Snow in Seattle today. It will be interesting to see how many of my current clients make it to their office today. I for one am taking the bus and despite it being a bendy bus, it looks like it will manage to make it downtown. It had to go out and around a jack-knifed bus to make it up and over the bridge out of my neighborhood, but it made it.
Forecasters were sure we would get snow Tuesday night, but we didn’t, nor did we get snow yesterday despite their predictions all day that we would. Snow didn’t come to Seattle until last night. Most schools even announced closures based on these forecasts rather than waking up early to see if it had actually snowed. Forecasters blamed it on a “donut effect” meaning that the mountains to the west and east of Seattle took all the snow.
This Seattle snow fiasco is a good lesson in risk management. Is there really such a thing as 100% probability? While it is important to have a risk management strategy to protect yourself against events of low probability and high impact and every other combination, the key aspect of any such strategy is flexibility.
What if Costco or Nordstrom’s had decided to close all of their stores based purely on the weather forecast? What would the unnecessary financial losses have been?
Flexibility is key. Flexibility in everything you do, from human resources to manufacturing to risk management. Without flexibility any strategy, policy, or process is doomed to have some snowless “snow” days.
Look at GM. Underinvestment in flexibility when times were good has left GM on life support and begging for money from the federal goverment because they only are capable of producing cars people don’t want at a cost structure they can’t sustain.
So when you are building any business or policy or process, look at whether or not you are designing it with the necessary flexibility.
After all nobody wants to get snowed under.
What do you think?