By: Colonel (retired) Michael Loftus

Already in the first decades of this century, the world has experienced several black swan events that need no introduction for anyone reading this. We came away with new perspectives of “disruption” and “normal”. Organizational leaders also came away with a new appreciation for the challenging, but essential work of building system resiliency and mitigating risk.

Even smaller periods of change, disruptions, or unexpected innovations can challenge organizations and many of them respond in similar ways. Some may default to taking no action at all, choosing to wait it out and hope normal will become normal again (the ostrich approach). Others will take drastic, reactionary changes based on the false assumption that the volatility will never correct itself. Then if things correct or change again, they’re left wondering why their immediate, seemingly courageous, actions didn’t work for them (the Chicken Little approach).

Mike Loftus facilitates small group discussion
Colonel (retired) Michael Loftus facilitates a small group discussion.

The most prepared organizations will take a pause, assess the real threats, consider new opportunities, and confidently act with a sense of purpose. These organizations and their leaders have planned for disruption and change and are prepared with the risk mitigation tools they need to make the best decisions at the right time.

There are countless decision support and risk management tools available to leaders through a simple internet search. Unfortunately, many of them oversimplify the inherently complex decision making that leaders go through, especially during periods of change when the stakes are high. Even worse, some of them only focus on avoiding failure and not on the inevitable opportunities for growth and innovation that come with change.

Leaders need clear insights, actionable intelligence, and effective decision support tools together to build effective strategic plans that prepare for change and innovation. Tools alone won’t get them there, but it’s still valuable to know which ones can be employed for what purpose. Two that I’ve found useful during my career in military decision-making and that Aimpoint Research uses in our services are the Composite Risk Management tool and Decision Support Matrix. Both rely on a foundation of good intelligence and are utilized best in partnership with strategic and scenario planning.

Build Resiliency

Composite Risk Management is a process tool to identify challenges to your current plan and evaluate the probability and severity if risks materialize. It will also help you assess potential mitigations to reduce the severity of a risk. Generically, the process considers internal, market, and competitor risks and seek to identify the most impactful or most likely to occur based on research.

Rather than solve every possible concern, which can be paralyzing, it is better to develop the actions that address the most dangerous or likely risks. Organizations can be comfortable that the most dangerous or likely scenarios they will face are adequately assessed.

A good starting point is a threat assessment using direct competition and common market/industry factors and assessing in time how impactful the threat will be to your organization. The next step is to apply countermeasures to each threat to reduce their impact or make the probability of occurrence decrease. Thoughtful analysis will lead to the development of items that can simultaneously address several threats. These actions become priorities to resource. The Composite Risk Management tool serves to share perspective and interpretation of the business environment; it becomes the shared language for understanding the complex nature of your world.

Increase Adaptability

The Decision Support Matrix is a tool that can enhance a current plan. The process accepts that future decisions will not be as obvious as expected and its approach is to first define external (consumer or market) conditions that may occur, then identify anticipated internal conditions expected. The planning team develops several potential futures that will encourage organizations to consider how to adjust their current plans as situations occur. In developing the external conditions, organizations must consider the entire host of possibilities that may be expected as well as different internal conditions. The anticipated next steps become the basis for specific decisions that the team should consider when confronted with a need. Effectively, this is scenario planning using a tool that enables shared understanding and encourages organizational awareness in a broad sense.

Again, a deliberate threat assessment assists in focusing on the most impactful potential “ifs”, but it can be equally powerful to have the different perspectives within an organization share what they see individually as potential challenges. The goal is to find the challenges that are most likely to occur and those most impactful to successfully executing your current plan. The second step truly helps organizations in preparing. In extremely dynamic situations, the decision matrix becomes a playbook enabling informed action.

Don't Be an Ostrich

Does your organization have a plan? Is it built on assumptions about the future or intelligence? Is it built to capitalize on volatility so your organization can grow during challenges? If you can’t answer yes to these questions confidently, it may be time to rethink your approach.

The Composite Risk Management tool and Decision Support Matrix are designed to be employed quickly and efficiently, and our team at Aimpoint Research can assist in applying them in the way that makes the most sense for your organization. Regular threat assessments and strategic planning can also have a huge impact by building resiliency and adaptability that will allow organizations to seize opportunities as they emerge. Benjamin Franklin summed it up well. “By failing to plan, you are preparing to fail.” Don’t wait to act and don’t fall victim to the false assumption that change ever goes away. 

Plan for change and build organizations that not only survive during volatility, but ones that thrive.

As Director of Strategic Planning, Mike Loftus works to integrate the latest military strategic planning methods with the company’s intelligence capabilities to create a best-in-class service for clients. Originally from Massachusetts, Mike retired from the U.S. Army after 23 years of service where he specialized in strategic planning. He served as a Strategic Studies Analyst for the Chief of Staff of the Army and as the Commanding General of the Corps of Engineers’ Strategic Planner, where he worked on national-level defense and security issues. He holds a Bachelor of Science in materials science and engineering from the Rensselaer Polytechnic Institute, Master of Arts in history from the American Military University, and Master of Arts in strategic studies from the U.S. Army War College. Learn more about Mike.

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