Within militaries worldwide, the process for decision making is highly structured and well thought-out. It is assumed that the decision-making process will be clouded by the “fog of war” and therefore decisions need to be made in a structured, logical way.
Key reasons for this include an acceptance that decisions will need to be made without full or perfect knowledge of what an opponent will do, and also if key leaders are taken out, the process can continue and a decision can be made by those stepping into the breach.
Looking at the circumstances in which the military decision-making process is employed, it is difficult not to draw parallels with the situations being faced by companies the length and breadth of the country due to the impact of the Covid-19 crisis. As we now turn our eyes to exiting the lockdown phase of the crisis, businesses are considering the circumstances in which they will reopen and how they will adjust to what is being called the “new normal”.
Predicting the future is a dangerous game at the best of times, but there are certainly some elements of the military decision-making process that can be used to offer a framework to help business leaders order their thoughts and put some shape on their plans for the next few uncertain months.
Within military operations, one never fully knows what an enemy force will do exactly, which is why comprehensive scenario planning is undertaken. Whether attacking or defending, different scenarios are teased out from an analysis of both the enemy’s capabilities and those of friendly forces. These scenarios are referred to as Courses of Action (COA) and typically three or so COAs will be selected to be “wargamed” by the commander and their immediate staff.
This involves the staff splitting into a blue team (representing our forces) and a red team (representing enemy forces) and realistically stepping through the likely situations that will be encountered and the plans to react to those.
Businesses who are considering the future could take a page from the military planners, and conduct their analysis using what the military refers to as the Most Probable Course of Action (MPCOA) and the Most Dangerous Course of Action (MDCOA). Using this framework, businesses can start to map out the extremes of what may be necessary in a best-case scenario and worst-case scenario.
At this point, everyone realises that the best-case scenario is unlikely to be a return to pre-Covid conditions, and therefore planning must take this into account. Factors such as ongoing social distancing requirements, employees being conflicted between work and home commitments, reduced demand for services (or increased demand for some industries), redeployment of staff to meet new needs or threats, and provision for temporary loss of staff through infection or suspected infection are all possible criteria for consideration in these scenarios.
The advantage of undertaking a formal scenario-planning exercise is that it helps leaders and their teams to visualise how events are likely to play out and the steps and resources that need to be put in place to react to these events. The advantage of plotting out the most probable and most dangerous courses of action is that the reality is likely to fall somewhere in between, but by having analysed both ends of the spectrum, leaders and their teams will have greater confidence in how to approach the uncertainty of the future.
Additionally, it will also become evident much sooner that events might be moving from a probable scenario to a dangerous scenario and it allows business to be alert to the associated dangers much sooner than if this analysis had not taken place. Scenario planning also helps leaders to mentally prepare for the tough decisions they may have to make down the line, and indeed how they might be able to avoid them where possible. It helps businesses to understand what they can manage internally with their own resources, and when it is time to go outside for external assistance.
Control the controllables
Finally, scenario planning allows businesses to identify what they consider their acceptable levels of risk. This will inform lots of things from return-to-work protocols to how cash flow is managed.
One of the risks in scenario planning for inexperienced teams is that they tend to focus on things outside of their control. Those leading scenario planning exercises need to be mindful of another military adage – control the controllables.
Do not waste time trying to plan for things that cannot be controlled, this will only lead to exasperation and a sense of hopelessness. Focus instead on how the business will act and respond to events that have been identified and don’t be afraid to get into detail. Another risk is trying to plan too far into the future – stick to a reasonable timeframe of months rather than a year or more. The situation is evolving too rapidly to be able to predict beyond a relatively short time horizon, so don’t waste time doing so.
Not everyone needs to be involved in scenario planning. Pick the people who are most appropriate for the business, based on position, experience, or judgement, and allow them to undertake the process. The rest can continue to run the business.
A real-life example of this type of planning comes from Serco, the FTSE 250 UK company. The company provides personnel for public service contracts and has recently identified a small team to start planning for the scenario where government spending is severely curtailed for a significant period post-Covid.
Most companies will be facing similar realities and will have to remain sufficiently agile and imaginative to find solutions where practical. Amrop has had to undertake a similar exercise.
Partners across our 73 global offices have been in regular contact, with our headquarters team gathering ideas centrally and sharing them for best practice. Key priorities were protecting jobs and managing cash. With the prospect of executive hiring being reduced for the duration of the crisis, we have been modelling scenarios around business requirements once the immediate threat has passed including helping firms to reorganise their teams, and to support the wave of mergers and acquisitions that will likely follow the crisis.
All change involves risk, and these are certainly risky times. The military typically suggests to its planners that a risk is something that can be recovered from should it go wrong, and gamble is something that cannot. This too becomes a useful acid test in uncertain times and scenario planning can help identify one from the other.
Morgan Manganis a partner at executive search consultancy Amrop, and a former senior officer in the Irish Defence Forces.