Firestorm has a globally recognized group of contributors to this blog - Expert Speakers, Authors and Presenters, all highly credentialed and experienced in the field of crisis preparedness and crisis management.
By Gary W. Patterson - Gary has more than 30 years of senior management experience with high growth technology, wireless, manufacturing and service companies. He has worked with more than 200 companies — from start-ups to Inc 500 to Fortune 500 — providing high level strategic guidance and expertise.
His webinar, Find Your Million Dollar Blind Spots is on 8/15/2012 at 2- 3 PM EDT
Jim Satterfield & Harry Rhulen will present a webinar on The ROI of a Crisis: $10 Million a Minute??? 8/14 2-3 PM EDT
Knight Capital disclosed losing $440 MILLION from a computer software glitch, supposedly in less than an hour. Its survival in the prior form or even survival seems as risk. Just the day before, this appeared to be a prominent public company. (See Faster, Knight Capital! Kill, Kill!)
To what extent was this a disaster waiting to happen (as a foreseeable blind spot with key leaders in a head in the sand approach) versus being the unfortunate victim of a unforeseeable catastrophe (a Mount Vesuvius black swan blind spot) occurring in a relative blink of an eye? Whatever your answer, to what extent has this loss placed people’s livelihood, careers and financial security at risk?
A little more groundwork and then let’s share a checklist of 7 possibly critical mistakes, as a quiz for dealing with potential risks to see how you (a) rate Knight Capital’s actions, (b) rate your organization’s current status, and (c) formulate a plan to accelerate opportunities or mitigate risk.
Back to framing a background for this discussion.
Who is asking how discovering and then acknowledging blind spots can make or lose money? Consider opportunities which will not occur as desired when resources are not properly allocated or even available. Given the invaluable gift or time to react, leaders can adjust and refocus as needed. I have seen new opportunities often arise in the readjustment process, when you learn what was not working.
Experts state that “What you don’t know about your business can cost you your business.” I add the fact that sticking out your balance sheet is no more comfortable than a visit to your doctor for either you or your company, but it’s every bit as important. Even if it’s bad news (maybe especially) you need to know.
As suggested above, let’s apply my checklist of 7 possible mistakes to watch-out for on dealing with potential risks.
First, on a scale of 1 to 10, with 1 being minimal to 10 being outstanding, for your analysis, how do you rate Knight Capital on each of the seven possible issues? Give then credit where they seem to have done adequate to even great jobs. Then jot a few notes on why you gave them that score, plus any other thoughts about how much of a blind spot you feel that was a potential problem for Knight.
If you average the seven scores, how do you rank Knight on a scale from 1 to 10? (For those who like to correlate this to the A, B or C etc. we got back in school, you can easily add a zero to the average score and make that conversion.) Will you move up or down their average score if you think poor scores on one or two of these points put the entire company at risk? Finally to what extent was this a situation where The Cost of What You Don’t Know Can Be the Company, or at a minimum the loss of a number of people’s jobs and livelihood?
Now take the quiz again, honestly evaluating your company on each of the seven issues and looking for any one answer which could put your company at substantial or even total risk. As a bonus factor consider which five to ten risks are not covered in your financial statements.
For the third and final iteration, where do the answers above and a little more heart rendering honesty spotlight an opportunity to accelerate opportunities or mitigate risks?
Some of you will feel very pleased. Consider how you can use this thought process to open up the lead over a competitor, or to create an opportunity. Some of you may have a gnawing feeling in your stomach. Others may feel that dangers are lurking and take one or more actions to keep yourself off the front page of the Wall Street journal or your local paper. After all, the job this process saves may be your own or one of your friends.
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Firestorm founders Harry Rhulen and Jim Satterfield wrote Disaster Ready People for a Disaster Ready America specifically to address the need for crisis and disaster preparedness at home, and the book has become a cornerstone of many personal and corporate preparedness programs.