How to protect your business from unexpected problems using systems analysis?

How to protect your business from unexpected problems using systems analysis.

What am I talking about here? Well, it's been a very interesting day.

So today is the first of a three-day workshop that I have done for the last couple of years.

And it is called the fact map experience.

It's run through Wake Up Warrior.

And the problem that I've got is that living here in Australia at 9 am Los Angeles time is brutal.

4 am my time so I've been up since 4 am, finished at 12 pm.

I'm slowly getting my head together, it is a challenge to cut sleep at my ripe old age of 44.

But the experience itself is critical.

Why? Because it establishes where am I right now, and then opens up for where 2022 is going to lead me.

But that wasn't the only thing happening today.

The other thing, which was rather exciting, possibly overkill, was the installation of a 9.7, or 9.

8-kilowatt solar array onto the top of my house.

Now you might say, Mike, what are you doing? What is this like in the 21st century? How come you haven't got solar? Well, the crazy thing is, we actually already have a six-kilowatt solar system on there, and we still have enormous bills.

You might think, Well, what's going on? Well, number one, pool number two, a theory of mind.

Number three, General, excessive usage.

I don't know what's going on.

But our bills still remain really high.

So much.

So my wife has spent considerable amounts of time going do is the solar even working on like it is we just consume so much power, that it's worthwhile putting a second solar system on.

So now we have two solar systems on the roof, excited to finally see my bills come down.

What is really cool is that this is an expected return on investment of on the return of investment of around 25 to 33%, it should pay itself off in three to four years solar panels on the roof, paid off three to four years after that next 25 years, it continues to develop electricity for my family.

But that's not its only use.

You see recently we had storms come through that knocked out the power and our neighbors didn't lose power.

Why? Because they had a battery.

And you see, what I am planning for is to install a battery, in addition to the solar panels to ensure a backup system exists.

Why would I do that? Well, just in case you haven't noticed, there have been some severe disruptions to supply chains to generally getting stuff done.

And the model of the 80s, the 90s 2020 10 of lean manufacturing, each weakness is exposed.

You see lean manufacturing works very well just in time.

But that assumes that everything that gets everything just in time works.

And that is no longer applicable.

So your systems in your business are dependent on other businesses having their stuff together.

And it's not even that their stuff is together, it's just uncontrollable events now starting to cause more and more problems.

So I want a backup, I want a secondary system, I cannot control what goes on out there on the main electricity grid.

And so getting solar plus a battery gives me a backup.

And I'm willing to pay for that, even if it is higher priced than the electricity from the grid.

Why? Because there are problems with trust.

And this is worth thinking about why because my house is rural.

So when the electricity stops, it doesn't just stop the lights and the dishwashers and the computers, it also stops the water pumps.

So electricity to me is critical.

And there will be systems like this in your business that appear to be independent of the rest of the world but they are not.

And by thinking about hey where what are the inputs to this system, and then your business runs it systems and outcomes the output of a higher value sell those but notice that if your inputs are under threat, then you will suffer.

Your business may suffer and it's worse If while thinking about this as worthwhile, well, how can we counteract that risk? Where else can we get that input from in my case, it's like, well, let's get the solar energy from the sun stored in a battery.

And then if the grid goes down, I've still got electricity, we may see, and we are highly likely to see continuing problems.

You see, one of the challenges of this whole COVID experience is that the number of problems, let's call it problems by choices that have been made, may cascade, much like a nuclear reaction where you've got a couple of electrons at the beginning, not electrons, I think they're protons, and that triggers 10 More, and those 10 Go out and trigger 15.

And those 15, trigger 25.

And suddenly, what started is for is 25, in a very short period of time.

And we may well experience this, why? Because our world typically does not pay attention to systems, there's very little awareness of how systems work, how to set up systems, so they do work, how to look at systems and analyze them for risk.

And this own means that we have as a society risk of things getting worse, far more than you would expect.

You're like, Well, how did that one little thing over here cause these massive problems? The classic example in Australia right now and perhaps worldwide from what I understand is, so you reassured EJ? Why do we need urea? Well, urea goes into making a substance called ad blue, now this ad blue, whatever, you know, who cares about our blue? Do you use our blue, I actually do have our blue.

Why? Because I got a V six Amarok.

And on the European emissions laws, it needs blue.

Now, if an ad blue shortage happens, I can't drive my truck.

Okay, big deal, who cares.

But if that is the case, guess what else runs on AdBlue the trucks in Australia, all the trucks in Australia that are modern, actually require this, if they're made by Volvo, if they're made by Mercedes, if they're made by VW, whoever they're made by, if it comes out of Europe, they're running an ad blue.

Now you can bypass it, you can bypass it.

And we may have to do that.

But there will be further consequences because of that.

So you get your trucks running, which is great because otherwise, we're running into food shortages, supply shortages, medical equipment, shortages, everything that gets transported on trucks.

And Australia in its great wisdom did not think that we would need a secondary distribution system.

So our rail network has been neglected.

So we have an inadequate rail network, with trucks that run on a substance that we're running out of and potentially will be completely devoid of by end of January 2022.

That's like six weeks away.

And if that happens, there are major distribution channels for the entire country on the threat.

Now we got some serious problems.

And my ability to run my house electricity could potentially be under threat, why? Well, perhaps a generator blows? And they're like, Great, we'll put the generator on the back of the truck or no, the track trucks got no blue.

We'll see you in eight weeks, we'll see you in 12 weeks.

And suddenly, what starts out as a small problem causes a big problem.

And you must think about this, you must spend some time working out well, how do your systems work? I'll give you a clue.

Number one, there's an input, there's a bunch of stuff that's done.

And there's an output, your inputs must be looked at.

In a regular reality, no big deal.

You can expect those inputs to come in with regularity on time on the schedule, but we are not living in that world anymore.

We got some problems coming.

And so you need to consider the inputs if they're not available.

How are you going to deal with that? How are you going to cope with that? Can you reengineer the system? Can it use a different input? Can you source locally? What are you going to have to do in order to keep your business running? If you do not think about this and suddenly you are surprised and you wake up on a Tuesday morning and there is no electricity or there is no timber or there is no AdBlue or there is no x whatever that x is Now you got a big problem.

If you have thought about it beforehand and go, Okay, well, what are we going to do? Okay, we're going to need to disconnect the AdBlue systems, we're going to need to override them.

We're going to need to use a different input whatever it is, you got to think through this from a systems perspective.

Alright, that's all I got for you today.

I hope you're having an awesome day.

Do consider what risk you have and what you can do to get on point and manage that risk.

Look forward to seeing your next episode as we continue this journey into the power systems crave results.

See you then.