Uncertainty, Leadership, and Robustness
Kay Plantes knows a LOT about business model innovation. How does she see uncertainty?
Fred Schlegel has a marketing mindset. What opportunities does he see in uncertainty?
Finally, I spend a lot of client time thinking about the skills of emerging leaders. Why might uncertainty be good for them?
Assumption:Knowledge Ratio
I recently read an article in Sloan Management Review that had a very interesting ratio to consider — the ratio of assumptions to knowledge. In other words, how much are we assuming about our business compared to how much do we know about our business. Fractions are good; whole numbers are bad.
My guess is that during the 1990s the ratio was certainly smaller than today. There’s no way to know what it was for your leadership team, but suffice it to say that the ratio is larger today. During times of uncertainty we know less and assume more. And therein lies the problem. So many of today’s leaders spent their formative years in relatively benign times. But now they have to make their most important decisions in times of relatively higher uncertainty. What should they do?
Robustness
They (and you) should spend some time thinking about the concept of “robustness” and how it applies to leadership style.
Any system (like business) is said to be robust if it is capable of coping well with variations in its operating environment with minimal loss of functionality. So, be honest and ask yourself if the coming months and years are going to have more or less variation in sales trends, supplier demands, customer demands, regulations, interest rates, etc., etc.
My conclusion is that we will need more robust businesses in the coming few years and leadership that understands how to build and maintain these businesses.
Not sure what to do or to recommend? Go back to your grammar school English class and recall the explanatory power of antonyms (opposites). What are the antonyms of “robust?” Try “flabby, frail, soft, or weak.” These are descriptors you do NOT want.
So what makes your business more robust? Here are some ideas. Please add to my list.
- (Really) empower your team. They get stronger when they make decisions.
- Resist downsizing to the point of fragility. Accept a bit of inefficiency as a shock absorber.
- Increase training and development activities rather than cut the training budget. You want the best talent possible, not the most demoralized.
- Let go of your ego and listen to your suppliers’ ideas. You want them as a real partner, not one in name only.
Leadership in uncertain times is different. Face the brutal fact that you need your team’s help every bit as much as they need you. Try something dramatic – ask for it.
Date: July 29th, 2009 @ 20:12
Categories: Leadership, uncertainty
