How to prepare your brokerage for the next black swan
Author: Baiana Kashaeva
If you hadn’t heard the term ‘black swan’ prior to the pandemic, you are probably familiar with it now. A black swan is an extremely rare and unpredictable event with a dramatic, often negative effect on the world. Although the pandemic that we are currently living through has not yet been formally accepted as a black swan, it is safe to say that it fits that description.
So how can brokers prepare for an event that is impossible to predict?
The black swan is synonymous with the word ‘crisis’. So if we treat it like the same thing, it is easier for us to work out a plan.
Do your research
As a start, we recommend that brokers conduct a review of their business. Do the SWOT analysis for the service portfolio, look into the skills you’d like your employees to have and determine if additional training is required, check your financial health, and see if there are processes that can be optimised or automated.
Go department by department to see what is working and what represents a potential risk. Talk to your colleagues and ask for their input. There are things that only people who do the work daily can tell you about.
Map out the potential risks
Next, run a brainstorming session to develop a list of all of the potential risks that can affect your business. As we said earlier, a black swan is very rare, and it’s unlikely that it will resemble the risks you outline during your brainstorming session. However, you can prepare yourself for all the predictable risks, and the chances are that it will help you push through the black swan and end up in a better situation than you otherwise would be.
Don’t put all of your eggs in one basket. This goes for anything: from your employees to the services that you provide. It’s common for companies to rely heavily on a single team member to do certain things. They do those tasks perfectly, so nobody worries about passing the knowledge to others or writing down the key steps. Then this person gets sick, goes on vacation, or leaves the company abruptly, and chaos unfolds. Same with clients - a business cannot depend on a couple of enterprise clients to close their quotas.
Develop a communication plan
Sometimes when an event occurs, the reaction is much more dramatic than the event itself. And while a black swan event assumes a massive disruption, we can still minimise the impact by preparing the reaction plan. For example, you decide who will take over and manage the immediate aftermath, how internal and external communications will look, and what information you will be sharing.
We all fear the unknown, so if you have a smart plan for keeping your stakeholders in the loop, you might avoid further disruption caused by panic and emotional decisions.
Exercise flexibility and resilience
We called a ‘black swan’ a crisis earlier in the article, but you can also look at it as a change, a very dramatic and abrupt change. Business schools, coaches, and C-level executives have been buzzing about change management for many years now. And rightfully so. Someone who is generally more flexible and resilient in life will have less trouble dealing with a crisis.
Look at your brokerage and analyse how you have dealt with changes in the past. Have you been resilient or flexible? Have you adapted quickly to the new situation? How can you change your approach today? Arrange a meeting with your key employees to break down the previous experience, what you could do differently, and what changes you are currently experiencing that you can use the new mentality to deal with.
Invest in business intelligence
Whether you choose to hire a team to run reports and analyse the data, or you limit yourself to an advanced software tool that would do most of the work, you must have a strategy in place. If you keep regular track of your operations, you can track trends early and either make the most of them or minimise their impact on your business.
We cannot be fully prepared for what the future holds. We can, however, do our best to reduce our vulnerabilities by constantly working on improving our position, expertise, and learning to adapt quickly. A company with a complete picture of its shape and situation will help find the weak spots and work them out before the crisis hits.
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