The “Thrive Strategy” Continued…
How to Identify the greatest risks you face? (Part 2 of 5)
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The world seems like it’s veering toward calamity. But, how do we know for sure? And what can we do about it?
I’ve been asking myself these same questions. After much dialogue with like-minded folks, I’ve formulated a strategy. It’s the strategy I’m using to build a specific plan of action to thrive as best I can, no matter what happens.
The 5-Part "Thrive Strategy"
Maintain a Strong Mental Frame
Rational, Personal Risk Assessment
Decentralization
De-leverage
Build Institutions
In the prior post, I discussed Part 1 of the “Thrive Strategy”. What a Mental Frame is and why it’s critical for people to have a Strong Frame right now. If you missed that post, please check it out now.
Today, I’ll discuss Part 2: Rational, Personal Risk Assessment. But first, let’s address how the overall “Thrive” strategy should be applied.
YOUR Personal Plan
It’s important to keep in mind that the 5-part “Thrive Strategy” outlined above is just the foundation. On top of that foundation, you need to build your own plan. Your situation is different than mine. So, when you apply the “Thrive Strategy”, you may come up with a completely different plan than I would.
While the “Thrive Strategy” can be universal, each personal plan will be unique. Where you live right now, your sources of income, assets, and whether or not you have a family are just a few factors that must be included in your personal plan.
I’ll offer suggestions and ideas where I can, but the plan must be your own.
Rational Risk Assessment
What problem are you trying to solve? It’s not a trivial question and the answer is unlikely to be simple either. The important part of this step in our 5-part “Thrive Strategy” is to eliminate the generalized worry and fear and replace those with a sober-minded and specific summary of the risks you face.
List the things we’re worried about
Use the stoic practice of negative visualization to best understand those worries - What is the worst case scenario?
How likely is this to happen in the next 3 months, Next year, next 5 years.
What you end up with is a list of problems to solve and a priority list for which should be solved first.
Here’s an example.
As you can see in the table below, I laid out 5 specific risks/worries that I have related to the state of affairs (as I see them) in September 2021.
I then summed up a plausible worst-case scenario for me personally and ranked each risk on a scale of 1-5 for likelihood to occur within set time frames. google sheet here
Scenario Planning
Now that we’ve got our list, what do we do with it? This is where Scenario Planning comes in handy. Scenario Planning is a methodology developed in the 1950’s at the RAND Corporation. Since then, versions of Scenario Planning have been widely adopted by corporations, think-tanks, governments, and organizations like The Bill And Melinda Gates Foundation.
Perhaps you’ve heard of Event 201? In 2019 the Gates Foundation and John Hopkins University hosted a scenario planning event around the emergence of a virus which caused a global plandemic.
You can watch the event on YouTube. Here’s their highlight reel for a summary. The important part is that they imagine a potential future event and then walk through what various parties would likely do in response as events unfolded.
Whether event 201 was a dry run of the Covid19 pandemic. Or if it was simply a planning event for what occurred - makes no difference for our purposes.
Why You Need to ‘Scenario Plan’
Scenario Planning is particularly useful under the circumstances we find ourselves in today. Specifically, when…
Uncertainty is high relative to one’s ability to predict or adjust.
Too many costly surprises have occurred in the past.
There is a need to improve the quality of strategic thinking
One has experienced significant change or is about to.
There are strong differences of opinion, with multiple opinions having merit.
Your competitors (adversaries) are using scenario planning.
Scenario Planning in a Nutshell
By identifying basic trends and uncertainties, Scenario Planning helps you to construct a workable model of the future which compensates for the usual errors in decision making—overconfidence and tunnel vision.
The key challenge is to separate aspects you are very confident about (and willing to bet the farm on) from those that are largely uncertain.
With Scenario Planning, it’s important that you always keep these key questions in mind:
What are the relevant trends?
What are we very confident about (willing to bet the farm on)?
What are we uncertain about?
Where might I be wrong?
There are loads of resources out there on Scenario Planning.
For our purposes here, however, let’s narrow the focus considerably: How does Scenario Planning apply to our assessment of risk?
Scenario Planning as a Sanity Check
When talking about perceived risks/worries, Scenario Planning gives us a way to validate our assessment as rational or not. Not only do we need to know if they’re rational, we need to know if our assessment of the timeframe makes sense.
As an example from above: my worry about new lockdowns. Is it rational? If so, is my time frame rational? Or is it just a fear-driven concern of mine?
My answers aren’t complete, but they should give you a sense of how to apply these questions to your current perceived risks:
What are the relevant trends?
a.) lockdowns are increasing in parts of the world (AU, NZ, Vietnam, etc. etc.)
b.) politicians have learned that lockdowns are useful tools to exert more control
c.) a certain percentage of the population wants MORE restrictions and it’s not clear that that percentage is in decline.
d.) Fall & Winter are ahead. During these periods, one would expect illness to spread (regardless of the particular illness).
e.) as demonstrated in Israel and elsewhere, high Jab rates do not result in stopping the spread of the virus.
f.) Security over freedom. Americans have taken the crackdown on civil liberties like whipped dogs.
What am I very confident about (willing to bet the farm on)?a.) C19 isn’t going away anytime soon. If not in reality, than in the minds of citizens and politicians.
b.) A large percentage of the population are demagogic on this topic and unwilling to change their minds.
c.) Institutions and leaders in government and business can’t be trusted as sources of information or even good faith.What am I uncertain about?
a.) is there any state or country that’ll be less immune to this threat?
b.) if lockdowns start again, will they ever go away?
c.) timing.Where might I be wrong?
a.) if there were a landmark legal case which specifically forbids officials from enforcing lockdowns
b.) maybe ‘Red States’ like Florida, continue to fight the trend?
Knowing is Half the Battle
Without a rational risk assessment we can’t begin to formulate workable solutions. And solutions are exactly what we’re all in need of right now.
So, take the time to write down all the specific risks that worry you right now. Then run them through the Scenario Planning sanity check to make sure the risks are both rational and that you know which need to be acted on first.
Next up - we start focusing on solutions with Part 3 - Decentralization.
Stay tuned. And in the meantime, all feedback is welcome. Please share your comments below.
Matt this was incredibly well done. Highly rational and much appreciated.
Thanks from the UK Matt, I had already done a critical path analysis of sorts, so it's nice to know I am not paranoid. Your videos with Doug have helped me greatly.