business? Can you pinpoint those most at risk by looking at their financials, past payment history, inventory projections or other data?

o  With potential for less travel and in person interactions, how will you be able to maintain trust levels with customers and suppliers?

o  Are there critical suppliers that you might need to support via cash infusion or the providing of consulting/advisory services?

o   Since segments are not acting in tandem with respect to demand, how will this impact your entire chain? What materials are worth stocking?

o  What potential regulatory changes might impact your customers, firm or suppliers?

o  Are your contractual obligations clear to your organization for both customers and suppliers? What terms and conditions are in place, but being violated?

BANG 4: Disengaged Workforce

Situation:

With the move to work remotely, many people are disoriented. The banter at the water cooler is gone, coffee is sipped in isolation, masks cover up our smiles and frowns, and kids are seen running behind our Zoom calls. When people are disoriented, they struggle making good decisions, they are more fearful, alone, depressed and ultimately disengaged. They may also lack clarity, vision or have role conflicts with others. On the flip side, some people are more productive because they have fewer distractions, they can focus and are happy to be home with family.

Questions Worth Asking:

o  How can leaders be clear with vision, expectations, timelines and roles while giving people autonomy to produce and contribute?

o  What are your best leaders doing to increase trust and create emotional safety for their team members?

o  What structured cadence or routines are in place to create a sense of belonging and regularity?

o  How are you engaging the teams on the tools and equipment they need to do their job?

o  What ways are your leaders showing they care about and recognize their people?

o  What opportunities do leaders grant to their people for growth and learning during this disruption?

o   What do your team members need from each other and are they pulling as a team, providing quality work to others and helping one another?

o  What training or learning events can you put in place now to help improve your team’s capabilities?

BANG 5: Lack of a Decision-Making Process

Situation:

During times of high change, the information may be uncertain, and our state of mind becomes frozen. We struggle to make good decisions. Most leaders make decisions based on the best data and information available; however, we have a lack of good information today with large uncertainties. Not having a good decision-making process can paralyze an organization.  

Questions Worth Asking:

o  Are your leaders providing clarity in terms of the real problems that need to be solved? Are the problem statements clear, concise and comprehensive?

o  What process is used to evaluate or assess alternatives? Are the criteria agreed?

o  What information is needed to help make the decision?

o  What are the assumptions being made along the process and are they documented and transparent? How can the decision process be transparent, so others can feel more confident in the decision?

o  Who has what decision rights? Who needs to be involved in the decision vs. informed or consulted?

o  What validity or verification level for the data inputs is good enough to make the decision? What options are available to make corrections once a decision is made?

The Challenge:

As a proactive leader, use a simple 3 step approach with your team:

1.      IDENTIFY: Identify and frame your own potential BANGS. These are issues, problems or events that have a high probability of happening and would have significant impact on the organization.

2.      QUESTION: Brainstorm a list of specific “Questions Worth Asking”, collate them into reasonable groupings and risk rank or prioritize them.

3.      PLAN: Get a plan together and determine who will work on what and by when.

Many thanks to the authors of “Left of Bang”, especially https://www.dhirubhai.net/in/patrickvanhorne/

Best Regards,

Ken Wiesinger, Ph.D.

https://www.dhirubhai.net/in/kenwiesinger/