Leaders must set up their organizations for success in uncertain times, but leaders have trouble managing uncertainty. Uncertainty is associated with risk. To avoid risk, business leaders tend to reduce spending and take a defensive posture. These defensive moves leave them worse off and do not leave them ready to take advantage of an economic upturn.
To plan for success, leaders should evaluate multiple options through scenario analysis. If they understand their metrics, they know what their capabilities are, and how they can pivot to develop new products and services that meet client needs. As uncertainty evolves, companies must use an adaptive strategy, being able to move in alternate directions as more information becomes available.
During this pandemic, with changing information from different sources (federal, state, local governments, C.D.C., S.B.A., etc.), leaders must make decisions with the information available to them at the current point in time. Being able to pivot by knowing the different scenarios is vital. While doing nothing is an option, it should be noted that this is a decision in and of itself, and it typically makes businesses feel like victims.
Companies should align their cost with their short- and long-term goals. This is difficult, especially for brick and mortar companies that have been mandated to be closed. These businesses should determine the best use of stimulus cash and the prospects of going into debt. They should evaluate the viability of pivoting to new services. Since this is not possible for a lot of these businesses, the managers and owners should show leadership by keeping employees and stakeholders informed, trying to minimize the damage to employees, and upholding their values. Managers should share what they are thinking and explain how they are relying on personal and company values as a framework for decision-making. In situations like these, there are no metrics to show empathy with your staff.
For companies that find a way to pivot and adapt, there should be an openness to listen to all stakeholders, but especially customers. Transition or innovate into opportunities if you have the financial ability. Your employees, customers, metrics, and values will be a guide. All stakeholders will appreciate your transparency on why and how you are pivoting.
If your financial metrics dictate that you must first heal the company, then lead by making the tough decisions. Do not blame the pandemic for all your problems. Market downturns highlight inefficiency; they do not create it. Again, let your employees, customers, metrics, and values be your guide.
Leadership is not just being out in front, making the decisions, it also entails having the trust of your employees and customers that there is a plan, even if that plan changes as you get new information. Remember, even with all the current data, your implementation might not work as planned. Learn from your this, adapt, and move on. And believe with confidence that our current circumstances will change.
Focus on the final target state, and work on the steps to get there. By actively managing and leading your company, you can set your business up for long-term success in an incarnation that is adaptive and responsive to changing times, leading to success.
Check out C2CB.co if you need a clarifying, no-obligation discussion, or some pro-bono consulting help about how we might help you identify and mitigate risks.