Best word business ever added to its decision-making vocabulary

Arguably the smartest business word ever uttered, and adopted into the business vocabulary, is “contingency.”

The dictionary defines contingency as “A future event or circumstance that is possible but cannot be predicted with certainty.”

Doesn’t that apply to just about every aspect of strategy in any sector?

Nothing can be predicted with certainty and nothing is guaranteed. For that matter, nothing is impossible, either. Leaders, then, have to plan accordingly. Hence the importance – and value – of contingency planning. Plan for contingencies, structure for contingencies, embrace contingencies.

And this includes every aspect of how the organization is structured. As Jim Collins stated in How the Mighty Fall,

There is no organizational utopia. All organizational structures have trade-offs, and every type of organization has inefficiencies. We have no evidence from our research that any one structure is ideal in all situations, and no form of reorganization can make risk and peril melt away.”

 

Contingency planning means considering what could happen, and having potential actions in place if it does.