Managing the Failure Points

Over the years (decades), I have been asked for tips on starting a business to the perfunctory cocktail question of 'What do you do'. To both, the answer is the same I manage failure points.

That tends to end most casual cocktail conversation with an odd stare (which is fine by me), but with a little explanation, I feel it's an accurate description of not only managing a business, but of most processes in life.

There are three steps to this methodology:

Identification - first and foremost you must be able to identify what is most likely to go wrong and which of those you can actually prevent, control and/or mitigate.

Preparation - what is the likelihood and order of occurrence of the failure points. What can you do to either lessen their probability or limit their damage?

Mitigation - once they do occur, how do you handle them.

Those problems that are highly unlikely/improbable or you can do little to control, even if they could be catastrophic, should not be your focus. Many times, it's the 'little things' that do you in, but because they seem minor at the time, we tend to push them off for later. Like the parable of slowly boiling a frog - [ if you put a frog in a pan of water and increase the temperature slowly, they get complacent, even doze off in the warm water, until it's too late ], a small problem ignored today can grow to one that cripples you tomorrow.

This practice also helps you maintain perspective. Anything we try to accomplish in life has hurdles to overcome. Some barely stretch our legs, others smack us square in the groin. Being comfortable with the number, size and type of hurdles you are likely to encounter and knowing ahead of time how you will tackle them, helps instill confidence and the conviction that you are doing the right things. While fear is the strongest of human emotions, self-doubt is the most destructive.

When unexpected problems arise (just like no battle plan survives the first engagement, no plan of any complexity will either), be prepared to re-assess, re-adjust and re-focus.

Another part of this process is identifying the tipping points - more on this later.