How fresh is your thinking?

Welcome to the Strategic Leader newsletter! In each edition, I give you a perspective, resource (e.g. a tool, framework), and a recommendation (for a book, article, talk, service, or person).

If we haven’t met yet, thank you for joining me! You can learn a little more about me?here?and by watching this short?video.

Perspective

One-third of the world economy is likely to contract this year or next amid shrinking real incomes and rising prices, according to the?IMF.?

Some businesses will suffer as they struggle to adapt. Some people will too, as they struggle to pay the bills.

"Cheer me up, why don't you, David", I hear you cry.

Let me try.

As uncomfortable as it might sound, downturns also represent a strategic opportunity for companies to move into spaces left by others who are struggling or failing.

Many now-successful companies – Disney to General Motors and from Airbnb to Uber– began life during a recession.

What does it take to innovate and prosper, not just get by, in a downturn?

This is what I’ve learnt over the last twenty-five years:

• Look outwards, especially towards your customers:?it might feel comforting to look inwards and focus on what you know best and what you can control, or at least you think you can control (like some direct costs).?It’s folly. While you’re doing that your customers may be looking elsewhere, and competitors are stepping on to your patch. Instead, figure out what your customers truly want – ask them, observe their behaviour?– and where you’re falling short. Experiment with?offering more affordable solutions. Reach out to partners and suppliers in your ecosystem(s) to do the same.
• Create space: avoid launching lots of new initiatives without looking hard at what you have in place already.?It’s tempting, I know.?Instead, cull at least 50% of them, based on their lack of impact, alignment to strategy, and momentum. The same goes for internal meetings. Mobilise an anti-bureaucracy squad to identify unnecessary process, then get rid of it.?
• Reduce costs strategically: avoid the typical ‘slash 10% costs across the board’ approach.?It’s lazy. Instead, identify non-core (to the strategy) areas and disproportionately reduce costs, for example by exiting ventures, selling off assets, and reducing major discretionary spend.
• Look hard at your leadership team: avoid lots of work on game-changing strategies.?It’s risky. Unless you’ve figured out that the leadership team, at least, has the confidence and capability to develop and deliver them. But if they are, ask yourselves “what are the smartest, boldest strategic moves can we make?" if we were to look afresh.
• Sharpen up decision-making: delaying decisions is commonplace in downturns, unless you’re facing a crisis. “Let’s wait until we know more” or “it’ll turn around, won’t it” are phrases I’ve heard many times.?It’s uncourageous. Tough times call for smart decisions. Establish a new protocol and pace for decision-making – e.g. identify options, agree criteria, assess options (inc. do-nothing) and make a recommendation, with the right people involved.
• Identify your best: many leader focus on what’s wrong (i.e. “our customer experience isn’t seamless”, “our brands look a bit tired”).?It’s easy. It’s harder, especially in more critical, mercenary organisational cultures, to identify the best aspects of your business. When and how do you delight customers? Where are you world class in your capabilities? These are the foundations for innovation.
• Make it safe: difficult markets call for more effort, more intensity.?It's misguided, old-school thinking. Avoid piling on the pressure. Downturns induce anxiety. Demonstrate compassion, wherever possible, by calling out what you’re observing and sensing in your team. Make it clear what you need to respond to and change in the business, and how you’d like people to contribute their ideas, observations, and challenges. Innovation should be?a team game open to anyone in the organisation; the opportunity is to make it easy for people to play.
• Rethink creativity: launch lots of brainstorming and hackathon sessions, right??It’s often wasteful?if they’re more about “theatre” the substance. Go light on process and deep into the “problem” you need to solve (e.g. high customer churn, poor cross-selling) and frame the question precisely. Get the right people from outside (e.g. customers, partners, suppliers, experts) and inside (e.g. those on the front-line, operations, marketing) involved. Bring people together to debate and experiment for proper conversations. But also give them time to try and think themselves. Research precedents and analogies, and develop scenarios. The session is a catalyst to invite people to explore and expand, not an end it its own right.

Laura Vanderkam, author of?Tranquillity by Tuesday, said to me that “open space invites opportunities”. You can only create that open space by tackling organisational inertia and drag, and your own wasteful habits. In her book, she sets out nine rules or principles that you can literally start using today; I have and it's already making a difference in my life (with some way to go). You can listen to, and watch, our conversation?here.

Over to you:

How are your preparing your organisation, team, or yourself for difficult markets? What proactive steps will you take??

Resource(s)

If you’re think there’s potential to create more space in your day for what matters. try some of Laura’s helpful?resources, including a ‘Time Makeover Guide’ and a ‘Time Tracking Sheet’.

Ideo, the global design company, has collated a portfolio of super helpful?tools?to aid your creative work, some paid, some free.

Future Today Institute, led by Amy Webb, has a number of foresight tools that can help you to work out where to play in times of uncertainty. I particularly like the?Axes of Uncertainty tool?which is good if you’re looking to develop scenarios.

Recommendation

Nick Himowicz, creative at Strategyzer, has produced a stimulating, entertaining, and insightful portfolio of youtube?videos?on growth and creativity. He explains how to use various canvases – like the Strategzer business model canvas (of course!) – and how to run workshops successfully. I love his style and openness to share his own journey.

Wishing you well, and thanks for subscribing,

David.

Thank you for reading this edition of the Strategic Leader newsletter. I hope you found it insightful and useful. Here are some ways to access further perspectives, tips, and resources:

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