In an earlier BLOG Post, I noted the following insight I grew to appreciate:
We should not just talk about risk, we should incorporate the notion of uncertainty too. More situations that (or we care about) impact us are better considered as “uncertainty” type situations than risk ones (I will use the acronym of U&R to indicate this learning). The notion on focusing on ways to manage uncertainty is a major insight for for my OD practice.
U&R in TM can show up in a number of ways, these include: we are missing potential shifts in internal demographic shifts; we don’t anticipate external market supply shifts; and competitive shifts weaken our relative TM position.
The very notion of uncertainty, is we don’t really anticipate (the Black Swan) it, or we can foresee the possibility but we can’t appreciate its likelihood (the Grey Swan). So, how do we build a strategy that anticipates that the unanticipated can and does happen?
I have approached this issue with clients by developing two forms of strategy implementation insurance:
- First, is to have multiple sub-strategies to execute implementation. A key feature in these multiple sub-strategies is they meet the “variable cost” test. That is they can be evoked as , when, and to the degree necessary without carrying a fixed cost burden. The benefit to the client is they improve access while minimizing “sunk costs” for having this multiple access available.
- Second, is to minimize U&R exposure by changing how we use the critical talent. If we can focus the use of talent to those efforts that uniquely require it we can optimize performance and productivity. By improving productivity, we can achieve several benefits: makes better use of the talent which often has the benefit of improving engagement by the people with this talent (people appreciate their talent being well utilized); reduces the need to go to market (less often &/or for fewer talent resources; frees up locked in working capital for other potentially more beneficial uses; and, provides greater economic/financial basis for being able to more successfully bid for resources.
What is interesting with this approach is it is almost universally applicable to any strategy issue. Building flexibility in implementation/operation and enhancing economic/financial capacity are usually deemed desirable features.
Because of the TM description I have adopted focuses on effective access and use, the two forms of “insurance” are easy to consider because they invite this consideration.