Are you prepared for uncertainty?

Everywhere I go recently, I hear the same complaint: the world is less predictable than it used to be, and business leaders don’t know how to react.

I have some sympathy for this perspective. For most of us, a predictable future is all we’ve ever known. In the 30 years following the wind-down of the Cold War, life became easier. We benefitted from the peace dividend. We were able to realise

Running an organisation these days can feel like a leap of faith

the economic theory of comparative advantage and spread prosperity. Developed countries were able to outsource low-value manufacturing jobs and build their economy on activities that were better paid. Other countries, buoyed by large-scale expansion of manufacturing and outsourced services, developed quickly, in many cases thriving and developing an aspirant middle class. We could maximise profits by reducing costs, optimising supply chains, and – because the business climate was so predictable – reducing the redundancy in our systems that acted as a sort of insurance policy on shocks.

Looking back at history, however, this period of unprecedented possibility and (for many) prosperity was an aberration. Most of history is punctuated by winners and losers; by people enjoying success by making big bets, while others made the wrong call and lost fortunes. Successful companies learned to hedge their bets: to make bold plans, but also prepare for a future that turned out differently. Resilience was a survival skill.

Nostalgia is a bad basis for planning, but history can be an instructive teacher. It seems indisputable that times are changing, but how can we adjust to our new reality? How do we re-tool to ensure a more robust and resilient organisation, able to deal with an unpredictable operating environment? It’s a big question, and every situation is different, but from recent work I’ve been involved with, a few points seem relevant to any situation:

Know your purpose. I’m fond of quoting rap group Public Enemy’s line, “if you don’t stand for something, you’ll fall for anything.” That may be dramatic, but it’s not wrong. The current corporate world is full of executives who are eager to say the “right” things, to act in a politically expedient way, and to studiously avoid controversy. That’s understandable, but it’s important to realise that corporate leadership exists as part of a constellation of shareholders, employees, and other stakeholders that are looking for a North Star of security in an uncertain world. Knowing what you stand for, and what you will and will not do for expediency, is an essential element of strategy right now. By contrast, waiting till you’re “in the moment” before you make the necessary decisions is a surefire way to head in a direction you may later regret.

A great deal of our work starts with helping our clients identify their purpose in a very concrete and practical way, and then with helping them orient decision-making and communication to start with their core principles.

Optimise systems for flexibility. By pursuing efficiency, organisations in the last three decades were able to provide unprecedented prosperity to their shareholders, and the wealth created enriched the lives of billions across the world. Unfortunately, getting it to work relied on a stable world order and accessible, open trade. It’s not helpful to be alarmist about the future, but it seems clear that we can no longer depend on an ever-closer global order ruled by the West. We don’t yet know what will come next, but there seem few signs we’re going to return to business as usual any time soon. We need to think through and invest in new ways of doing things that rely less on inflexible process-driven systems with centralised control, and more on hedging our bets on the future. It’s important to have good, timely intelligence, and structures that empower individuals to make quick decisions. Supply chains can still be global, but they need to be nimble. Moreover, they should rely on good relationships with partners in an array of different locations. In uncertain times, a flexible system is existential.

We’re doing work right now to help a client think through its issue management approach in light of diverging interests; the result will be a system that uses data to chart changes in different markets, and builds in a regular coming together of teams that charts a path through the needs of each market while staying centred on core company principles. The result will be an approach that is more responsive to the needs in each market, without creating risk elsewhere.

Normalise diverse perspectives. DEI may have become unfashionable in some markets, but it served a practical purpose for smartly managed companies. It gave voice to the perspectives of individuals from different cultures, backgrounds, traditions, and experiences. These (often unwitting) representatives of different demographics brought a richness to our understanding of customers, stakeholders, and markets that had until that point been much more difficult to attain. If harnessed correctly, these perspectives can be a great asset an organisation, providing checks and balances in the system.

You don’t have to call it DEI; in many places that has become a "thing," and that thing is damaged. This is about understanding what is useful from this and other corporate "movements" and applying them in a way that makes business sense. Also, remember that too much consultation and consideration is itself a barrier to agility; wisdom is required to find a balance between the business benefit of diverse perspectives and the need to move quickly.

We would love to work with you to transform the good work of your diversity team into a strategic advantage.

Keep a long view. In the first tech boom back in the 90s, the futurist was king. These self-styled oracles specialised in predicting the next big thing, or the future of management, or the trends that were sure to transform the way we live our lives. Fast Company magazine was founded, in part, on bringing their ideas to the world. Predictably, a lot of it was nonsense. But the basic idea – look across the wave-tops and avoid getting sucked into short-term churn – is important.

Organisations responding to current events right now can feel caught between the urge to offer a “hot take” on an emerging issue and look like a leader in the discussion and the desire to remain silent to avoid drawing unwanted attention. Honestly, neither of these approaches gives the best outcome; every organization needs to find its own balance between being involved/ relevant, and offering perspective. It takes a new way of thinking and a lot of practice to respond in a timely, relevant way while still offering a unique perspective, but when you achieve it, it’s gold dust. In an age where “management by statement” is all but completely ineffective, everyone needs to find new ways to communicate with agility.

Across the world, organisations are experiencing great change to the way they do business. It is anything but unprecedented, but that doesn’t make it less of a challenge. Some important adjustments to the way we think about the world and our role in it can make all the difference.