What should I focus on or watch out for in order to prevent a calamity happening?
The Samsung crisis is shocking. If it can happen to companies like Samsung, it can surely happen to smaller companies like mine. What should I focus on or watch out for in order to prevent a similar outcome? In your opinion, will the Galaxy Note 7 incident put a serious dent in Samsung’s reputation? Or do you think it’s possible that Samsung will overcome it?
Geri, life happens. Technology fails. There's no way to prevent a crisis. I'm sure Samsung didn't start out wanting to make a phone that caught on fire. They tried to make the best product they could. This was not a malicious plan like Volkswagen who purposely told their cars to emit only enough nitrogen oxide to pass inspection.
There are things that happen that are beyond your control. Like the fire that a jerk started in his apartment 3 doors down from me that displaced me and triggered a mess of problems. But I bounced back. Just like the east coast is going to recover and rebuild after Hurricane Matthew.
The trick is to be prepared for the worst case scenario. Ask yourself, "What's the worst that could happen?" and prepare for that. Don't panic when something bad happens. People are human and mistakes are made.
Have a strong team in place -- whether in-house or external strategic partners. Make sure your product or service is the best that it can be. If someone has a problem, fix it right away. If you get a bad review, diffuse it quickly and publicly. Find out what went wrong and remedy it.
Have contingency plans. Plan ahead as much as you can for each possible scenario.
Will Samsung recover? Probably. They make many other quality products. It's going to be up to their leadership and how they handle everything.
You really cannot know where the next crisis in your business is coming from. But what you can do is to sot the early warning signals at the soonest possible point, and act on them.
Two things then. let me focus on the first (spotting the early signs) and leave you to figure out how to act should anything start up. But I will note that too often, we see the faint shimmer of a warning on the horizon, but we are busy, we are focused, we don't ant the hassle. SO we put the shimmer out of our mind until the 40' long 50 ton truck is almost upon us.
Sen Sen No Sen is a Japanese martial arts term. Go No Sen is reacting to an attack. Sen No Sen is reacting at the moment it is launched. Sen Sen No Sen is reacting to the intention to attack, before the attack starts.
It takes constant awareness. In business, you cannot be aware of the external world and everything inside, all of the time. But what you can do is to cultivate two rituals.
1. Frequent horizon scanning sessions with cross sections of your colleagues. Use the time to discuss what people are aware of. Give them thinking time. Give them talking time, and above all, give them a d*mn good listening to. Talk to people, listen to people, and spot the patterns and trends.
2. All this may come to nothing if your unconscious mind spots the pattern, but your conscious mind is too busy to the quiet voice of your unconscious. So you must fid time in your busy week to stop and do nothing much. Daydream over a coffee in a coffee shop. Go for a quiet walk on your own. Spend ten minutes under a hot shower with no radio. Only when your conscious mind starts to switch off and get bored, will it be able to hear the quiet voice of your unconscious.
So, a combination of deliberate and effortless thinking patterns, all focused on noticing what is there.
If you then take the trouble to investigate what you notice straight away...
Remember Tom and Jerry. Often, Tom would get passed a fizzing bomb. But would he take the minor pain of pinching the flame out between thumb an finger No. Instead, he would stare at it incredulously. Until... Boom.
Pinch the fuse.
I strongly suggest studying the Risk Management sections of Project Management Institute's (PMI's) Project Management Body of Knowledge Guide Guide (PMBOK). Add to that the corresponding chapter of a PMI-PMP (Project Management Professional) exam study guide such as the one by Rita Mulcahey.
1. In general, you need to systematically define and examine every facet of your business, processes, products, services, and business environment. (The whole of the PMBOK Guide will help you classify those areas for projects.) As you examine each facet, you compile a list of risks.
2. To evaluate the identified risks, you make a subjective, rough estimate of their effect and probability. You then accept the low-risk items or place them on a watch list and make a more objective evaluation of high and medium risks.
3. Identify possible responses (accept the risk, sidestep the risk (e.g., plan your road around the mountain instead of tunneling through it), reduce the effects, take steps to reduce the probability, transfer the risk to somebody else (outsourcing or insurance), or wait and see.
One of the characteristics of risk that you need to consider is what you know about them. There are risks that you can reduce by learning more about them, and there are risks that are irreducible because there's a random element. For example, knowing how many sides dice have lets you know the possible range of values, and testing them can tell you whether loading or poor workmanship make some results more likely. On the other hand, after that, you cannot reduce randomness. This is part of the information you use when evaluating strategies for managing the risks.
4. Evaluate and select responses based on their cost and probability of success. Note that risk responses become policies, changes to processes, or new requirements. Many organizations delegate responses leave them isolated. However, except for responses that are experimental (e.g., try it on a limited scale before rolling it out to the entire organization), they must be integrated into the business, project, product, etc.
5. Set up a risk monitoring system that tracks risks in the watch list as well as implementation of responses. This feeds into controlling performance and also into Lessons Learned that saves you work in the future.
6. Risk identification is iterative because risk responses can create secondary risks and because everything changes, eventually. Many companies miss new risks because they perform risk identification and planning and never re-visit the subject.
Like process improvement, risk management (RM) needs to be part of a company's culture. Some say that RM should dominate status meetings because it is more proactive and more actionable, and also because "status" is actually a facet of risk.
To answer your 2nd question first. Samsung, will survive this.
They have responded quickly.
It's only 1 product line.
It will go down in History as a lesion for others.
The re version has also failed. this will be a PR problem.
I think that they will now hold off till the Note 8 is ready and fully tested.
This will all be forgotten in 12 months.
Now your 1st question.
You can't account for everything. But you can plan for some, and have checks and procedures for others.
One of the things you can do is to set up your business so that everything can run and operate within whatever "normal" parameters, the business sets. Everything outside the parameters High or low is "Flagged"
That's called management by exemption.
This can be set for products, quality, sales, stock, procedures.
The other thing you can do is to prepare a "disaster plan".
Think of it as a fire drill / plan.
While things are calm you can plan the procedures and process for many scenarios, lack of stock, price increases, product failure, Social media (PR) responses, even up to how and when the business should fold.
While planning you are free of the pressure that you will be under if that scenario happens. If not that specific one, it maybe something similar, from which you can draw a similar response.
Was Samsung expecting the problems presented with the Node 7.
I don't think so.
Did they have a plan?
Yes. It's called "Product recall" / Replace / upgrade to next version 7 - 7.1.
Did they have a 2nd plan ?
Yes. "Product disaster " (catastrophic) Recall / Credit Launch completely new Model version . 7 - 8.
While the problem is under the Samsung name. The actual fault may be with the component manufacturer which may or may not be Samsung.