Dear Business Leaders,
You've doubled down on your Ecomm strategy, changed your business model, furloughed your staff, canceled or doubled purchase orders, rehashed last year's product and turfed all your forecasts, now what?
I have found this exercise to be really useful at getting everyone on the same page before navigating tough or unknown territory. I will often use it during Executive deadlock decision sessions or strategy development workshops. This exercise can be done individually by leaders as pre-work, then enhanced by discussing in cross functional groups. I call this 3-step exercise "Truth AND Consequences".
Benefits:
- This activity allows groups to move forward and make decisions with a shared, documented and accepted set of baseline facts and assumptions. It's incredible the number of times dysfunction can be traced back to an underlying disagreement on the "facts".
- Just by talking about the truths and assumptions facilitates objective and constructive dialogue about consequences and then action plans.
- Documenting your organization's thought process through this method also allows you to quickly make changes to the game plan when things change again or when doing hindsight reviews.
Truth & Consequences Exercise
Step 1 - TRUTHS - State objective facts about the situation or assumptions that you are making about the future
It's important to be clear with "what we know to be true about the future". The more clear and transparent we can be about our facts and assumptions, the easier it will be to understand what logical conclusions can be drawn from them. It's also much more likely that the entire group will accept the findings.
- Have the group list out all the known facts & assumptions about the future within the planning horizon.
- Prepare for A LOT of discussion. Avoid ratholes if possible. I recommend time-boxing this step and having a parking lot for out-of-scope topics.
- Don't worry about weeding anything out at this point. The key is creating a common understanding.
Step 2 - CONSEQUENCES - Ask "What does this mean for us?"
Next step, list out the intuitive or logical future impacts and consequences that can be drawn from the TRUTHS in the previous step.
- Your business may already be experiencing some of them. They can often be your current pain points, but amplified.
- Try to find other consequences not yet surfaced or discussed. Many may arise from "inconvenient truths".
- It's key to bring forward anticipated issues within the next 4-12 weeks.
Step 3: INSIGHTS + ACTIONS - Create some powerful insights and proactive actions.
Take a moment to let it all sink in. Maybe even take a lunch or a coffee break. This allows for some subconscious processing time and digestion of the first two steps.
- Bring the group back together and brainstorm proactive measures the team can take to mitigate or respond to some of the anticipated consequences.
- Teams can then refine, cull and prioritize these into a real operational response plan for the next 4-12 weeks (or any other future time horizon).
Try it out!
Try it out with your teams. I prepared a sample run through of the exercise below with a "Supply Chain & COVID-19" hat on, but it will work with any team or any problem. I hope it illustrates how to apply this response planning method to COVID-19 and other unplanned events. I'm happy to answer any questions and would love to know how it goes!
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Truth and Consequences - "COVID-19 Example"
Truths & Assumptions
- Civic shutdowns will persist, but there is talk of opening up businesses again.
- People are concerned about the effects of a 2nd wave of infections and subsequent re-shutdowns.
- A proven vaccine and distribution will take 12-18 months. It is also not guaranteed that a vaccine can be developed (think of the common cold).
- Many people have lost their jobs and have used up much of their emergency savings.
Consequences
- We cannot predict when normal life will resume and if/when there may be future civic shutdowns or disruptions.
- Demand will be stop-start, some overwhelming, some under. We'll be continuously course correcting.
Powerful Insights
- Making accurate forecasts (forecast accuracy) is a fools errand at this point.
- Time will be better spent improving our demand sensing and operational responsiveness to large fluctuations.
Proactive Action
- We will build more flexibility into our supply chain response so that we can rapidly adjust to what will be unpredictable, real-time demand.
- We will assign teams to develop "+/- 50% FLEX" plans that build extra variability capacity across the areas of labour, storage, suppliers, line production capacity and transportation.
- We will also implement a system of daily or weekly virtual stand-ups with suppliers/customers/operations to detect changes in demand quickly and communicate them upstream.
- We will establish a central cross functional operations response unit (S&OE) that will monitor realtime feedback and have authority to put "+/- 50% FLEX" plans into action.
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