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Anticipating Changes in Irresistible Forces: History, People, and Precursors

Apr 7, 2008
The actual irresistible forces (such as upward pressure on health-care costs) that cause the effects you are experiencing (such as declining bed utilization in hospitals) have probably been in place for some time. To approach the ideal best practice in anticipating changes in irresistible forces, start by looking at the history of the original irresistible force to see what conditions coincide with its direction, rate of change, and significance.

Simple statistical tests are adequate for this purpose. If you don't know how to conduct the tests, arrange to have someone help you who is familiar with the process. Basically, what you want to do is to determine what preconditions are usually associated with changes in the factors that are of interest to you. This can best be done by comparing data series from earlier time periods that precede the changes you are studying to see what early events are associated with the events you are concerned with.

Those in the Know

Statistical tests will rule out some potential causes, but you'll still have a long list of possible causes to check. You need to find people with the knowledge and experience in this irresistible force area to differentiate among them to tell you which ones are more likely to be the actual causes. Use those closest to the problem or who have outstanding expertise on the subject.

If these are factors affecting customers, talk to customers. If they affect shareholders, talk to shareholders. If they come from government policy, talk to those who create and implement government policy. In each area, these people are the experts who can help you to link cause and effect.

You'll get even more help if you show them what you think you have learned from the statistical analysis. Some of them will be able to spot the potential influence of other factors that you may have ignored. Don't forget to get ideas and help from those who may have been studying the subject matter for some other purpose.

A Forward Look

You will often draw the wrong conclusions about irresistible forces if you only review historical relationships. For example, when oil-exporting countries were discouraged by low prices prior to the Arab oil embargo of the early 1970s, they mostly complained but took little action. OPEC's efforts through the embargo and reduced production to cut the supply then proved to be a very effective way to raise prices.

In 1998, oil prices were again relatively low in constant dollar terms, but no cartel-led reduction in supply is likely to raise oil prices nearly as much this time. It would be easy to totally dismiss the consequences of new highs in constant dollar oil prices, because the likelihood of this occurring seems remote.

But that viewpoint overlooks the fact that certain kinds of military action could create a price effect similar to the Arab oil embargo. Damaging the world's major oil fields would greatly reduce current and future production. Many oil fields, especially those located offshore such as those in the North Sea, are vulnerable to sabotage as well.

When it tried to annex Kuwait, Iraq set the precedent of being willing to invade another producing country to gain reserves. Several oil-producing states are rumored to have links to terrorists who could destroy capacity, while others have military forces that could inflict such harm.

Although invasion or sabotage would be unfortunate and few would wish that either happens, either occurrence is one that would make a lot of sense for certain political interests to pursue. From this example, you should now see why your enterprise should prepare scenarios for such kinds of irresistible force causes.

In addition to being better prepared to deal with the consequences, should they occur, you can learn what the precursors of such an event would probably be and thus be better able to anticipate it. For example, increased reports of dissident terrorist groups operating in or supported by oil-rich countries would be one sign to look for. Notice that the only action you may need to take (unless you are in the petroleum industry) is to secure a long-term price contract, not subject to a war clause, for your petroleum and petroleum-based product needs. Yet, by taking only this action, the savings over several years could be enormous.

If oil prices should rise for some other reason that you did not anticipate, you would still be protected. In fact, studying the history of petroleum prices would have shown that whenever the prices reach a new low in constant dollar terms, it is a good time to secure a fixed-price supply.

Any business that took that action in 1998 would have cut its petroleum costs in half by the end of 1999. Here is another example of how flexible arrangements can create benefits regardless of future circumstances.

In addition to being prepared for all circumstances, using scenarios to look into the future implications of today's and tomorrow's potential events is certainly another way to approach the ideal best practice in anticipating changes in irresistible forces.
About the Author
Donald Mitchell is an author of seven books including Adventures of an Optimist, The 2,000 Percent Squared Solution, The 2,000 Percent Solution, The 2,000 Percent Solution Workbook, The Irresistible Growth Enterprise, and The Ultimate Competitive Advantage. Read about creating breakthroughs through 2,000 percent solutions and receive tips by e-mail by registering for free at

http://www.2000percentsolution.com .
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