How to Make Your Company Disaster-Proof
When starting a company or running one, take a lesson from the resilient palm tree: bend, don’t break.
It turns out that palm trees are not actually made of wood. Who knew?
Bear with me for a quick trip back to 10th-grade biology. Your typical tree is a dicot, with a rigid wooden trunk made up of concentric circles. But a palm tree is a monocot, and its trunk is just hundreds of flexible “vascular bundles” suspended in soft tissue. (I didn’t know this either. It’s in Brian Capon’s Botany for Gardeners, which is actually a pretty fun read.)
Basically, a palm tree has a lot more in common with a blade of grass than it does with an elm. And like grass, palm trees are incredibly flexible. I don’t mean just swaying-in-the-breeze flexible. We’re talking honest-to-goodness, bent all the way over, leaves-touching-the-ground flexible.
By the next day, that tree will be as good as new. In fact, when it repairs the vascular bundles that did get damaged, the tree will be even more flexible than before.
How about your company? Can your business bounce back after a hurricane, or will a catastrophe cause it to snap in half?
For example, we still have a rocky road ahead of us, but it looks like the economy is starting to recover. How did your company fare during the last downturn? How are you preparing for the next one? Economic flexibility means having a diversified customer base, maintaining good cash flow, and continuously exploring new product lines to develop and services to offer.
Another place that warrants a great deal of flexibility is the exponential growth of new technology. It’s devastating for a company that’s successfully meeting a particular consumer need to find itself suddenly obsolete. If your market niche could be outstripped by new technology, you need to brainstorm some alternative business plans. Some companies have managed to do this successfully. Polaroid didn’t.
And then there are unexpected personal tragedies. No one gets out of bed in the morning planning to have a heart attack or get hit by a bus, but it does happen. If you died tomorrow, would your company survive? Decide who should take ownership of your share of the company (Your business partner? Your spouse?) and have the appropriate legal documents drafted. Better yet, do thorough succession planning, putting the right systems and people in place for your company to be able to carry on long after you do.
With the right planning ahead of time, and maybe a little bit of luck, your company will be able to bend rather than break, no matter what storms come your way.