1. Practice Crisis Anticipation. Look ahead as far as you can and ask, “What could possibly change or go wrong that would threaten your survival?”

   • Think About The Worst Possible Event. For example, what would you do if interest rates doubled, as they have done in the past? What if your best-selling product, or service, suddenly stopped selling, as often happens in high-tech industries in times of rapid change. What if a key executive died unexpectedly or your offices with all your records were destroyed by fire? What if you lost your key customer or major source of revenues? These and other questions can only be asked and considered by the leader, the person ultimately charged with the overall responsibility for results. The failure to think through possible crises in advance can open you and others to fear, panic and confusion if something goes wrong.

   • Plan For A Crisis. The Greek philosopher Epictetus said, “Circumstances do not make the man; they merely reveal him to himself.” A crisis is the genuine test of courage and effectiveness in a leader. You can greatly improve your abilities to function in a crisis situation by thinking it through in advance and by developing contingency plans – just in case.

2. Determine What Can Go Wrong. This technique is called the “master method” of decision making. It involves asking, “What is the worst possible thing that can go wrong in this situation?” Once you’ve asked the questions, you must decide whether or not you can live with those consequences. For example, in an investment, or new product introduction, or new promotion, the worst possible outcome may be that you will lose every penny. Can you live with that? Can the company survive? There are many different types of decisions and one of them is the decision you cannot afford to make. Most big failures result because someone made a commitment of resources without carefully considering the worst possible outcome.

   • Make sure the worst thing doesn't happen. Do what billionaire's do. John Paul Getty, the great oil billionaire said that one of his secrets of success was to always determine the worst thing that could happen in any investment – and then make sure it didn’t happen.

Action Exercises

1. Make a list of the three worst things that could happen to your business or your department. Then develop a develop a strategy to deal with these situations if they occur.

2. Practice “crisis anticipation” in each key area of your life. Look into the future and imagine a major setback. What would you do if they happened?