Monday, February 6, 2012

Are You Asking "What If?"

Last year's tusnami in Japan, the Euro debt crisis, earthquakes, revolutions in the Middle East and tornadoes in the U.S. have been like a "smack up the side of the head" for business leaders, not only in this country but around the world.

Production in one country depends on vendors and suppliers in another country, and financing may depend on banks in different parts of the world.

All of this contributes to the increase in risk for manufacturers and almost every other kind of business.

If you can't get parts, you can't make widgets and if you can't make widgets, you can't sell them.

The CFO of Starwood Hotels and Resorts, Vasant Prabhu, says, "You have to more than at any time in recent memory think in terms of 'what ifs'."

The Institute for Crisis Management maintains that roughly two-thirds of all business crises are smoldering crises -- problems that start out with some warning or signs of trouble ahead -- and consequently two-thirds of all crises are preventable.

So it behooves executives and managers at every level to anticipate what could go wrong with their supply chain -- at home or abroad -- and what could go wrong with the banks that control their cash, as well as all the things good managers have always worried about and planned for.

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