As I meet business leaders all the time, I am constantly bombarded by the problems that are presently effecting every business. In essence every business is grappling with the need to make changes and drive transformation to best handle the turbulence coming from inflation, supply-chain issues and the tight labour market leading to spiraling wage costs. These factors all make for uncertain times.
Many times business leaders find themselves focusing more on managing and trying to mitigate “downside risks” than work on “upside opportunities”, pushing business leaders to feel less confident and more skeptical about where the economy is heading.
Leaders are right to recognise the need to manage through all the turbulence. Today’s pace and complexities will not wane; in fact, I predict they will only intensify. The best leader of the (near) future must focus on how to change ahead of pace and how to bring their people along with them. However, that is much easier said than done as change is difficult.
What are most of the changes I am seeing right now?
The types of changes I see most right now are related to the integration and breaking down of silos; changing operating models to reduce inefficiencies and automation to gain efficiencies and rely less on employing people.
Having said so, I still see business leaders who are trying to plod along all this turbulence with the “old” mindset, thinking that rather than focusing on mitigating the “downside risks” they can focus on working on “upside opportunities”. Here are my pointers on why I believe this is a wrong mindset.
1. Prioritise, Prioritise, Prioritise
The general business landscape is already challenging as it is. To mitigate the downside risks one needs to be agile to pivot quickly in a new direction when needed. The least business leaders need is to pile their agendas with too many priorities. Doing so will likely make you lose focus and run the risk of doing a lot of things poorly or “just okay.” This will likely means pulling back on new initiatives or new investments or new business ventures. The right mindset of the company, at this point in time, is to focus on the right things. Business leaders have to prioritise what matters most to their stakeholders and do it well.
2. Keep things simple
During disruptive times, it’s often good to take a step back and ask whether all that your business is involved in makes sense or whether some parts of your business are better owned by someone else. A more streamlined business areas in which your business is involved in will likely mean that your company will have an increased ability to stay agile and increases the likelihood of successful transformation when dealing with your dealing with downside risks.
3. Getting their head out of the sand
Many times business leaders feel lonely and frustrated as the persons they work with do not see the urgency in having the business deal with the mentioned downside risks. Business leaders need to communicate, communicate, communicate and a willingness to objectively,substantively, and persistently ask basic, but important, questions. For instance, business leaders must ask themselves, “Is the management team truly aligned around the change effort to deal with the present downside risks?” Today’s pace underscores the importance of continuously aligning mindsets.
Change is difficult — managing through it is very challenging. Yet, in the present business environment, business leaders have no choice but to be even more aggressive with change efforts in their companies, to simply stay afloat and mitigate the downside risks.