WHO can forget the Y2K bug which spawned expensive consultancies on the premise that the computers would reset all the data to 1900 when the millennium was crossed to cause plane crashes, stuck elevators, crashed bank deposits, and lost files? The biggest surprise was that nothing happened. And countries like Russia that disregarded the dire warnings racked up savings on Y2K consultancy costs and had the last laugh.
Contingency planning, or a “just in case” mindset can be costly.
Insurance companies and sellers of fire extinguishers promote the notion of over-preparedness. (City ordinances back up fire prevention measures.) Their “what-if” scenarios are powerful marketing tools to sell products or services for unlikely events taking place.
A “just-in-case” approach can be costly, meant to overcome any foreseeable contingency, including the unlikely ones. This is best illustrated in packing for a trip. The first-time traveler can be identified with her bulky luggage which includes attire for all sorts of weather, possible invitations to parties, and even food in case the airplane haul is not enough to tide her over the first night at her cousin’s place.
When moving to a new house, this just-in-case attitude pops up. While staunchly proclaiming her skepticism about Feng Shui, the housewife nonetheless scrupulously follows the prescribed layouts and orientation, placement of the stairs, hanging plants to counter design flaws on the windows. She quickly demurs when criticized for the costs she is racking up — I just want to avoid bad luck… just in case.
The cautious attitude seeps through corporate thinking as well. Layers of control are ordered in case of internal collusion. Because of this suspiciousness, Filipino corporations may have the biggest internal audit and security departments in the world. (Why do stores all have their own security guards? To take the temperature of the customers?)
The introduction of compliance rules on knowing your customer (KYC) and anti-money laundering rules has even increased the contingent of internal control. People whose only job is to watch other people to ensure they are doing their jobs are considered necessary… just in case of collusion.
In these times when on-site parties involving more than five people are no longer feasible except for the police celebrating birthdays, the just-in-case mentality of party hostesses is given a rest. Or is it? There is no need for RSVP as no one is expected to show up at the house. Does this bring down the cost of hosting?
Not at all.
There are now e-parties where up to a hundred participants can join from all over the world. And those in the environs may be sent food trays and drinks in their own homes, just in case they want to join the e-celebration from their homes. E-drinking has become fashionable. It sounds better in the vernacular as “e-numan.” Cheers.
A person who thinks of possible contingencies is good to have on one’s team. She is the one who will have the first aid kit when someone cuts his finger in the out-of-town event. She also breaks the budget for the event for ordering extension cords, stand-by generators, and a tent in case it rains.
Inventory management has introduced efficiencies and cost-reduction with “just in time” ordering to free up storage space and eliminate excess inventory. This approach has been taken a step further by retailers. They have done away with storage space altogether and expanded selling space. All the products are stacked in active shelves for the shopper so that if it’s not on the shelf, the product is simply not available. And artificial intelligence notes the emptying of shelves and re-orders items for re-stacking. The new science of supply chain management tries to bring contingent inventory levels close to zero.
“Just-in-time” dealing with crisis is a low-cost approach to risk. Being jolted out of one’s comfort zone unprepared allows us to learn life’s lessons to adjust to the new normal. And this has been going on for seven months now.
Of course, there are prayers and the consolation of friends (though not financial subsidy) that get us through life, along with a dwindling bank balance. If we get through this health and economic crisis, where can we go for a trip…. just in case we are still able to?
Tony Samson is Chairman and CEO, TOUCH xda
