Torpedoes in the Water

Torpedoes in the Water
How many “hits” can your company take?

Modern naval design dictates that a ship is able to absorb multiple torpedo or missile hits without being lost. In today’s highly competitive business world, so too should a well-structured company.

In making our investment decisions at TCP, we evaluate at a lot of companies in all facets of business. But regardless of the industry, when evaluating a company’s market position strengths I always look first at how many “torpedoes” (negative events) I think it can withstand before it “sinks” (fails).

We’ve all experienced them at one point or another. Being dropped by a major account. A catastrophic loss of data. A key employee walking out the door. Regardless of the type of business you are in, events of this type can rock your organization and should be feared as potential “company killers”.

The key defense here is to continually build up your corporate redundancy. Study account lists and make efforts to diversify your sales. Reduce dependency on your largest supplier. Ensure that your junior employees are properly trained to take over when a senior staffer walks.

Take a minute and think about your own business – it’s not that difficult to determine where you are vulnerable and what steps you can take to mitigate risk.

The takeaway here is that if you put yourself in this mindset and pay attention to the details, you’ll be pleasantly surprised at how quickly you can build up resiliency in your organization. Every business will inevitably take “hits” – you just have to make sure that one lucky punch can’t bring down the whole house of cards.