When confronted with volatility, many leaders believe that agility is the key to business resilience. In this article, Ryan Baum explains how making your business resilient for the long term will not only require flexible teams, but also a future-focused approach to planning and change management.
We’re all thinking it. What’s tomorrow going to bring? Company leaders have been confronted with more changes in the past three years than what usually transpires over 30. How do you make sure your business and your leadership team are ready for that?
With ever-more volatility in the world, leaders recognize that a company’s resilience is the trait that will determine whether it survives in the long term.
Unfortunately, some of the leaders I’m speaking to now are citing “agility” as a panacea. “If we can only make the company more agile, we will be better at responding to all of these changes when they happen,” they typically say.
Agility is a great trait for project management and short-term resilience. It helps teams move and pivot more rapidly. But building a resilient business is something far different. After all, it would be very difficult if a company needed to “pivot” and build an AI-based large language model from scratch. That would require not only flexible teams, but also a future-focused way of planning.
Leaders who are best at building resilient organizations for the long term have developed two unique skills that help them thrive in ambiguous and rapidly changing situations. They plan for multiple futures simultaneously, and they are great at building a case for change that blends both emotional and economic arguments.
It’s not about predicting the future
It’s impossible to know what’s going to happen next. Sometimes it’s not even clear what’s happening now: Are we in a recession or not? Is AI going to disrupt my business or is it over-hyped?
Leaders who build resilient businesses are those who have a game plan for a number of potential futures.
How do you do that? Scenario planning. The idea was popularized when Royal Dutch Shell used it to great effect and was prepared for the nearly unheard-of possibility that oil-producing nations might start banding together to set the price of crude. And it has been used many times since. Like in the 1980s, when Cisco’s John Chambers built a platform to spot trends and jump ahead of them before competitors did. Or, more recently, when Apple diversified its manufacturing operations in anticipation of supply-chain issues in China.
Trying to anticipate social changes and envisioning the different ways people and governments might respond, then war-gaming those scenarios, can help companies identify strategies to adapt. You can figure out the shifts and early investments you need to make right now to thrive in any future.
As a result, you’ll begin to understand which investments are worthy regardless of which future comes to pass. By playing out different futures, you’ll be attuned to the early signs of which ones are emerging. And you’ll have some hypotheses about what to do and what your competitors might do.
Combining emotions and economics
A Harvard Business Review survey of hundreds of C-suite executives and members of the workforce across industries found that a determining factor for a successful transformation is whether leaders approached it in a way designed to drive emotional commitment from employees. This is something that can be done, on a smaller level, on an ongoing basis.
Despite the volatility of change, every company says that it’s focused on innovation. But most people are actually focused on the present. Even if there is a strong economic argument for the future, attention gets diverted to fires that need to be put out now, or to parts of the business that aren’t performing as well as they were. Amid the noise, it’s sometimes hard to make an economic case for change. Or even when you do, it still doesn’t seem to change what people do.
That’s because you’re fighting against instinct. Thinking about change can actually make people feel sick. People tend to be risk-averse. They want to avoid downsides. Fear of pain in the present is more powerful than the fear of future pain.
That’s where the emotional piece comes in. There are ways to rewire our brains. The key is making the future feel like the present, and layering it with emotion that adds to all the facts and stats.
Entering an immersive world
One leadership team I was working with at a large financial institution was having trouble making major shifts that their chief strategy officer was recommending. There were ample facts, stats and reports that suggested something might need to change, but building consensus and deciding concretely what to do was an uphill battle.
When the team did an immersive version of scenario planning with the leadership team, they entered worlds that felt emotionally real. You could read newspaper headlines, think about the music people were listening to, and experience the emotions of life in a visceral and realistic way.
All of a sudden, the future felt like the present. It felt personal. And people started making decisions.
For any company, getting the leadership team together and visualizing daily life in a future world can help unstick a team and help them start taking action.
Live in the possibilities
War-gaming can convince people that change can be good. If they’re part of a rich environment and can see how a potential future world operates, it’s easier for them to believe in that future and see the reasons for the strategic decisions that need to be made to live in it. It can be a tipping point from fear of change to excitement about how to anticipate the change.
To build a more resilient business, leaders and their teams need to take on a future-focused mindset. It’s not about predicting the future. It’s not about agile teams. It’s about prompting people to envision multiple scenarios on a regular basis and balance an emotional case with an economic one.
That way, teams will be able to identify the shifts and investments that allow them to thrive in any future, and most importantly to get started now.
