Leading in Uncertain Times

There’s no doubt about it, our world can throw us curve-balls from time to time and, living in the UK, we received one a couple of weeks ago as the UK voted to leave the European Union. Whatever your political persuasion, I think we can all agree that the implications of that vote will include a period of economic and business uncertainty as the many detailed points of extricating the UK from the linkages it has with the EU are negotiated and implemented. Vast tomes have already been written on this topic, but precious little has been said about managing a business through such a period of change and unknowns, so let me at least make a start to redress that balance.

At the end of the day, all businesses are staffed with human beings and when shocks happen, people look for guidance, usually from their leaders. Silence from the leadership allows rumours to propagate thick and fast, so it’s important to get on the front foot and set a few things straight. On the morning post-EU referendum for example, I put out a note to my colleagues worldwide acknowledging the result and the consequent turbulence in the world’s stock and currency markets. However, what was most important was a simple reiteration of our company’s focus, our priorities and what we all need to do to be successful in these markets. I have seen similar messages that other leaders sent out to their organisations at a time of sudden change and they all have this similar theme. Acknowledge the facts of the issue, remind the team of what they are there to deliver and a simple, straightforward call to arms around the practical steps that can and should be taken. Keep it simple and keep it authentic and people will tend to respond accordingly, even if the situation or circumstances may not be the most helpful.

Successful businesses are built to adapt to change, so it should be in our DNA from the start. However, when the change is potentially significant and sudden, bigger threats and bigger opportunities emerge. I think it is at times like this that businesses can make a big leap forward if they plan properly, taking advantage of a situation to create or deliver areas of their business that previously seemed impossible to achieve. When the clouds of economic uncertainty gather, it’s a natural reaction in a business to batten down the hatches, restrict investment and basically stall any decision-making until the clouds pass and the future looks more positive. In many cases, that is exactly the right approach, particularly where a business’s financial situation is stretched and survival becomes the highest priority.

During the global crisis that erupted in 2008, many organisations found themselves in this state. However, if a business does not find itself in such peril, it’s surprising how many opportunities for investment become evident if you keep your eyes open and are willing to break with the herd instinct. I have seen several examples of this in my own career, where a crisis created once-in-a-generation opportunities for those able and willing to take them.

Back in 1998, I was working in Blue Circle, then one of the world’s leading construction materials businesses. A key plank of our strategy revolved around building a significant business in the fast-emerging economies across Asia, where demand for our products was burgeoning. The problem however was one of economics. Building greenfield sites was expensive and fraught with difficulties. Acquisitions were only available at sky-high prices. The events of 1998 changed all that almost overnight as the local currencies crashed, taking the local economies with them. From boom to bust in a matter of weeks and one of the world’s hottest construction regions now as quiet as the grave. Time to throw away the strategy and beat a hasty retreat? Just the opposite actually. Overnight, assets became available at prices previously unimaginable for those with the finances and willpower to take advantage. The easy decision would have been to let the storm pass and seek to build a business once the economic prospects looked better. The hard decision was to buck the trend and invest in the downturn. Had the long-term need for infrastructure across Asia diminished? No. Would cheaper options to build a market-leading business in that region emerge if we waited? Unlikely, as the region was already in recession and prices were at historic lows. So we invested heavily and over the next 2-3 years built one of the largest and most profitable businesses in the sector; something that previously was just a vision that would have taken decades to deliver, if ever.

More recently, the economic crisis of 2008 presented other, different, opportunities. By then, I was in my current role at Hays. As the world’s economies slumped and business confidence evaporated post-Lehman’s collapse, we were very much in protection and defence mode. However, prior to the economic downturn we were also well advanced with a significant investment plan to upgrade our entire global technology estate. Pulling that investment would have been easy and non-controversial. “Better to wait and do it when things were improving” was the traditional view when times were getting tough. The problem with that approach however is that you end up changing all your core IT systems just when everyone is getting busy again as the markets pick up. The last thing you need at that point is risk and distraction. So we actually accelerated the investment, aiming to complete it while the world was in turmoil. We wanted to emerge into the eventual upturn with the hard work done and a technology base that would serve us well for years to come. It turned out to be our biggest ever investment in the business and has delivered a fantastic return, yet it would have been so easy to cancel it at the time because the world was just so scary.

The final point I would look at is your whole ‘People’ agenda. When a business sets its strategy, there is always the implicit risk that events will come along and knock it off course. The leader then has to take a decision: has the end-game and approach now fundamentally changed, or is this just one of those episodes to be dealt with along the way but the long-term objective remains valid. Each company has a North Star, something that it is following and that remains true and in place under almost all circumstances. Of course, sometimes things can make you change that North Star, but in my experience those events are far rarer than you might assume. Yet I have often seen a business change its North Star on a very regular basis. There’s a strong case for being adaptable, but there’s no case for inconsistency. So ask yourself what your own North Star is; it should be something that remains in place through almost all circumstances and while the company may be blown off course by events, it still acts as the guiding direction you should be headed. This analysis helps me cut through a lot of the noise and diverging opinions and enables me to boil down a situation, simplify it and then communicate the actions we need to take. You then need to ensure the team are onboard, clear on the priorities and that they are equipped to deal with them. You may well be asking your people to do different things and use skills that they haven’t had to deploy for a while. Understandably they may be a little rusty at this, or not have the skills at all for the world you find yourself in. There’s a very strong case in these circumstances to invest in your whole training regime. Not only will this help ensure your team is properly armed to deal with the issues, but it is a strong indicator of the value you place in them when you go out and spend more effort on them when your competition is retrenching and cutting costs. A lot of research points to strong employee engagement levels as a key predictor of a company’s success. What better way of driving engagement than investing in your people?

I do not claim that these ideas will solve all problems. However, they, and other ideas, have worked for me in many cases. Crises and uncertainty causes people to complicate things. A leader’s job is to simplify them and set the action plan. Crises cause many people to hunker down and do nothing. Leaders will see opportunity in the inertia of others and take steps forward, steps that were previously maybe impossible. Above all, be confident in where you are headed. As the saying goes, “This too shall pass” and that phrase applies in good times as well as bad!