What's The Worst Thing That Could Happen?

I was fortunate to be in a CEO peer group for many years and one of the best things I learned was to periodically ask the questions “what is the worst thing that could happen to the business”, and its more sinister corollary,  “what could put us out of business”. I’m not talking about basic things like running out of money, that’s a common concern for nearly every small and sometimes big business. I’m talking a self inflicted event within your walls or a seismic shift in the marketplace that blindsides you.

Of course no one likes to think negatively, but I found exploring unwanted possibilities could sometimes bring clarity and/or change to our company.  Many businesses...many successful businesses...have had a near death experience. For the fortunate that survive near death, this can became a powerful opportunity to strategically reposition the business. As Andrew Grove famously observed, only the paranoid survive.

True story. I recently met with a prospect whose whole business is supplying real estate data to its customers. I met with the partner of the firm responsible for IT. To be fair, he has other responsibilities as well and IT is not really his bailiwick.  But I was floored when I asked him “what’s your DR plan?” and he said “what’s DR”. I explained DR was shorthand for disaster recovery, at which point he told me he had no plan and wasn’t sure if he backed up his data effectively...at a minimum, he had never tested his back ups. But, he boasted, if they ever lost their data his firm would spend “hundreds of thousands of  dollars” to get it back because it’s their whole business. Really?

For this firm, the worst thing that could happen might be losing the firm’s biggest asset, its data.  While that IT head may indeed be able to spend his way into recovering his data, he may not. So for that firm, and the head of IT should he wish to continue his employment, there should probably be a better strategy to protect its data.

That’s an easy one. But what about the monsters lurking that aren’t so obvious. Take for example, the taxi business. Do you think pre-2009 anyone in that industry was asking the question “what can put us out of business? And if they did, was the answer something mundane along the lines of “the city raises our medallion prices”, or “there’s a prolonged strike”. Do you think someone wondered, “what if someone develops a smartphone app to capitalize on extra driving capacity, sources drivers and routes them to passengers in near real time by their location, and also optimizes pricing to match supply and demand.

And that’s the thing! Did any of us, let alone the taxi industry see Uber coming? Or 3D printing, or the cloud? Sometimes the signs are there and we choose to ignore or not believe them (remember Kodak?).  Sometimes our lack of imagination and creativity prevent us from seeing what the future may hold.  Our world is only going to evolve faster and faster, disruptive forces will escalate and whole industries will continue to be reshaped or even eliminated.

So ask yourself...what is the worst thing that can happen to your business? And what could put you out of business?