How to Create an “Edge of Cliff Analysis” to Prevent Big Problems From Occurring

2 women in a n office looking concerned

by Jan Richards

“I’m afraid of what I don’t know,” the CEO of the rapidly growing company said to me.

Advertisement

“And I’m afraid of what I can’t see.”

He feared dire circumstances could wipe out his thriving company.

This CEO was worried enough that he longed for an early warning system…if there were a way to create one.

So I did. It was like solving a high-risk puzzle, or providing an action-oriented dashboard that would guide them through improvements, gradually.

And then we made sure the decision-making and prioritization framework would serve his company.

Do you, too, long for a sense of command in otherwise challenging and unpredictable circumstances?

Do you ever wish for an early warning system such as this CEO had?

If so, here are the basic steps we used to create this busy company’s early warning system:

– Start with your fears

We called this the “edge of cliff” analysis, and started with the CEO’s greatest fears. He had lived with heavy but ambiguous worry for some time. He hadn’t yet articulated his fears clearly, so that he could turn them into something positive and actionable.

– Turn them into scenarios

We considered his worst-case scenarios and the probable consequences of each for his clients and company. We also considered best-case scenarios (they are so much more fun to think about…and we needed those for a bit of relief). And then we considered what would happen if the best were even better, and the worst were even worse than we imagined. This stretched our sense of what the early warning system needed to accommodate, and flag for preventative, or adaptive action.

– Make your early warning system goal clear

Identify what you want your early warning system to do for you. Then consider who will use the information, and what they will do with it. Check in with the future users of the information to see what they need to make the information readily usable, and actionable.

– Gather external information

I had to find a proxy for customer satisfaction and frustrations, in lieu of talking directly to customers. I looked to see what promises were made or implied to customers through the company’s marketing and advertising materials. This told me what processes inside the company had to work flawlessly, under all different circumstances, no matter what was happening outside the company.

– Synthesize

Working with the leadership team, I verified and clarified which processes had to be top-notch in order for them to continue to thrive. We mapped this to the most likely scenarios they might face, and identified which processes put them at highest risk, if they were not strengthened and improved.

– Organize and communicate

We organized and simplified the work, making it easy to understand and use.

We had no interest in creating a system that just looked good on paper. We wanted one that would be successful in real life and real business.

We then trained people, helping them see what valuable part they played in making the early warning system work successfully. The early warning system turned out to be a combination of crystal ball, fire drill, and strategic change management system all rolled into one.

If you need an early warning system, and would like guidance and support as you do so, let me know.

If enough people are interested, I’ll create a class to teach and guide you through the process.

About the author

Jan Richards mentors and provides online training for leaders and teams who want to change or improve, but the desired change hasn’t happened yet, for any of many reasons. An experienced entrepreneur and business consultant, Jan has led many teams and businesses through major change and improvement projects. She is based in the always-rapidly changing Silicon Valley and San Francisco Bay area. Her clients include large and small companies, primarily in tech, biotech, financial services, and telecommunications. She has an MBA from UC Berkeley and a BS in journalism from Iowa State. She was a national examiner for the Malcolm Baldrige National Quality Award for five years. Prior to starting her consulting business, Jan worked for seven years at Apple Computer where she worked on and led teams that improved key business processes in product development, manufacturing, distribution, finance and administration, and sales and marketing. To learn more, visit her website at http://jan-richards.com