Prevention is a key strategy for lowering risk in an organisation, both now and in the future.
Business lore is replete with heroes. Go into any bookstore and there is a galaxy of choice about visionaries and entrepreneurs who “made it happen”. Gates, Jobs, Branson, Murdoch and many others tell the stories of successful business leaders who did something unique and inspirational that added to our wellbeing as a society.
The fact that most of them are billionaires adds to the allure and mystique of their story and drives our desire to learn what it was that made them different so that we in turn might emulate them. This admiration of such success creates the potential to see good business leadership and management as being able to get things done, to solve the problem and to be the person who makes things happen.
In this heady space of business vision and success, it’s very easy to undervalue the importance of the person who prevents things from happening.
If you have had the experience of being in a start-up business, you will remember that first year — a time when you may have experienced initial success, but lacked the right processes, systems and structures to move to the next level and drive business growth.
A critical journey in a start-up business is to put the right structure in place to deliver control and management of key processes. This will help you to avoid the “crash and burn”.
That’s where prevention as a business concept becomes relevant. Though the inventor of a new product is the feted hero who has books written about them, the accounting professional who patented the product actually prevented it being copied by competitors.
So what is the essence of prevention as a management practice? Simply, it can increase the predictability of outcomes and reduce risk. The following three elements are key to building a culture of problem and disaster prevention:
- Implement an expectation, plan or standard that’s defined in advance — a framework against which actual outcomes can be measured. The key challenge of a start-up business is that nothing is planned. There are no budgets, no standards and the stakes are high. So putting in place such control elements is a key prevention strategy.
- Respect controls and limits. This is, in essence, risk management at an operational level. If a limit is exceeded, it should be visible to management and reviewed.
- Drive a proactive response to operating problems. The earlier and more assertively we intervene when something goes wrong, the more likely it is that we will keep the problem small or prevent it from happening again.
Prevention is a vitally important business imperative today. The people who ran the recent Census in Australia understand this intimately. All the large corporations devote far more of their resources to stopping things from happening, rather than making things happen — because when things go wrong, the viability of the corporation is questioned. Operational excellence therefore owes far more of its potency to prevention than to creation.
An important issue that’s in vogue today is the concept of disruption and innovation, which on the surface flies in the face of prevention as a management strategy. Today’s heroes are the Uber set and the power of Big Data. But we must not lose sight of the fact that our response as a business is the critical strategy — not necessarily trying to dream up the next big idea.
This is where prevention as a management practice begins to assert its place. How does a hotel prevent losing its customers to Airbnb? Rethinking a business model can help to prevent losses. In this case, the hotel could convert some facilities to long-stay apartments.
The key element of prevention is to lower future risk by changing how we operate effectively in today’s rapidly changing business environment. It’s not an easy time to be in business — but establishing control and being responsive and flexible are critical factors in preventing business failure.