PPB July 2021

aspects of your business that you must manage well. Red Flagging is not complicated; in fact, it is so simple that we find it very easy to overlook potential pain points. Every entrepreneur must adjust to a unique set of circumstances and factors specific to their business. Those circumstances are Red Flags, some of which can cause more damage than others. As a business owner, you may believe that everything about your business is important to your success. You should be able, however, to narrow down “everything” to a few critical areas. Again, the Red Flag approach teaches a process of analytical thinking. It does not provide a four- or five-step system to execute all tasks. My overall business plan had its own Red Flags and my overseas import process had a different set of caution points. I could not, in good conscience, make the claim that one size fits all; but here are a few thoughts to help you get started. Let’s use the construction supply business in Chapter 13 as an example. Phase One. Identify the areas in your business that are crucial to your success. The construction supply business owner, for example, needed the right suppliers to provide quality products for his customers. Without that, he cannot sustain a customer base. Phase Two. List the important, specific tasks within the crucial areas identified in Phase One (i.e., supply chain development strategy). Phase Three. Create action items from the tasks listed in Phase Two. The construction supply business owner knew that his industry had a reputation for late deliveries Red Flagging is . . . • A thought process designed to help substantially reduce a company’s error rate • An approach, not a system • Methodical mindfulness • A habit of critical thinking • A pattern of anticipation and strategic planning to address key problems, thus equipping a business to thrive • A way to identify key problem areas in a business and create a plan to avoid them, or at minimum significantly diminish their impact • Intuition + Foresight = Red Flagging Crucial Questions • What can we do to reduce the impact of problematic issues in our business, or even eliminate them altogether? • How can we sift out likely business challenges and forecast ways to overcome them? • What could go wrong here, despite our comprehensive plan? What did we miss? • How could we respond if Really Bad Thing X happened? Red Flagging: The Basic Approach 1. Assess Situation A. What tasks are critical to our success? B. What foreseeable issues related to these key tasks could prevent us from succeeding? C. Since not every issue requires a Red Flag, what kind of issues are we considering? • Low Impact – Does not require a Red Flag • Moderate Impact – Might require a Red Flag • High Impact – Requires a Red Flag 2. Devise Action Plan A. What steps can we take now to avoid committing errors related to the issues named above? B. What plan can we put in place to reduce the impact of committing any errors related to the issues identified above? 3. Execute Action Plan A. Highlight all critical action items with a Red Flag. Create a Matrix to execute our operations so that we can efficiently achieve our objectives—a written to-do list of daily tasks to perform designed to create and retain satisfied customers. If necessary, create an Advanced Matrix to address significant “What if” scenarios: What will we do if X happens? B. Intentionally execute all Red Flag action items in an ongoing manner. C. Train our team in this Red Flag approach and get their buy-in. D. Deliver what we promise. ? | JULY 2021 | 65 THINK