“Uncertainty in the economy, society, politics, has become so great as to render futile, if not counterproductive, the kind of planning most companies still practice: forecasting based on probabilities.” -Peter Drucker, 1995.
It has been 25 years and that message is more pertinent now than ever. Companies and other organizations that tolerate ambiguity are moving ahead faster than those bogged down in process rather than thinking. Adaptable leaders emerge with focus on practical thinking to what can be controlled versus what needs to be endured. There are three phases in this process of adaptation: prediction, understanding and control.
The ability to predict next actions is based on understanding your operational status, determining the direct impact of events, and segmenting those events into categories of controllable and not controllable. Effective leadership will communicate to their teams which events are which. Teams can then focus on actions aimed at controlling possible events and develop “work arounds” for those uncontrollable happenings.
You may have noticed that many of your staff are grieving about other employees laid off, a reduction in their own income and unquantified uncertainty in their lives. The most successful leaders slow down and seek outside advice in this situation to assure their teams that survival is highly likely. Personal accountability and allowing the culture to become more flexible will lead to faster alignment of thinking within teams.
The process of recovery is a “dial” rather than a “switch.” Here are some suggestions for the journey:
- List the issues you face in order of impact on revenue, costs, cash flow and staffing.
- Then segment them into what can be controlled and what cannot. Examples are: reaching out to customers and suppliers to assure them that you are operating (controllable). Local government restrictions on people movement and capacity restriction (not controllable).
- Determine changes in process or policy to address controllable issues with the thought of slowly tweaking your operations as if on a dial. Think of work arounds for non-controllable events where you can lessen the impact. Examples include how quickly you bring employees back as your revenue returns versus how to work around a 10 PM curfew.
- Look forward to devise multiple scenarios of operations that will help you prepare for the “next-normal.” This helps in identifying tipping points where you must adapt again and give some insight into what next steps may be.
- Focus on doing the right things well!
Those who can tolerate ambiguity and can adapt in their thinking and actions will flourish. Align your team to be compassionate yet forceful in developing new ideas. Increase personal accountability to align your team to hold themselves accountable for the execution of the five steps above.
We are helping many companies and non-profit organizations with getting through this environment. We have successfully navigated multiple crisis over the last 25 years; offering experienced insights and analysis.
C Squared Solutions Partners are experts in planning and financial modeling.
Call us today to schedule a free 4-hour consulting appointment.