How volatile is today’s business world? McKinsey & Company analysts Homayoun Hatami and Liz Hilton Segel write, “If an executive had fallen asleep in 2019 and just woke up, [they] wouldn’t recognize [today’s] business world. … The COVID-19 pandemic rewrote the rules, and now a new and potent disruption seems to arrive every other day.”[1] Some of their McKinsey colleagues, Michael Birshan, Ishaan Seth, and Bob Sternfels, add, “We’re living in a world where new shocks — the war in Ukraine, the return of inflation — have been layered onto earlier shocks — a deadly global pandemic, supply chain disruptions — that in turn were layered onto, and dramatically accelerated, long-standing trends such as digitization and sustainability.”[2] Business leaders know that running a business in normal times can be challenging. Running a business during volatile times can seem overwhelming. Experts suggest that navigating volatile times successfully requires a change in leadership style and business strategy.
Leading During Volatile Times
One leader who successfully navigated a tragedy was Lt. General Russel L. Honoré, U.S. Army (retired). Sometimes called “The Ragin’ Cajun,” journalist Laura Putre reports, “[General Honoré] earned a couple of memorable nicknames for his standout leadership during Hurricane Katrina, when he stepped in and turned a bungled disaster response into a successful rescue mission: ‘The Category 5 General’ and ‘one John Wayne dude.’ When he found the military and police with their guns raised, herding civilians, Honoré stepped in and ordered them to put down their weapons and start carrying babies to safety; he brought a well-thought-out plan executed with humanity and compassion.”[3] Below are suggestions from Honoré and executive leadership coach Marcel Schwantes about what leaders should do during volatile times.
Suggestion 1. Do Routine Things Well. Even during challenging times, routine activities need to be completed. Honoré suggests leaders look back in history to what great leaders have done during troubling times. He uses George Washington, who heroically carried out routine activities during the Revolutionary War very near where I live, as an example. A couple of years ago, Honoré told participants at a Manufacturing & Technology Show in Cleveland, “You think how hard we have it today. Think about this: Lacking boats and with 50% of his Army missing from the battlefield, General George Washington inspired a band of farmers and bricklayers to enlist their own boats and fight in the Battle of Trenton. Washington taught that makeshift band of soldiers to set up camp at the river and put the horses upstream for the night. And he got his employees to buy into the mission: Many of these soldiers could not read. So he inspired his people with the words of the great Thomas Paine: we win this, we will win freedom.”[4]
Suggestion 2. Acknowledge People’s Fears. When times are tough for businesses, they are also tough on employees. Schwantes writes, “Many believe showing fear is a sign of weakness, so they spend immense energy trying to hide it. But fear is like steam. Contained for too long, it will blow a lid off. It makes sense, then, that companies that don’t regularly discuss fears experience toxic and unhealthy behaviors. … Healthy conversations about fear often begin with the leader showing vulnerability and courage that create an opening for others to share their fears. A conversation might start with the leader saying, ‘The thing that keeps me up at night is ______________.’ The leader can ask employees, ‘What are you afraid of?'”[5]
Suggestion 3. Be Open-minded and Inclusive. Schwantes notes, “Effective leaders put aside their expertise to get the best out of colleagues. They heighten the collective genius of those in their organizations. And in doing so, their teams overcome obstacles that, at first glance, seemed insurmountable.” Honoré suggests that great leaders embrace the impossible. He told conference participants, “We are ripe for more innovation. Embrace technology. You want your preferred customers to get directly to you; there are programs that do that. The roofs in your facilities catch water — they could be catching energy. You want to create an innovation program, you create what I call the ‘Damn impossible list.’ … If you’re not changing, you’re falling behind.”
Suggestion 4. Be Decisive but not Cocky. Honoré related another story about Washington and how decisiveness can be important. He recalled, “At the end of the [Revolutionary] War, a lot of Northern states wrote, saying ‘George, we ain’t paying taxes. And he didn’t hesitate as a leader. He talked to his aide and he said ‘Saddle up Nelson [his white horse]. Give us 2,500 troops and we moving north.’ The next morning he started to move and two and a half days right out of Washington — the spy network was working and it got back to the North. The North said, ‘George don’t come up here. We’ll pay the damn taxes.’ You have to know when to saddle up Nelson.” Did you note that Washington “talked to his aide”? Getting others in your organization involved in decision-making is essential. Schwantes observes, “Ineffective leaders flex their expertise in the moment. They feel good about their decisions, while their colleagues feel isolated, unheard, and undervalued. And as a result, their organizations whither away in response to challenges.”
Suggestion 5. Know Where You’re Going. As the Cheshire Cat told Alice, “If you don’t know where you are going, any road will get you there.” Schwantes notes, “Effective leaders map their decisions.” He explains, “Effective leaders use a decision-making process that best fits each decision’s domain. For example, when challenges are clear and predictable, they leverage best practice and common sense. When problems are complicated and expert advice is required, they seek the advice of specialists. And when situations are complex with emotions running high, they unite colleagues to create shared reality before deciding on how to proceed.” And where should you start the journey through troubled waters? Hatami and Segel suggest, “Start with — what else? — resilience. No doubt, it’s a corporate buzzword, but if you strip away all the extraneous baggage that the concept has collected, resilience is emerging as a vital ‘muscle’ for companies operating in a world of endless volatility and disruption.”
Concluding Thoughts
To help leaders make better decisions during volatile times, Enterra Solutions® developed the Enterra Global Insights and Decision Superiority System™ (EGIDS™). EGIDS can help business leaders explore countless scenarios at computer speed so they can be confident they are selecting an optimal way forward. Birshan and his McKinsey colleagues note, “It may not be possible to be right every time, but seeing accurately through the fog 10 percent more often than your rivals is a substantial competitive advantage. That requires investing the resources, time, and effort to go beyond conventional analysis of conventional data that generate conventional wisdom. An insights edge comes from granularity, depth, and diversity.” It takes a courage to march into “the fog” of a volatile future; however, with the right leadership techniques and advanced technologies, leaders can greatly increase confidence in their leadership and decisions.
Footnotes
[1] Homayoun Hatami and Liz Hilton Segel, “What matters most? Six priorities for CEOs in turbulent times,” McKinsey & Company, 17 November 2022.
[2] Michael Birshan, Ishaan Seth, and Bob Sternfels, “Strategic courage in an age of volatility,” McKinsey & Company, 29 August 2022.
[3] Laura Putre, “‘Do the Routine Things Well. Be Decisive. Embrace the Impossible.’” IndustryWeek, 10 November 2021
[4] Ibid.
[5] Marcel Schwantes, “5 Rare Strategies to Successfully Lead a Company During Tough Times,” Inc., 7 July 2022.
