How Does Your Organization Cope with Uncertainty?
On Wall Street, the Dow-Jones average loses 1,000 points before making a rebound. Large companies are ramping up their cyber-security teams after several notable data hacks. In China, an economic slowdown has turned a market opportunity for many U.S. companies into a potential challenge. Across the world, droughts, floods and tropical storms—not to mention sociopolitical strife—have affected business operations recently.
Clearly, we live in a time of great uncertainty, without a crystal ball to predict the future. As a result, small, mid-size and large organizations must find a way to chart a course based on assessments of risks and possibilities.
Like individuals, companies have different tolerances for risk in general. A start-up entrepreneur is more likely to go “all in” on a new venture than the CEO of a Fortune 500 company whose revenue and profits are measured in the billions. But there is no way to devise a no-risk strategy in an uncertain world.
So, take a few minutes to consider your organization’s style for facing risk. Do the senior executives focus on the possible threats facing your company or do they look for opportunities? Is there an emphasis on protective strategies, such as purchasing insurance, to guard against financial loss if things go wrong? With larger companies, you can also look at the balance between mature and growth-oriented business units. Is there a strong “tilt” one way or the other?
Here are three suggestions for helping your organization cope with uncertainty:
- Identify and prioritize the immediate risks to your company. Hold a brainstorming session and list the key issues, such as theft of data secrets, windstorms, departure of a high-profile CEO, etc. Then develop a risk management plan so you know how to handle the more serious potential problems before they occur.
- Look at the risks and threats facing your customers. In the consumer world, that could be a layoff by a major local employer or a change in foreign exchange rates that makes it more expensive for customers in Europe or Latin America to buy your products. In the B2B segment, your top customer could be acquired or lose market share to a competitor.
- Consider forming a dedicated team to focus on innovation and the opportunities created by uncertainty. This should include a high-level executive who can lead the charge to take advantage of a timely change in market conditions.
Because it’s impossible to control global uncertainties, successful companies take a proactive approach to change—both positive and negative. They have a leadership team ready to respond quickly when bad things happen. They also focus on getting ahead of the market by developing innovative products and services. Companies like Apple and Amazon have been very successful in shaping potential consumer and B2B demand, despite the risks. It’s a strategy that can bring great results for your organization as well.