Would you keep live hand grenades in your desk drawer? Not unless you are Blackwater Intenational. That being the case, why do so many companies keep comparably deadly problems in their metaphorical desk drawer for months or even years without dealing with them?
What are we talking about here?
Single Points of Failure!
A single key employee that has unique knowledge required to do your business. What will you do if they move on, or (in business parlance) get hit by a bus?
A single advertising medium can be a big risk too. If you depend on being on the first page of Google for most of your business, you are going to have problems if or when you are no longer at the top of the search results.
An outsized large client – If your company depends disproportionately on one client like Wal-Mart, then you are clearly at risk.
A Single Sales Channel – I was a partner in a company that depended disproportionately on EBay for moving physical products from its warehouse into consumer’s hands. This eventually got ’em in big trouble – as Ebay policies frequently changed, and their systems could be unstable.
A Single Financial Pathway– This is a huge one. If you are an online merchant, what will you do if your merchant account gets yanked out from under you? (This happend to us in 1999) Depend on PayPal? What would happen if they suddenly demand over $1 million in warm, fuzzy, escrow money to contine using them? (This happened to us in 2008).
What is the magic solution, the bomb squad that will remove that live grenade out of your desk drawer?
One word: Diversification
Diversification is a buzzword in financial markets for a reason. It makes a critical difference when things don’t go as planned…and things frequently don’t go as planned. Look through your organization and play a game of “What IF?” and consider what would happen if any of the various cogs and wheels that make your company operate should break, disappear, or stop working. If your investigation hits on any points that make you feel uncomfortable, sick at your stomach, or like you want to throw up on your’e desk — you’ve hit gold!
Hire more talent and train them to know what your key people know. (This can be TOUGH to do, but should be part of your plan — even if it is a long term goal).
Build diversification into your marketing plan. Invest in alternative methods of reaching your customers like pay-per-click, traditional advertising (if appropriate), social media, etc. Hope for the best, but plan for the worst. It will mean more business in good times, and better survivability in bad times.
Establish multiple payment methods for your transactions. (This too can be hard, but you will never regret finding a viable solution to this single point of failure.)
The Takeaway (and an excellend sound-bite): Fix single points of failure before they bite you in the back-side!