LEADING AND DECIDING IN A CHAOTIC WORLD

David Cabero, General Manager Europe at BIC Group and expert in decision making

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The main principles of leadership are independent of the context. However, it is true that an effective leader is one who knows how to adapt to the environment in which he or she operates. If we used to speak of a VUCA world, today the accumulation of events leads us to speak of a chaotic world where serious events accumulate one after another and new conflicts arrive before the previous ones have been resolved; what is happening in the Middle East is the latest example. In this new reality, both executives and board members must adapt, as well as their entire organization in unison.

Are there keys to success in this chaotic world? Of course, there are. The first is our mindset, the way we look at the world and what is happening in it. Our ability to adapt, to be open and flexible in adjusting plans as much as necessary, not only a posteriori, but also a priori. For this we need new organizational capabilities that help to create scenarios, analyzing causal relationships between actions we might take and possible outcomes. Since the outbreak of the pandemic, contingency plans are here to stay. Understanding the benefits that each scenario can bring to the company is a new responsibility of its management and will be the basis for effective decision making. It is therefore necessary to have teams that learn to identify cause-and-effect relationships or, in other words, the marginal result of each decision when all other variables remain unchanged (ceteris paribus). Reliability will be a rising value in specialist teams, as will the intuition of the executives and board members to understand these analyses and to be able to decide when everything around them is constantly changing. They will have also to handle the pressure for immediacy, which in such cases, becomes a bad advisor.

Risk management is today a key tool for the different decision-making levels of companies, and executives must accept that the best way to be agile and adaptable is for all hierarchical levels to have the possibility of assuming calculated risks, albeit within a defined framework. To this end, having a good data system that allows us to read the present and the past, accurate and relevant data, becomes a necessity. But sometimes two company departments handle different data on the same reality, so having a "single source of truth" will be vital for analyzing scenarios and building solutions.

It is important to decide what levels of autonomy can be given to teams because the words "adaptability" and "agility" are often abused, synonymous with "very short decision approval processes", and then reality shows the opposite with long processes and a "boss" who wants to be involved in everything. Therefore, we must promote participative leaderships and decision-making processes in which the collaboration of diverse teams is prioritized, both in their knowledge, nationality, gender and age; we often forget about the latte. There are very few young people in the discussion of important decisions. This seems contradictory with the fact that the world has never changed so much between generation and generation. In fact, the age gap now occurs every decade. And it is also advisable to consult external experts to integrate political, economic, social, and legal factors into risk management, and thus create a risk map.

A second key to success in this chaotic world is self-management and self-leadership. Generate mental and emotional resilience to know how to better manage uncertainty. Someone who cannot lead himself in circumstances of high tension and volatility will not be able to lead a team either.? It is important to be willing to learn continuously, to keep abreast of new trends in each industry and best practices. It is also important to give a central role to authentic and transparent communication, informing all stakeholders to generate greater trust. When we do that, we should not to forget that the use of humor in difficult times helps to change perspective, generates calm and lowers tension. And of course, it is vital to promote ethical leadership that aligns decisions with moral principles.

And the third key and a first order necessity is to have an alignment of priorities.? When everything moves at the same time, what do we change first? To implement a strategy, it is important to establish an order on when to start, what to change and at what pace, because one of the most common problems of change management is that teams are not able to keep up with the pace of change. Let's not forget that explaining in a clear and transparent way the purpose of the strategy and what it will bring to the company and to the employees is basic for everyone to feel the decisions as theirs; it is the so-called ownership process.

And finally, we must not forget that, in times of extreme risk such as the current situation in many parts of the world, we must protect the main competitive advantages of our company to maintain its continuity: the team, the brand and its assets. And in this, people make the difference, they are the ones who generate competitive advantages, build brands, assets and processes that lead the company to win in the long term.

Making good decisions in complex situations has become the most complicated challenge for all managers and board members. I am convinced that the leaders of the new generations, accustomed to living with uncertainty, will know how to find the necessary balance between the interests of the company, its customers, its employees, and the ethical considerations that will make our planet flourish.