by John Deverell
I ascribe the expression ‘the prepared mind’ to two people.
First, to Louis Pasteur, who said: “Fortune favours the prepared mind”.
Second, to Ulf Henriksson.
It was Ulf who took Invensys plc into the FTSE-100 – and who headhunted me out of the Army some 10 years ago to join the company.
He used the expression to describe the state of mind required to deal with potential crises, of which we had many. It was to be achieved through forward thinking, training and teamwork.
Achieving the prepared mind is good guidance for all of us when we are faced with crises.
And yet a glance at the dramas in the news, any day of the week, shows that this guidance is often disregarded. But that is unwise, because crises happen to all of us.
My business surveyed 800 companies from every sector. Many of these companies were, or had been, family-run.
One in three had a business-breaking crisis in the previous five years.
And we all have friends and know families who have suffered major crises of a more personal nature.
So this is a matter of importance for families, their offices, businesses and advisers – as well as being applicable to commercial companies.
As far as families and their family offices are concerned, examples of risks that can morph into crises include the following:
The challenges posed by global mobility and travel;
Health, wellbeing and relationship problems;
Digital, social and reputational pressures;
Emergencies, accidents and sudden succession;
Unreliability and untrustworthiness of associates, friends, employees and business partners;
Financial dramas of all sorts;
Failure to identify the full range of adverse events that might afflict the family and their interests;
And, the lack of an endorsed and rehearsed plan to deal with them.
In essence, adverse events will happen – it is only their nature and timing that tend to be unforeseen. And a poor or slow response is likely to compound the situation and turn an adverse event into a crisis.
However, there is some good news. Most crises are preceded by some indications that they are coming. They might therefore be described as ‘predictable surprises’.
It is possible to get onto the front foot in dealing with them. Donald Rumsfeld was ridiculed for talking about ‘known unknowns’ but his expression captured the notion.
And in his book Black Swan, Nassim Taleb described the phenomenon of unlikely events that have an extreme impact. ‘Black swans’ will appear in our lives at some time or another.
My title for this article, “The prepared mind in a time of crisis”, suggests that we can prepare for them. We had better do so, if we want to survive.
So I would like to suggest seven principles for ensuring that we have a prepared mind.
- Have a plan for when things go wrong – and rehearse it;
- Get the right people together;
- Be open, be transparent;
- Act early, act decisively;
- Don't forget discoverability; and
- Understand and accept fully the implications of accountability and responsibility
In this blog series I will illustrate these by stories drawn widely from commercial life and beyond – not least because business is so replete with examples.
Coming next: the importance of planning.
John Deverall CBE is a member of the Resilience First board. He leads Deverell Associates (www.deverellassociates.com), helping family offices and their advisers to deal more effectively with risks. His company’s motto is “The Prepared Mind”.
This blog is adapted from 'The prepared mind’ at a time of crisis’ by John Deverell, taken from the ninth issue of the new The International Family Offices Journal, published by Globe Law and Business. See www.globelawandbusiness.com/journals/the-international-family-offices-journal