- In 2001, a commercial airplane flew into a building and the world changed forever. Regardless of your opinion of him today, back in the day, Rudy Giuliani was considered a national hero. As the Mayor of New York City on 9/11, he orchestrated the city’s response and is credited for preventing far more deaths. A couple of years after this tragedy, Giuliani was asked how New York City was able to mobilize and respond to this crisis so quickly and effectively. His response is a lesson for us today.
Giuliani said New York City had a “war room” at City Hall.
This room contained more than 50 different plans for responding to different potential crises.
There was a plan for a dirty nuke in New York Harbor and another plan in the event the water system was poisoned.
There was a plan for a bomb in the subway system and a plan for a 100-story office building catching on fire.
When 9/11 happened, the leadership of New York City headed straight for the War Room and began pulling different response techniques from different plans.
In less than 30 minutes, they knew what to do and how to do it. Not because they had a plan for an airplane hitting an office building, but because they had so many other plans already developed.
Here is the message: You will need multiple plans on the shelf as this crisis winds its way through our economic system. You need to develop a robust sensitivity analysis with varying assumptions for revenue, expenses, cash collections, cash burn, and timelines.
Waterfall or cascade your expense structure assuming various cash collections and revenue events.
No one has the ability to predict exactly what will happen next, but thinking about and developing various plans in the event of varying outcomes will guide and accelerate your response time and reduce the risk of getting caught flat-footed.
Question: If I knew this crisis was going to last for three more months, what are the decisions I would make and what actions would I take? When would I take them? What if it was six months instead of three? When the crisis is over, what is your revenue for the following quarter? What if it is less than 50% of your pre-crisis revenue? (In asking this question, I am not suggesting that timing is accurate, but rather challenging your assumptions and thinking to cause you to create some additional plans.)