How I Use Simple Contingency Planning to Stay Optimistic in Bad Times
Planning for the unforeseeable need not be complex. Instead, be practical.
Let us face it. There are only 2 types of outcomes in life and at work.
The ones we like and those we do not appreciate. That is it.
Like you, I actively avoid negative ones. The reason is simple. It makes me uncomfortable.
That said, I survived 2 macroeconomic contractions.
The first one was the Great Financial Recession between 2008–2020. The second one lasted throughout the Pandemic Era.
These events taught me the importance of contingency planning. We never know what may happen as we weather the storm.
Especially now… when the next global economic hurricane is knocking on our doorstep.
You Cannot Be Ready for Something You Are Unprepared For
I argue that knowing is not the same as preparing.
We have all been students. I used to cram as much as I could during the 11th hour. That, however, did not prevent me from buying another last-minute candle.
Therefore, it is insufficient to know what is happening. We must ask ourselves more questions to get us to act.
Allow me to frame it in the context of economic uncertainty, specifically in the context of a potential retrenchment.
- Question 1a: What if the company decides to retrench employees?
- Question 1b: Will I be affected?
- Question 1c: Am I prepared for it if I am axed?
You might notice that I labeled my questions 1a, 1b, and 1c instead of 1, 2, and 3. That is because they are not separate pointers. They are follow-up questions in a logical sequence.
And that brings me to this one technique that 1-Man consultants use as part of our profession. We would observe a phenomenon from afar and ask ourselves a string of what-ifs as if we are actively partaking in the scenario.
This exercise has a fanciful name.
It is known as contingency planning.
Using Contingency Planning to Protect Ourselves
Not having a contingency plan or never performing risk analysis and mitigation activities is like not having an insurance plan for yourself.
― 17 Reasons Why Businesses Fail: Unscrew Yourself From Business Failure
The starting point of contingency planning is a high-level question with a given context. This is an example.
“What if the company starts retrenching employees?”
I recommend using neutral statements to remain objective. I know colleagues of mine who cannot bring themselves to work on this exercise because they cannot imagine getting retrenched.
It is too psychologically demanding for them. It might be the same for you too. Therefore, it is better to start on neutral ground.
Many thoughts will cross your mind as you ponder over that question.
For me, I like to start with what I have.
These are questions that will pop into my head.
- What is my notice period?
- How much severance will I get?
- Is my CV ready?
- Do I have a ready headhunter pool to tap on?
I will extract them from my mind and scribble them on paper. Ink on paper supports further thinking.
Then, I fill in the facts.
- What is my notice period? 3 months
- How much severance will I get? Salary for 3 months + ex-gratia + encashment of vested scripts (shares of private companies)
- Is my CV ready? Yes
- Do I have a headhunter pool ready to tap on? Yes
At this juncture, you may realize that you do not have answers at your fingertips. No worries. You still have time. Go review your employment contract in detail and come back to fill in the blanks.
And then, do this once you have your answers.
Pay close attention to your Nos.
Take, for instance, the question on CVs. I have been retrenched before, and at that time, the backlog of my CV update ran for 6 years.
I forgot a big chunk of my projects and achievements. Don’t let that happen to you. If you happen to be working in a sector with an industry-wide retrenchment (like big tech today), you want to be ready when sh*t happens.
Update your CV before the retrenchment axe starts getting into action.
Next, I recommend you keep headhunters or talent scouts of your industry within arm’s length. These people have their fingers on the pulse.
- They know how the industry is performing in terms of hiring and firing
- They understand the market rate for professionals in the industry
- They bring you opportunities even before you are retrenched
And this is what you want.
Think about it this way.
During economic contraction, many people will be asked to leave. Therefore, many people will scramble to search for jobs via headhunters they know.
Your headhunter will be overrun by a swelling growth of job seekers and limited job openings. They have no time for you.
You want to be ahead of the queue when things happen. You can… if you are prepared for it.
Remember. Chairs disappear when the music stops. You want to grab hold of one before the last dance.
Parting Keynotes
Postulating an unfavorable outcome and preparing for it in advance is smart. Many 1-Man consultants use this technique to protect our downside.
I use contingency planning a lot. Unexpected things do happen, you see.
And this is a simple technique. We can apply it to our 1-Man consulting practice, or 9–6.
All we must do is ask ourselves this simple question.
“What if sh*t happens to us?”
We can then get busy seeking the answers we need.
As a content contributor, I write my observations from daily life and my business exposure. Because our life experience is the bedrock of our unique perspectives.
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