Slippery Rock Gazette

Ed Hill

Synchronous Solutions

As I write this in late April 2020, our country and our world are struggling with a serious health crisis. Only a few months ago, we all expected that the Spring would bring stronger business volume and higher demand for our products. I am hopeful that when you read this in early June that the health crisis has subsided, and the economy has begun to recover. 

The Stockdale Paradox, explained in Jim Collins’s book Good to Great, focuses on the idea that we need to balance realism with optimism. The optimism part is the firm belief that we will get through this. The realism part is that none of us know exactly when it will be over. 

Admiral James Stockdale was one of the highest-ranking prisoners of war in Vietnam and received The Medal of Honor for his heroic behaviors. He helped his fellow American prisoners to endure the confinement and torture imposed by their captors by encouraging them to keep the faith that they would survive if they faced the brutal facts that they could not know when that would happen. A simple explanation of this paradox is the idea of hoping for and preparing for the best but acknowledging the possibility for the worst. That is exactly what businesses must do in our current crisis. 

This article is all about preparing for the best. It is about being ready when the country goes back to work, as it surely will. This paradox, like all of them, is best understood through experience. 

A brutal fact that we must face is that we must prepare for the possibility of a vastly different business climate for months to come. The economy will recover, but none of can know when nor how rapidly.

Different areas of the country will experience different rates of recovery and at different times.

The key will be to be prepared for whatever rate of recovery your business may experience. 

Some areas may realize a “V” upturn which means that the recovery will be rapid and dramatic. The   challenge will be to have the capacity in place to meet the growing demand. Those sales will go to the companies who can meet the immediate needs of their markets. Having suffered through months of “stay at home” orders, homeowners, builders, etc. will likely be eager capitalize on opportunities to return back to normal lifestyles. The pent-up demand could be overwhelming. 

Other areas may experience a “U” recovery during which the return of sales will come but at a slower pace. That scenario may be easier to manage, but it still presents some challenges. This condition would be a good opportunity to offer quick turns for customers who want new kitchens now. Premium pricing could be applicable if your market will bear it. In such a recovery scenario, more aggressive marketing and sales practices should be applied.

I believe that we should not expect an “L” recovery which suggests that we may never regain the business levels that existed before the attack by the Corona Virus. We will recover from this crisis; we just don’t know exactly when. 

Keep a positive attitude but maintain a level of realism and face the brutal facts. That is the message of the Stockdale Paradox.

In any case, the objective of every business should be to get prepared for any of the possibilities. During the crisis, while operational behaviors are abnormal, you should use this time to address all the things that you never had time to do when you were so busy.

Training and cross training your people. Get your capacities upgraded to be ready when the market returns.

Equipment maintenance. This is the ideal time perform all the preventive maintenance requirements on all your equipment. 

Material organization. Rearrange and relabel all your material to assure the records are correct and items are easy to find.

Remnant review. This is a big one. Go through every item and discard those that are not likely to be used. Organize what you decide to keep and assure that the records are correct with dimensions and location.

SlabSmith pictures. If you use SlabSmith or a similar photograph tool, this is a good time to assure every slab in your inventory is properly documented.

Office reorganization. Your layout and all the files that you maintain could probably use some revision. 

The list of potential projects can be infinite. Just don’t waste this time to do the things that never got the needed attention during busy times. 

Another action you should take now is to establish a firm operational plan for the recovery. Posted above is an example of a tool that can help with this planning. The column on the left lists the market segments and products that are produced. The white cells to the right indicate the projected sales volume that you might expect. The June column could be considered the base line for the analysis. Perhaps this is the level of sales that you expected prior to the Coronavirus health crisis. The white cells at the top allow a “What-If” analysis of various scenarios. In this example, it shows the results if sales are only 60% of the base line. Columns to the right show a more optimistic result in later months.

The Capacity Required section indicates the hours required per week at the existing levels of capacity at each resource step. The program allows entry of any sales projections and any “What-If” adjustments that may occur. 

The Protective Capacity Planner was designed help companies prepare for the infinite possibilities that your business could face. It can be updated as often as you wish as you gain more market intelligence during our expected recovery from this crisis.

The wisdom to acknowledge your situation and balance optimism with realism is the message of the Stockdale Paradox. This paradoxical way of thinking was the strength that led Admiral Stockdale through those trying years. Great business leaders understand and practice those principles. 

Whether it is living through a torturous imprisonment in a POW camp or surviving through the current health crisis, the Stockdale Paradox has value as a way of thinking and behaving for these trying times.

Ed Hill is the owner of Synchronous Solutions. Visit his website www.SynchronousSolutions.com
or call 704-560-1536 for more information. For more information on a customized Protective Capacity Planner and how it can help to prepare you for our inevitable recovery from this health crisis, contact the author.