Leaders at progressive businesses take advantage of uncertainty and volatility. They power through difficult times to leave the competition in their wake - and they sustain their gains.
Winners spurs innovation, change strategy and take risks, while others are eaten away by conservatism and cost-cutting
Leaders of progressive businesses prepare to turn even before turn are visible, their mindset and actions before, during and after the turns separates them from the pack and determines businesses long-term destiny.
These turns may be sudden and can blindside you unexpectedly. These uncertainties often coincide with increasing need for business leaders to react at various levels. Make decisions when leading indicators are showing no conclusive signals.
Act Now without waiting for clear signals
Unlike most other leaders waiting for clear signals to make big moves, disruptive leaders act when there is still uncertainty, they avoid defensive costing cutting measures or taking a “wait-and-see” approach.
According to research a very small number of companies broke away from the pack during the [ Great Recession] - and their performance continued to improve for the subsequent decade
In today's business environment benign right is only the half batter, businesses need to be fast. When the environment changes, the companies that are fast at making decisions are the ones that ones that wins
Leaders Do 2 Key Things Differently :
- They position themselves to power through uncertain times, not simply respond to them. Commit before the turn to the differentiating elements of their strategy including talent strategy.
- Effectively balancing top - and bottom - line growth business conditions, not just focusing on cost cutting which typically comes at the expense of top-line growth.
Power through volatility and uncertainty with a proactive, concerted and coordinated approach.
- Test your team’s current preparedness to make decisions and act confidently as opportunities or risks quickly materialize.
- Re-examine key leadership messages and talent positioning to ensure that the organizational climate is “turns-ready”
- Increase discipline allocating resources.
Strategy: Act Confidently Despite Uncertainty
During uncertain times it's easy to become distracted, and ultimately paralyzed, by the changes and risks. Leaders need to strategically stay focused on growth and transformational initiatives, without shying away from critical decisions like investments, acquisitions etc.
3 Things to do to prepare
- Proactively consider how priorities and criteria could change under alternate scenarios.
- Adopt a bottom-up-approach to a variety of assumptions to better capture and reflect uncertainty.
- Evaluate how investments and actions available today may not be available or open for business development in the future - model “end-state”
Talent Management: Prepare your workforce for the future
Typically for most organizations talent accounts for ⅓ of the cost base, downtime present an opportunity to revamp your playbook around hiring, development, and performance management,
3 Things to do now to prepare
- When fortune turns, the best talent wants to be on a winning team and is more willing to move companies. Identify competitors for critical talent and, especially ones that are struggling and harbor talent who could be restless.
- Too many HR programs, services and training are maintained by default; winners make sure to prioritize those that deliver value. Use changing times as an opportunity to reorient talent programs and services to align more closely with the future needs of the company.
- Make sure to build and nurture engagement among leaders. During the turns, leaders are asked to do and contribute more just as rewards and promotions become rarer. Winners proactively build their leadership bench strength, in part by weeding out stagnant leaders, and they ensure space and opportunities for the next generation of leaders.
Cost: Guard growth and elevate innovation funding
Smart cost management hinges on cost optimization — a continuous process of using resources to create and protect your business’s sources of value while reducing costs as much as possible.
3 things to do now to prepare:
- Get all stakeholders to agree on how to simplify, consolidate, automate, outsource and otherwise reprioritize or deprioritize their activities.
- Depolitize cost-performance tradeoffs and have management buyin to ensure that a clear “cost architecture” is established for all subsequent tactical decisions.
- Protect critical growth and innovation initiatives, assign accountability and authority to “growth guardians”.
Conclusion: No one is immune to volatility of changing times
In this digital age every company faces multidimensional challenges and business model changes, changes in value proposition, profitability, capability or customer base. No business is immune to today’s ever changing business, economics and operating conditions, some may be more protected than others but no one is immune. Winners spur innovation, change strategy and take risks, while others are eaten away by conservatism and cost-cutting.