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Think Fast

There's no such thing as a surprise--not if you're paying attention.

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This story appears in the May 2004 issue of Entrepreneur. Subscribe »

Kenneth G. McGee doesn't believe in business surprises. There is always warning of a profit shortfall or other event, maintains the Gartner Inc. analyst, basing his claim on studies of numerous disasters in and out of business. In Heads Up: How to Anticipate Business Surprises and Seize Opportunities First (HBS Press, $29.95), McGee analyzes events ranging from the 9/11 attacks to the WorldCom accounting scandal and shows how available information could have been used to "predict the present" and avoid the subsequent debacles. Predicting the present can also help you exploit opportunities, he adds.

Whether avoiding trouble or seeking growth, start predicting the present by identifying your largest contributors to revenues and costs. Pick out the information most relevant to those activities. Then make sure decision-makers have the information and act on it. The approach need not be complicated. McGee describes a home builder who found that many extra costs stemmed from poor coordination of subcontractor visits to construction sites. Using a simple, centralized system for scheduling subcontractors, the company cut the time required to build a home, increased per-home profits, and freed additional working capital for growth.

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