In the 1960s Muhammad Ali changed the face of heavyweight boxing with a fresh combination of agility, resilience and the ability to strike decisively when it mattered. They were great characteristics back then and they offer a view of what it takes for businesses to win today.
When uncertainty is all around, businesses need the resilience to take shocks and knocks without ending up flat on their backs. They need the agility to sense and respond to a rapidly changing business environment. And they need the courage and confidence to take decisive action to seize the opportunities that are out there.
So, how can you design your organisation to “float like a butterfly and sting like a bee”?
Resilient organisations design their businesses to perform well in today’s and tomorrow’s world. They have clear workflow and processes; roles are well defined, people have the skills to do their jobs and understand how they add value to the business. Unlike others, resilient organisations don’t rely on people’s knowledge to fill gaps in process. As a result, when major change happens, organisations with resilience built in have a greater capacity to absorb shocks and continue with business as usual. They can also divert resources more quickly to handle disruption.
Resilient organisations are increasingly using scenario planning to think through and plan for the impact of possible or likely events – an approach more usually deployed by major infrastructure operations. For instance, travel and tourism multinational TUI took steps to plan how it would operate and transact with customers and suppliers in the event of Greece leaving the Euro.
Beyond this, robust organisations build in resilience at a human level. They guard against becoming over-reliant on a few key individuals and focus on developing the resilience of leaders, managers and staff – increasing their personal ability to stay focused in the face of set-backs and challenging changes in circumstances. Personal resilience is further supported by the firm giving both a clear vision for the business and a realistic acknowledgement that, in times of uncertainty, short-term changes can be consistent with the long-term vision.
“George can’t hit what his hands can’t see.” In the second line of his poem, Ali expressed his belief that his opponent, George Foreman, was a lumbering leviathan who wasn't agile enough to win.
By contrast, agile organisations are good at spotting what’s happening in the world and responding quickly. They have a strong external perspective, undistorted by the outlook of particular functions. Ricoh is a good example. The company’s transformation from world’s largest copier manufacturer to document and workflow solutions business came with the realisation that it could no longer rely on technologists to understand the way the world was changing. Ricoh made it the responsibility of every employee to use each contact with customers to sense and respond to the changing world.
Agile businesses also realise that timely decision-making is critical and that decision-making arrangements need to flex with conditions. For example, when Delta Air Lines faced a social media storm, which developed in hours in response to its decision to charge returning US service personnel for extra baggage, its decision-making framework need to shift to a new level to respond at high speed.
Finally, agile companies are prepared to change processes and policies to take advantage of the changing world. This goes hand in hand with the process excellence needed to drive resilience. With a very clear view of how things work today, agile companies are confident of being able to vary the way they do things without dropping the ball.
Uncertainty isn’t always a bad thing. As customers’ priorities change and competitors struggle, opportunities emerge. Winning organisations have the right mindset to spot these opportunities and the enablers needed to realise them.
The right mind-set is often created by the messages coming from the top of the organisation. For example, London mayor Boris Johnson has called for an end to austerity rhetoric in relation to the UK economy. He recognises that politicians set the tone for the economy, just as business leaders set the tone for their organisations. Taking decisive action starts with thinking positively and sending out the right signals.
A positive outlook is vital, but practical decisions need strong enablers too. These include the ability to divert resources from running the business to assessing and responding to opportunities, and the flexibility to change even fundamentals, such as the customer proposition, if it will create an advantage. To win, businesses also need freshness of thinking to uncover new ways of working with partners and new ways to access finance that allows for aggressive action. Finally, they need the courage to stop lower priority activity to create space for this.
Ongoing macro-economic turbulence and rapid market changes mean uncertainty is the new norm. Shocks great and small will continue, whether from fresh turmoil in the Eurozone, the impact of Iranian’s nuclear programme on oil prices or even another Icelandic volcano. The question facing business is how to be a world champion at managing uncertainty.