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Rapid Business and Family Preparedness in 7 Easy Steps: Most Likely & Most Dangerous

When thinking about what you need to do to be prepared – be it for a disaster, an unexpected economic change, or anything in between – there are many factors to consider.  Some organizations spend millions of dollars answering, “What should we do… where should we invest our time and resources… what preparations will actually pay off?”  But you can start with a simple method that is relatively quick to get a 60% solution.

Keep it Simple: It’s about the “Most Likely” and “Most Dangerous” things

Disaster preparedness is essentially just a specific case of risk management.  This rapid method comes down to asking yourself two questions:

  1. What are the bad things most likely to happen?
  2. What are the bad things that are the most dangerous?

Answering these questions will allow you to recognize a list of hazards that you can then plan time and resources to either avoid, transfer, mitigate and ultimately accept the risk.

A Rapid Checklist – Everything You Need to Know, Up Front

You may be reading this because you need a very rapid checklist for preparing yourself, your family, or your business during the current coronavirus situation.  So here it is up front, an abbreviated list.  If you want details, they are provided afterwards.  I have also provided a Rapid Preparedness Checklist in pdf format (embedded below).

  1. Write down your top 2 goals and include a time period for these goals.
    Ex: “I want to keep my business running for the next 6 months.”
  2. For each goal, write down the top 3 most likely hazards that could disrupt your goal (even if they are not that disastrous).  Follow your gut and keep observing the situation.
    Ex: “My employees are all sick or otherwise unable to perform their functions.”
  3. For each goal, write down the top 3 most dangerous hazards that could disrupt your goal (even if they are unlikely).  Follow you gut and keep observing the situation.
    Ex: “The Internet goes down and I can’t collect payments, telework, or deliver service.”
  4. For each of the above 6 hazards, brainstorm on what you could do to avoid that hazard, reduce the danger of that hazard, or pass that hazard to someone else (that you trust) that can protect you from it. (These things are called controls.)
  5. Estimate how much time and resources it would take to implement those controls.  Also, estimate what other things you could do instead of spending those resource on preparing.  Don’t forget that “buying a bunch of stuff” is NOT a control by itself.  Don’t forget to invest in steps to ensure your organization can perform well in a crisis.
    Ex. You determine it would take 3 weeks and $10k to install a backup generator system (but you also find that spending a lot of money on a backup generator will prevent you from buying enough raw materials to keep producing your products).
  6. Decide which of the controls you will implement, and which you don’t have the time or resources to control.  Keep in mind that spending resources on preparing is trading away resources you could be spending on other things… you must make the decision on which is more important in your situation.
    Ex. You decide that investing in a backup generator will be too costly in terms of opportunity and resources, but you do decide to have backup physical cash on hand to enable you to make and take payments at your point of sale.
  7. Continuously observe the situation and scrutinize the information (the source, the validity, and make sure you know what assumptions your source is using).  Periodically update your list of hazards and review the actions you are taking to control them. (Suggested: once every 1-3 weeks for “most likely,” and once every month/quarter for “most dangerous”)
Lantern Rapid Preparedness Checklist

Step 1: Start With What You Want

As always, with risk management you must start with “What do I want?”  This is a KISS method, so we need to keep it simple.  But you do need to briefly consider/discover/revalidate your goals before you answer the questions above… otherwise you will be preparing for the wrong thing.

Your Mission, Your Goal

What is your goal?  What do you want the world to be? This method could apply to almost anything in your life, so here is a list of some examples… but you must do this part for yourself!

  • I want to have a steady income for the next 12 months
  • I want to ensure my family can meet basic needs for 6 months if I lose my job
  • I want my business to continue serving customers
  • I want to be able to communicate with colleagues, friends, and family
  • I want to be able to manage an ongoing personal health condition

When?

What time horizon… 3 weeks, 6 months, 5 years… for what period do you want to prepare (and how much time do you have to prepare)?

Start with an answer to this part, but then be sure to come back to question after you have determined how much time and resources it will take to achieve.  You may find that you don’t have the resources to sustain a long time period, so that may help you find other – more reasonable and practical – ways to control the risk.

Hazards: What could get in your way

In risk management, a hazard, is anything that could impact something you want.  For example, if your goal today is to eat lunch at a restaurant, then a hazard would be forgetting to bring money.

Hazards can be very specific or very broad.  You will need to strike a balance.  Very specific hazards can allow for very specific solutions (typically at a lower cost).  But being too specific may mean that your solution is too specific, and therefore wouldn’t help should another hazard manifest instead.

First I will show how you might typically determine hazards.  You will see that this can create a very large list of “bad things that could happen” and become overwhelming.  Then, I will show you the point of this article: how to select a few of the most likely and most dangerous hazards – and focus on those.

Usual way of discovering hazards

Consider a goal:

Goal: “I want my business to continue serving customers.”

Now, make a list of things that could get in the way.  Typically in risk management, in this step you would need to try to discover every possible hazard.  Here is an example list:

  • Staff gets sick
  • Customers can’t get to your point of sale
  • Culture taste changes; customers don’t like your product anymore
  • Your payment collection system fails
  • You can’t get raw materials to create your product
  • The price of raw materials or labor increases so high that you cannot offer the product at a price low enough for people to buy it
  • Your store catches fire
  • Your store floods
  • Your store is vandalized
  • A health inspector shuts your business down
  • You forget to renew your business license
  • The government forces your business to close, change locations (i.e. zoning laws), impose different product quality standards, pay higher property taxes, etc.
  • … (a lot more items could be included in this list!)

This is already overwhelming.  Especially if you haven’t ever thought about preparing.

A simple start: What is most likely? What is most dangerous?

The point of this article is to suggest that a quick way to get started with being prepared is to focus on two types of hazards.

  1. What hazards are most likely to occur?
  2. What hazards would be most dangerous to my mission, should they occur?

The idea is that, because you don’t have the time or resources to mitigate every single hazard (note: NO organization or family can mitigate everything, so you aren’t alone), this will allow you to prioritize, take some mitigation steps, reevaluate, adapt, and still have time and money left over to continue normal operations while being prepared.

Considering these two categories of hazards isn’t a new idea.  Many U.S. military risk management processes use these methods to conduct shorter-term risk management, for example before executing a specific mission.  Many other risk management paradigms include this type of questioning, although it might take a different form.

Step 2: Hazards most likely to occur

The first step in this simple preparedness method is to consider what bad things are the most likely to happen.  These may be things that, should they occur, might not actually “hurt” that bad.  You do want to strike a balance… you don’t want to come up with a list of things that wouldn’t hurt at all, but you do want a list of the top 3 things that you couldn’t ignore and that are most likely to happen – based on the information you have.

Note: you will never have all of the information… nobody does! (And I mean nobody – not a person, not a government, not an organization.) But you can look for information, scrutinize how accurate it is, and you can definitely follow your gutYour intuitive brain is actually very good at making judgements about what is likely to occur. All you have to do is keep observing and keep scrutinizing what you see… your brain will do the rest almost subconsciously!  Trust yourself… nobody can make these judgements better than you… YOU are the most highly qualified expert here.

Given our example goal above, here is a possible list of the most likely hazards, given the environment of today (April 2020, coronavirus pandemic in the United States).  Again, this list must be tailored to your circumstances and your goals, so this is only given as an example.

  1. The government has forced your business to close, change hours, or change the way you deliver your product.
  2. Your employees are unable or unwilling to perform the tasks fundamental to your business.
  3. Your cash-on-hand or other resources (i.e. raw materials) are low, which could lead you inability to produce your product or could threaten bankruptcy (despite any promise of government assistance).

Step 3: Hazards most dangerous, should they occur

The list of “hazards most likely” will probably give you the most return on investment.  Therefore, you would be wise to focus most of your time to those.  However, that list tends to only cover your short-term thinking.  This is natural because you will have the best information regarding the short term.  A more difficult task can be to consider the hazards that are medium and longer term.  If the list of “short term, likely hazards” is long, the list of “long-term hazards” is the longest, because there are so many possibilities in the future.

This is one major reason why considering the most dangerous hazards can be useful.  Because there may be a lower chance that your preparedness will actually pay off, you need to focus your time and resources only on the most dangerous things that can occur.  The good news is that dangerous (i.e. fatal, crippling, destructive) hazards tend to not change that often.  Therefore preparing for them can be something you do once or twice, and you are set for a long period of time.  This is a benefit of the “most dangerous hazards” list over the “most likely hazards” list, and why doing both can cover many situations.

Just as with the “most likely hazards”, you will start by observing the world around you. This time, think through your inherent weaknesses or vulnerabilities… the things that – due to your nature – could be fatal, crippling, or destructive.  If you have time and resources, you can expand this observation to things that are not inherent, but if you are very limited in resources – then focusing on things that are inherent by definition don’t change often and can help you conserve.

Note: same as the note above, you will never have all of the information… nobody does! But you are the most qualified person to “know thy self” – to know the critical weaknesses of yourself, your family, and your business.  Continue to observe, scrutinize, and listen to your gut.

Given our example goal above here is a possible list of the most dangerous hazards, given the environment of today (April 2020, coronavirus pandemic in the United States).

  1. A sustained loss of electricity impacts your ability to run your business, collect payments, support your employees, and support yourself.
  2. The medium and long-term economy significantly changes as more people telework, isolate, and change shopping habits for 12-18 months, leaving your product or service unwanted, unaffordable, or otherwise obsolete.
  3. [I am going to leave this one blank… what would it be for you?]

What To Do (or do not) About It

The next step in risk management is to do an in-depth analysis on the impact and exact likelihood of each of these events.  But this is “rapid risk management,” so we aren’t going to take 3 months to do this.  Instead, lets use one of my favorite tools, the Likelihood vs Impact Chart.

An easy-to-use risk management chart can help you keep track of your most likely and most dangerous hazards. Your most likely hazards will tend to be more on the right side. Your most dangerous hazards will tend to be higher on the chart.

Throw each of the 6 hazards up on this chart.  Close enough is good enough here.  Likelihood describes how likely it is that the event will occur.  Impact means – should this event occur – how much would it hurt your goal?

Step 4: Brainstorm controls

For each of the 6 hazards identified above, brainstorm things that could be done to reduce the likelihood or impact of such an event (these things are called controls).  If you are using the Likelihood vs Impact Chart, you are trying to see if there is anything that would push the hazard down and to the left.

Remember that sometimes “doing nothing” can be the hardest (but most effective way) to “do something”.  Doing nothing can make you feel like you will suffer great loss, and can be an overwhelming source of public/external pressure – others may think you are being negligent (or may simply be awaiting an opportunity to criticize/attack you).  However, “doing something bad” is 10x worse than “doing nothing” in any case.  If you are going to “do something”, make sure that you are being honest with yourself – that you aren’t doing it simply to make others believe you understand and have accounted for that situation.

Your biggest asset is your people… not a bunch of stuff you bought

Avoid this pitfall: don’t buy a bunch of stuff as the sole way to control hazards.  Things you buy (raw materials, consumables, rental space, etc) have some sort of shelf life or upkeep cost, and they introduce a different hazard: a false sense of security.  Supplies are important, but they won’t be of any use if you don’t know how to get them to the right place, or if you bought widget A and widget B is needed during the crisis.

Instead, ensure that your organization is competent under fire in addition to stocking supplies.  Ensure you are investing in your people and in the way your people work together.  I’m talking about individual training and organizational structure.  Do your people know what to do when a crisis hits?  Does your organizational structure allow for local decisions to be made on a local level?  Are your people adept at performing that way?  The best organizations don’t practice some “new way of doing business” once a year, they live it every day.

During a crisis, it will be the local creative initiative that actually solves the problem.  If your plan is to wait for the government or your central distribution center 300 miles away to hand deliver you an N95 mask, you don’t have a good plan.  By their very nature, large organizations that rely on centralized control are slow to react, slow to solve problems, and cannot implement a single plan that fits well in all locations.

And yes, this applies to families, too!

Step 5: Estimate cost of “doing something”

So, you have a list of possible controls for your 6 hazards.  Now you need to estimate how much they will cost you to implement.  Consider:

  • Time
  • Money
  • Trust (will you break any promises?)
  • Opportunity (will you not be able to do something else if you decide to do this control?)

Step 6: Make control decisions and trades

This is it: this is the point where you will need to spend precious resources that could be used now in an attempt to avoid pain in the future.  It may not work out, you may never get those resources back.  With each decision, you are making a trade.  Here are some tips:

    • Think hard about it, then take a break, stop thinking about it for 24 hours, then come back and finalize your decision.  You brain does some amazing things while you sleep – if you allow it to.
    • Fear can be an important instinct, but it can also overpower your other instincts that you may need.  Be mindful of how much fear is influencing your decision.  It is OK to make a trade decision based on fear.  But at least know if that is why you are making such a trade; don’t mistake fear for logic.
    • Logic can be an important process, but it is also susceptible to falsehoods, fallacies, and poor assumptions.  It is OK to make a trade decision based on logic, but make sure you know what assumptions you are making, and that you have more than one source for your decisive information.
    • Pencil in a decision – write it down.  Then take that and talk it out with one or two very trusted people in private.  Explain to them your mission, the hazards you found, the possible controls, the estimated costs… say it out loud.  This can help you think through it yourself, and it can help to get constructive feedback from the other person.  Later, put the decision in ink.

Step 7: Periodic Review

Some things change, and some things change faster.  You will need to occasionally review each of the steps to revalidate your conclusions, update your plan, and adjust your actions.  But avoid changing your calculation on a daily basis.  Changing too often leads to panic and misallocation of resources, especially when so much information changes so quickly.

Remember, people have been doing this for thousands of years, before the days of instant communication, instant data analysis, and instant payment options – and you are proof that it worked.  Slow is smooth, and smooth is fast.  The accurate information will tend to remain day after day, week after week.  Observe overall trends, but don’t fixate on individual data points.

I recommend that for the “most likely” hazards you review them every 2-3 weeks during “normal” times.  During coronavirus, consider reviewing them weekly.

For the “most dangerous” hazards, you should review them less often.  This is because if you have picked the correct hazards then they should relatively insulated from day-to-day changes.  The most dangerous hazards are tied closer to the inherent qualities of your organization.  I recommend a review once a quarter or twice a year during “normal” times, and perhaps once a month during coronavirus.

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