Major Business Disruptors – Are You Prepared?

Module Two: Risk Assessment Awareness – Strategic Risks
By Chuck Harris

You can’t prepare for a disaster that has already happened. The best anyone can do is be aware of what can happen, and create a strategic plan to deal with the disruptive event should it ever confront them.

First step: Awareness, so you don’t get blindsided by the disruption.

Second step: Preparedness so, if and when the worst happens, you can cleanly implement your plan, without being immobilized by the disruption.

Third step: Take action, so you can move forward confidently and not look back.


Four major disruptors (the 4 Ds) can severely affect both the operation and valuation of your company:

  • Death
  • Disability
  • Divorce
  • Drugs or other addictions


You may have never considered the effects the 4 Ds could have on your future. Now is the time to think about being proactive and intentional, instead of reactive and emotional … should a worst case become your reality.

The Four Ds create disruption, regardless of whether the death, disability, divorce or drug addiction applies to you or another key person at your company.

A few words of wisdom from former President Theodore Roosevelt: “In any moment of decision, the best thing you can do is the right thing. The next best thing you can do is the wrong thing, and the worst thing you can do is nothing.”

When assessing the risks you face, the best approach is is be confident and act boldly.

Death or Disability

Here are several High Payoff Actions you can take to help get your company prepared for the death or disability of the owner or a key member of the leadership team:

1. Have a Business Plan in place that defines company vision, values and mission – and how the company will operate to fulfill the owner’s vision and the company’s mission.

Red Flag Question: Do you have a current business plan for your business?

  • _____Yes – Good for you!
  • _____No – Consider creating a business plan to guide the strategic vision of your company.

2. Know the value of your business. Have your business valued by consulting with a business attorney, business broker, business insurance specialist or CPA.

a. The Accelerated Cash Flow System can help you obtain a business valuation at a very modest cost compared to other options. If you don’t know the value of your business, ask your coach how to obtain one.

b. When business partners are in agreement about the value of a business before the loss of a partner occurs, the transition process can proceed without argument. Update the business valuation every couple of years. If you use the Accelerated Cash Flow System valuation model, your valuation will be updated automatically each year.

c. Should the valuation turn out to be less than anticipated, you can work on growing the value of your business to command a premium price when you decide to sell.

Red Flag Question: Do you have a current business valuation?

  • _____Yes – Congratulations!
  • _____No – Add business valuation to your list of High Payoff Activities!

3. Create a Succession Plan. Consult with a business attorney (preferably one who specializes in estate and succession planning) to create a plan for how your ownership interest will transfer upon your death, and how the value going to your estate should be distributed.

Red Flag Question: Do you have a succession plan in place?

  • _____Yes – Congratulations!
  • _____No – Add creating a succession plan to your list of High Payoff Activities!

4. Have a Buy-Sell Agreement in place, with your business partners, along with a mechanism to fund the agreement. The Buy-Sell Agreement will be part of your succession plan.

a. The funding of a Buy-Sell Agreement is typically done with insurance policies purchased on each of the partners, naming the others as beneficiaries.

b. Seek out the best succession planning/estate attorney you can find. Your family and business partners will thank you for getting this right, should you be the first one to stop breathing.

Red Flag Question: Do you have a buy-sell agreement with your partners?

  • _____Yes – Congratulations!
  • _____No – Add creating a buy-sell agreement to your list of High Payoff Activities!

5. Disability – Protect Yourself, Long and Short Term
It’s normal for entrepreneurs to believe they will live forever and that disabilities only happen to other people. The fact is we can get so wrapped up in day-to-day opportunities and challenges (the tyranny of the urgent), that we forget the risk of becoming disabled and unable to work. All it takes is a call to the insurance professional you work with, to discuss and then act to ensure your income continues in the event of a short- or long-term disability.

Red Flag Question: Do you have disability insurance?

  • _____Yes – Good for you!
  • _____No – Add contacting an insurance agent to your list of High Payoff Activities!

Divorce – Statistics from a family law firm (unverified) are as follows:

  • 42% of first marriages fail
  • 60% of second marriages fail
  • 73% of third marriages fail

These figures do not account for legal separations, or those living in relationships outside of marriage.

The dynamics of a deteriorating marriage can drain energy and focus, and create havoc, within a company when the affected person or people have key responsibilities.

We won’t address the obvious need for professional and emotional support when people’s lives are melting down due to relationship issues. Our purpose is to address the financial risks to a company when these unfortunate situations occur.

Consulting with an attorney about strategies for protecting or dividing assets, while making provisions for those affected by the divorce, can be worth considering.

Drugs and other addictions

Whether in a company environment, or in the homes of those who work at your company, drugs can create volatile and dangerous situations:

  • Potential of injury or death
  • Conflicts between people
  • Possible embezzlement to pay for a drug or gambling habit
  • Destruction of relationships affecting both business and personal life

Having a defined and well-documented policy about use of drugs in the workplace, and how related situations will be addressed, should be part of a company handbook.

Red Flag Question: Does your company have an employee handbook, with a clearly outlined policy towards drugs in the workplace?

  • _____Yes – Outstanding!
  • _____No – Add creation of an employee handbook to your High Payoff Activities list!

Vigilance and awareness will go a long way toward reducing the negative impact of drugs in the workplace.

If you answered “No” to any of this article’s Red Flag Questions, your company is at risk. Seek professional guidance as appropriate.

Remember the words of President Teddy Roosevelt:

“The worst thing you can do is nothing.”

Don’t wait. Take action! You’ll thank us later.

High Payoff Activity: Review your answers to the Red Flag questions in this section, and make a list of where you need to act to protect yourself from the 4 Ds of business disruption.

(If you’re ready to embrace Christ, He’s ready for you. Visit C Suite for Christ to join in Christ-centered fellowship with other professionals. Submit a prayer request for a pressing need in your life. Participate in a virtual prayer session to ask God to be with those who have submitted requests. Follow C Suite for Christ on LinkedIn and Facebook. Questions? Contact Paul M. Neuberger at (414) 313-8338 or

Recommended Posts