Dear Optimistic Leaders: Make Paranoid Plans
Great plans account for when things don’t go according to plan.
As a leader, a major part of your job is to make plans: business plans, financial plans, strategic plans, project plans, succession plans. The act of planning is inherently optimistic. You have a vision of a better future, and you’re determining the steps to get there. But it’s important to know that the road will have bumps along the way. How does your plan account for them?
As I write this, it’s mid-2022, and businesspeople are reckoning with what happens when things go wrong. In the technology industry, we all got used to things going very right for a very long time. The pandemic poured gas on consumer and business demand for digital platforms and services. Technology companies grew and couldn’t hire fast enough. But just in the past quarter, the U.S. market’s bull run came to an end, companies are adjusting their projections down, and a hot, competitive talent market has been replaced by hiring freezes and cutbacks. A whole generation is experiencing historic inflation and seeing red in their 401(k) accounts for the first time.
Humans tend to overreact when things go wrong because it feels dire and catastrophic. But the truth is, downtimes are utterly normal. Paranoid optimists know that things get better in the long term, but in the short term, there will be times when things get worse. The key is to make plans and build organizations that are resilient enough to withstand these downturns.
Great plans build in room for error — or, a margin of safety — and create cushions to bounce back from those bumps and increase chances of success overall. Here are a few ways to make more resilient plans.
Bolster the weak links
Your plan is only as strong as its most fragile pieces. When you look at your plans through the lens of resiliency, scrutinize the weakest parts. What are the critical assumptions? The dependencies that must materialize or else? The bets you’re making that have to land in your favor?
Once you identify a plan’s vulnerabilities, run the worst-case scenario. What happens when they break? What’s plan B? How about plan C? What can you build into the plan now that makes plan B and C readily available to you should you need them?
No one has a crystal ball that can predict exactly what will happen. But you can make plans that are adaptable enough to do well in many possible futures. Aim to reduce fragility and make plans that aren’t brittle.
Add margin where you control the variables
Every plan relies on a set of factors: assumptions, resources, dependencies, expectations, and scope. Some of these factors are not in your control, and some are. The factors that you do control are your levers. Exercise control and judgment to add room for error.
How can you adjust your scope, resources, and timeline to account for scenarios where estimates are too optimistic, dependencies are delayed, or approval takes longer than expected? Get yourself out of “if all goes well” happy-path thinking and build in a safety margin where you can, to make sure that there’s a path if certain things don’t go well. Your safety margin should be big enough so that it feels a little uncomfortable. Maybe you’ll never need it! But if you do, you’ll be glad it’s there.
Shoot for the stars but constantly cut risk
Great plans accomplish big goals when they go well and cause little damage when they fail. Planning involves making some bets: When taking risks, limit downside while having considerable upside. Minimize the worst that can happen and maximize the impact of success.
When we take on ambitious digital transformation efforts with our clients, we’re shooting for the stars. But along the way, we have to constantly cut risk. We manage scope, use proven technologies, keep things as simple as possible, use small teams, minimize maintenance burden, and create documentation.
Cutting risk doesn’t stop once a plan is in-flight, either. Just because you’ve started down a path doesn’t mean you shouldn’t take a major fork if it’s warranted. Avoid sunk cost fallacy and make sure you’re always cutting risk, even if it means throwing out effort that’s already been invested. When things aren’t going according to plan, remember: What’s already happened is behind you. The only way out is forward.
Gina Trapani (she/her) is CEO at Postlight. Send her a note at email@example.com or follow her on Twitter.
Story published on Aug 17, 2022.