A week ago, Donald Trump was elected as the next President of the United States.
It’s since become painfully evident that many many people were not only surprised by this, they had not considered it a realistic possibility.
And so they had not planned for a Trump administration on an organizational level.
(Note: I work in DC in public relations and lobbying – it matters here on a day-to-day level.)
We now see this was a mistake.
But the takeaway is clear:
Always have a back-up plan.
Or preferably, multiple back-up plans.
In business school, we called this scenario planning. You don’t present the client with a plan, you present the client with multiple plans – different solutions for different conditions – everything from budget sensitivities to personnel changes, to Black Swan events.
“Black Swan” isn’t just the title of an amazing Darren Aronofsky film. In finance parlance, it refers to a “long-tail” event – an outcome so far down the probability curve that its chance of occurring is vanishingly slim. These events tend to be random and unexpected.
The phrase “Black Swan”comes from an ancient Latin saying that presumed that black swans did not exist, and thus were an impossibility. After Dutch explorers actually found black swans in the wilds of Australia in 1697, the saying changed to mean a perceived impossibility that might later be disproven.
Some examples of Black Swan events:
- The 2008 U.S. housing crash
- The invention of the internet
- The dissolution of the Soviet Union
- The September 11 attacks
- Donald Trump’s election
The article begins:
“On Tuesday, when Donald Trump defied the polls, the Clinton machine and much of his own party establishment to become president-elect of the United States, he also became the closest thing to a black swan event we’ve ever seen in American politics: Statistically unlikely, rationalized only in hindsight—and carrying an impact that could be off the known charts.”
The article continues brilliantly with a scenario planning exercise – laying out the Best Case, Worst Case and Middle Case predictions for the Trump presidency, according to experts.
Scenario planning is essentially contingency planning – multiple plans for multiple outcomes.
In this case, it meant being fully prepared for a Clinton or a Trump win, regardless of the conventional wisdom or the polls.
But such scenario planning is key to success in life as well.
I’ve written about this before (just over a year ago) in “What’s Your Back-Up?”
Put another way:
Diversification Is a Key to Success
James Altucher is fond of noting that the average millionaire has seven different sources of income, not just one (which, for most people, is their job).
I was lucky enough to start my career in Washington, DC – that swamp of overachievers.
Only in DC would you find someone with a Master’s Degree from the London School of Economics working an entry-level receptionist job.
The point is, in DC, a common question is “What else do you do?” In addition to your job, what’s your project? Your side-gig? Your volunteer group?
So pervasive is this mindset that when I was 25 this town actually made me feel guilty that I wasn’t training for the Marine Corps Marathon.
Here, even in this den of workaholics, people still define themselves by what else they have going on besides their job.
They diversify even among their ambitions.
The lesson here is simple:
Options bring freedom.
Always diversify, always have a back-up plan. And a back-up plan for that.
Don’t present a client with the answer, but with several answers – several solutions to their pain point or problem. Over-deliver.
A week ago, many people awoke to a New World Order for which they were woefully unprepared.
Maybe next time, they won’t be.