How Can You Lead in Uncertain Times?
Uncertainty is everywhere - whether it’s created by weather, politics or unstoppable digital disruption. In this guest post, for Upstart, advisor and Non-Exec Director Jill Ridley-Smith explains how business leaders should embrace and deal with it, rather than use it as an excuse to postpone decision-making.
As we write, businesses and individuals in the UK are focused on the complex and obscure politics which will determine the country’s parting of ways with the EU.
Whatever your views are on Brexit, we can agree that these uncertain and volatile times are heightening pressures on British business leaders to deliver. When we finally look back at 2019, we will applaud and celebrate CEOs who took the opportunity, made brilliant decisions and propelled businesses to succeed, and we will lambast those that didn't. How can you engineer to be the former, not the latter? How can you make the right decisions in the face of this uncertainty?
Let's say you are the CEO of an emerging fintech business and you know that London's financial services companies have moved almost £800bn assets to Europe, so, do you stay or do you go along with these assets? Or perhaps you work in AI. Will the potential labour shortages from Brexit mean traditional businesses in logistics and manufacturing opening up to your tech? Should you invest now, ahead of the curve?
Brexit creates risk and uncertainty, for sure.
Yet making decisions with limited or incomplete information is in the DNA of successful entrepreneurs.
Breaking down complexity, focusing, being decisive and action-oriented are all qualities found in the best CEOs of growth businesses. It's when companies get bigger and have the resources to analyse opportunities in detail, together with complicated hierarchies of decision making, that the likelihood of over-analysis and procrastination increases.
Brexit will provide good opportunities, like my AI tech example, but I believe it’s more likely to be seized on to apportion blame. If you’ve lost a deal or are experiencing costly delays or are frustrated by tiresome new regulatory requirements - Brexit will be there to blame. If you've consequently missed financial targets, blame Brexit. But leaders who get sucked into this rhetoric prioritise excuses and war-stories over actions and practicalities. In five years time, who will remember the lost contracts due to political uncertainty? Not many. What will matter is whether your company survived to fight another day or floundered and folded.
To survive - and better yet - flourish, leaders need to make good and timely decisions that provide a route plan for their teams. Unfortunately, the processes often advocated for making good decisions - gathering information, considering alternatives and testing assumptions - can also delay making fast decisions. Employees will want to know what to do or what to not do given what's happening around them, and pretty much in real time, as the danger is they'll react to the lack of direction with speculation and rumour. Confidence then wanes and employees lose commitment.
It is better to make a decision that might prove wrong than to be rudderless.
So drive towards decisions based on a combination of fact, information, experience and insight. Be satisfied with incomplete information - growth CEOs rarely have the luxury of an army of resources to back up decision making. If you have these resources at your disposal, use them wisely so they don't glue up your ability to move quickly. Leverage your inner 'growth CEO' mentality: make the decision first and then use your resources to justify it with data and analysis. Then communicate it and implement it.
So Now What?
There are three key requirements for good leadership in uncertainty:
Separate risks from uncertainty. If you know the possible range of outcomes but not which individual outcome will happen, this is risk not uncertainty. Uncertainty is when outcomes are completely unknown, its when something happens that wasn’t even imagined. You should be able to plan for and mitigate risk.
Make decisions. A leader who is decisive and action-orientated means a happy, focused team which can create value and drive growth, even in difficult times. Decide and be wrong rather than fearing the decision.
Inspire confidence, not concerns. We all know self-belief can take you a long way, so be really considered about what you say to your team and instead of dwelling on the causes of the uncertainty, paint a picture of the route to an optimistic future.
Whether you’re dealing with visible political uncertainty or the unchartered waters of digital disruption, leadership is essential.
The Lean StartUp by Eric Ries. Ries defines a startup as an organisation dedicated to creating something new under conditions of extreme uncertainty.
Jill works as a Non-Executive Director, business mentor, coach, advisor and investor. She is a currently a Non-Executive Director on the Boards of The Digital Catapult, Smartzer, Pearson Ham and Skarbek. In addition, she provides business mentoring and advisory services, particularly enjoying working with entrepreneurs of 'scale-up' and high growth companies.
She sits on Nottingham Trent University's Enterprise Panel and volunteers as a business mentor for Innovate UK. Previously, Jill worked in private equity investment and portfolio management at HgCapital and held management roles at GlaxoSmithKline and LEK Consulting. She is an experienced Non-Executive Director with over 15 years of experience working at Board level. She is an accredited commercial mediator qualifying in 2012 from the Centre for Effective Dispute Resolution (CEDR).