Uncertainty is found everywhere in life—the weather, the economy, the actions of others, etc. That uncertainty can rise and fall, just like the weather. Currently, business owners and employees are facing a series of uncertain alerts.
If you are a leader of a company, or a team, and need some guidance to leading during this time, we’ve got some approaches to help your company adapt.
“Sailors navigating tricky winds, shifting tides, and mercurial weather systems prepare their vessels so they can sail on safely and purposefully, and companies can do the same. Rather than simply reacting instinctively and responding to the informational noise detected by their instruments, leaders can move swiftly and proactively to alter their course and chart a new one — and capitalize on dislocations in the market.” – Will Jackson-Moore, Heather Swanston, and Mohamed Kande
Dynamic Strategy
During uncertain times, the greatest challenge of managing is that the potential outcomes are much more numerous than is typically expected—for the economy at large, and for the behavior of competitors and consumers. In order to be more resilient, leaders will need to be as clear about what they will not do as they are about the initiatives they will pursue.
Sundar Subramanian and Anand Rao have written, strategic decision making has to become more dynamic and probabilistic. In order to build competitive advantage, company leaders will need to define strategy, then test and tweak it to adjust to internal and external changes.
Investing in the Workforce
During uncertain times, companies will reduce head count, put hiring freezes in place, and leave positions open. Yet, simply freezing activity means companies can miss out on filling critical needs and areas. Instead, companies should recognize the potential of longtime employees. By investing in efforts to make the existing workforce more agile and resilient to changes in the environment can boost an organization’s capacity to thrive in uncertain times.
Create Values with Deals
Uncertainty tends to paralyze deal making or to push companies into transactions that are defensive and reactive. But companies that are sufficiently agile to execute transactions when they can, rather than when they have to, will find that deals present occasions to boost growth and pull ahead of rivals. Because more motivated sellers appear in uncertain times, companies can potentially take advantage of deal flow from organizations that are divesting assets. It is no surprise that private equity firms tend to do their best deals and create the most value by buying at the trough of a cycle, when both multiples and profits are depressed.