LETHALITY

By Dr. William T. Hold, CIC, CPCU, CLU

Lethality is a term commonly used by the military. While it can have various interpretations and usages, the term conveys a lethal and overwhelming force that will deter enemies and assure victory—a force that has both the “will to prepare to win” and the actual “will to win.” 

In its harshest terms it asks a fundamental question, “How is what we are doing going to destroy more of the enemy faster?” 

However, the concept of lethality can provide a useful framework for business management, because it offers an approach focused on assessing the threat or serious harm that various objects, events, and decisions could cause the business. 

In addition, these assessments will help develop and implement strategies that could be important in protecting the business’s continuing development, growth and success. Perhaps the simplest example is first asking a potential product liability client to explain what their product can do and what it’s not supposed to do rather than asking what their product is supposed to do.

The key questions

Underlying the concept or framework of lethality is asking or properly framing the right questions. Unfortunately, these are not the questions you want to be asked or that lead you to a predetermined answer or are easy to answer. They are the difficult questions that often require analysis and thinking that transcends “hope and wishful thinking,” personal and political biases/preferences, societal beliefs, and social media pressures.

There is convincing evidence that in recent times lethality was not fully or properly considered in the decisions made by the leadership/management of a well-known brewery and a legendary entertainment firm.

In the former, Budweiser’s promotional campaign for light beer met with lethal consequences based on leadership not fully understanding their existing customer base; the potential for literally billions of dollars of lost revenues and a marked decline in shareholder values were not fully explored or even properly evaluated. In addition, there was a protracted alienation of the existing customer base.

In the latter, Disney’s involvement in political issues and revisions in artistic direction resulted in significant revenue declines and disaffection by traditional audiences. Last, important negative regulatory issues and actions have ensued.

While there are too many important and crucial questions that face businesses of all sizes to be fully discussed in this column, there are three that encompass multiple decision groups. Each of these involves asking the important question and having the courage to develop the most accurate unbiased answer(s).

1. Value of the entity. The first question looks at how the actions of management will increase the value of the business entity. Will management’s decisions actually increase the value of its services or products to clients and customers?

Lethality can be introduced into strategic planning as an element in the process of evaluating the impact of strategic decisions and/or directions on the long-term competitive success of the entity.

For example, an entity entering a new market without a well-grounded understanding of the regulatory environment, customer preferences, and competitive pressures can be exposed to risks that become lethal financially.

By identifying market weaknesses and opportunities, management can develop more efficient and effective initiatives that emphasize the entity’s strengths and reduce the impact of weaknesses.

2. Achieving key objectives. How will the actions of management achieve key objectives? Viewing key performance indicators (KPIs) through a lethality perspective can enable management to more readily discover warning signs of threats and opportunities. Monitoring indicators that focus on elements of financial strength, operating efficiency, and market position can help management, in a sense, “get ahead of the game.”

Lethality considerations can assist management develop a more flexible and adaptable culture within the organization. Focusing on the threats posed by working in rapidly changing and divisive economic and social environments can empower employees to work in a more transparent, innovative, and flexible fashion.

A fashion that allows them to respond more effectively to both challenges and opportunities and have a “fighting chance” of achieving key objectives. 

3. Different in the future. How will management actions prepare the business to be different in the future to achieve key objectives? The following question is, will management be able to change the business in the short-or long-term future?

Again, lethality becomes important because it extends far beyond physical harm into the realm of the impact of sloppy, inadequate, or wishful thinking that masquerades as “planning.”

As many businesses look to the future, they could consider a new business name, restructuring the corporation or partnership, consider new marketing strategies, offer new products, purchase other businesses, or sell/merge the current business.

Embedded in each one of these considerations or actions are unforeseen or not fully understood consequences that could impact the business in a negative or lethal manner. The purpose of lethality considerations is not to stifle change or throw “chuck holes” in the road of progress. The purpose is to carefully prepare for success, to prepare to win.

The power of questions

Underlying the thought processes related to lethality is the crucial issue of asking the “right questions” to obtain the answers necessary for successful decision making. While both questions and answers are crucial to effective problem solving, it is difficult to get an answer without first asking the question.

However, the one glaring exception is if you do not ask a person to do something, their answer will always be “no,” because you never gave them a chance to say “yes.” Therein lies the power of the question needing to be asked.

Why, then, are many people essentially afraid to ask questions at meetings, large or small, or even at more intimate gatherings? The overriding reason is that they are afraid of being viewed as being somewhat ignorant or ill-informed and that asking questions will bring attention to their perceived inadequacies.

At the other end of the spectrum, we have those individuals who frequently ask questions not to seek information but to demonstrate their wisdom and knowledge to those assembled.

Then we have the poor soul who waits until the end of a meeting or conversation to ask a question. However, this individual never asks their question because they do not want to be “drawn and quartered” by others for causing the meeting to go “over time.”

The characteristics of good questions include being purposeful, relevant to the subjects being discussed, clear, neutral in intent, and specific to the information desired—and, most important, “asked.” 

Meetings, gatherings, and personal conversations highlighted by insightful questions and answers can produce “practical results and solutions,” ones that minimize lethality. “Practical” is the bonding agent that allows the experience of the past to be fused with a solid vision of the future.

“Practical” separates a meeting, class, or conversation in which you learn something valuable from one which is nothing more than a mutual exchange of ignorance between participants or between the presenter and participants. While “practical” has many virtues, including efficiency, timeliness, and relative ease of use, it allows actual implementation.

Implementation is a key element in the answer to the question of “How do we win?”

The author

William T. “Doc” Hold, Ph.D., CIC, CPCU, CLU, is executive chairman of The National Alliance for Insurance Education & Research, which he co-founded in 1969 as The Society of CIC. Under his leadership, The National Alliance has grown to become one of the most prestigious insurance education organizations in the world. In this column, Doc shares his personal insights and opinions, which are not necessarily those of The National Alliance or its board members.