TRUMP or Hidden 'Value at Risk' That Cost You Fulfillment

This quote was saved, source unknown and spawned this write-up:  "I just had a conversation this morning with a former U.K. Minister of Defense about the whole idea of Europe Trump proofing".

The Trump presidency, or any political change, is a Gray Rhino. An event bringing unpredictable change, or a curve ball in to your existing strategy. Disrupting continuity. Identifying and preparing for these events can transform your company, or simple keep it afloat.

Defining 'Value at Risk'

A comprehensive way of looking at potential for loss in business. Such as a Gray Rhino event. It answers the critical question: "What's the maximum we stand to lose if things go wrong?" But here's the kicker – many businesses have no little bearing on their true Value at Risk. They simple say yes to the offer.

Defining a Gray Rhino in Business

While 'Black Swans' are unpredictable, rare events with severe consequences. Gray Rhinos are different. They're the risks that are:

1. High-impact

2. Highly probable

3. Often overlooked, or ignored

Like their namesake in the wild, Gray Rhinos in business can be massive, dangerous, and blend in with the environment.

Common Gray Rhinos Costing Businesses Millions

1. Overreliance on Key Personnel: What happens if your star performer or crucial leader leaves? Do you check in with them on their happiness "metric"?

2. Cybersecurity Incidents: A single breach can be a thorn in your side, for years.

3. Supply Chain Fragility: As recent global events have shown, an over-optimized, inflexible supply chain can crumble. Cultural comodoties too; fast fashion, trinkets.

4. Cultural Misalignment: A toxic culture or misalignment with values can lead to attrition, boycotts, and brand damage.

   
   

The True Cost of Ignoring Gray Rhinos

The impact of these overlooked risks goes far beyond immediate financial losses. They can lead to:

• Erosion of market share

• Loss of key partnerships or resources

• Decreased innovation and competitiveness, or stagnation

• Brand damage

• Obviously, missed growth opportunities

Unveiling the Gray Rhinos in Your Business

Here's a strategic approach:

1. Risk Analysis: Look beyond financial risks. Analyze operational, strategic, and external factors. An all encompassing viewpoint

2. Scenario Planning: Develop and test various "what if" scenarios.

3. Cross-Functional Input: Insights from all levels and departments of your organization can unveil hidden issues.

4. External Perspective: Sometimes, it takes an outsider's eye to spot what you're too close to see. Can't see for the forst, for the trees.

5. Cultural Assessment: Regularly pulse-check your organization's culture and alignment with values and market expectations. Happiness metric?

6. Technology Leverage: Utilize data analytics and to assist in pattern recognition

From Identification to Mitigation: Taming Your Gray Rhinos

Once you've spotted your Gray Rhinos, it's time to develop strategies to mitigate their impact:

1. Quantify the Potential Impact: Put a number on how these risks could impact you.

2. Develop Contingency Plans: Create detailed action plans for each high-impact risk.

3. Invest in Resilience: Sometimes, the most cost-effective strategy is building systems and processes that can withstand multiple types of shock.

4. Regular Cadance: Make Gray Rhino identification a regular part of your strategic planning.

5. Culture of Risk Awareness: Create an environment where employees at all levels feel empowered to identify and report potential risks. Team.

Turning Risk into Opportunity

Here's a paradigm shift – turn the Gray Rhinos into cash unicorns?

Unlike Blockbuster, Netflix transformed the risk of digital disruption in the DVD rental market into an opportunity to pioneer streaming services. They saw the Gray Rhino charging AND took action that revolutionized how we consume media.