11 Feb Why Hope is Not a Strategy: Managing Your Business in Times of Uncertainty
“Underestimating uncertainty can lead to strategies that neither defend against the threats nor take advantage of the opportunities that higher levels of uncertainty may provide.”– Harvard Business Review
For our province and for our country, 2019 is a significant year. Change is imminent and as a leader in your business or organization, now is the time to focus. While the current economic and political climate can leave organizations feeling uncertain of their next moves, it is important to view uncertainty as a time for opportunity.
Here are a few ways to thrive in times of uncertainty:
When times are uncertain in our economy and in our political environment, many organizations tend to resort to a passive, risk averse state. Now is not the time for decision-making paralysis. Now is the time to be bold and make strategically sound decisions for your business. While uncertainty holds risk, it also holds opportunity for disruption.
Let’s look at Kodak for example. In the 1970s, Kodak held 90% of the market share for photographic film sales in the United States, yet by 2012, the company was entirely bankrupt. How does this happen?
One word: complacency. Complacency kills organizations. Just because things are good now, doesn’t mean we can stop improving and innovating.
Rather than take advantage of their innovative technology, Kodak feared jeopardizing their own stronghold in the film business. The problem for Kodak? Competitors weren’t afraid to take advantage of the opportunity. Nikon, Sony and Canon were quick to fill the gap in the expanding digital niche, making Kodak virtually extinct by 2012.
Use times of uncertainty as an opportunity to be bold. While I’m not encouraging you to go completely rogue and use the “just do it” approach, I encourage you to make strategic, calculated decisions and not be afraid to take risks.
The road to success isn’t a straight line. It’s important that in any organization, an element of flexibility remain at the forefront of our operations. Use times of uncertainty to reflect on your business model and underlying opportunities that can add value to your overall client experience.
There are many ways to add value without adding dollars spent. Think about developing connections, opportunity, and ideas.
- Do you know people or businesses who would be a good source of knowledge, expertise, or work for your clients?
- Have you heard about a new opportunity that will increase their business opportunities or expand their service offering?
- Can you provide ideas or advice on any challenges they experience in their business?
See more best practices to help you survive and thrive in a downturn here.
As stated above, complacency kills. Don’t sit back and wait to see what happens in uncertain times.
Consider conducting a PEST analysis for your organization. Start by brainstorming the following factors:
1. Political Factors
- When is the country’s next municipal, provincial, or federal election?
- How could this change government or regional policy?
- Who are the most likely contenders for power?
- What are their views on business policy, and on other policies that affect your organization?
- Could any pending legislation or taxation changes affect your business, either positively or negatively?
- How will business regulation, along with any planned changes to it, affect your business?
- Is there a trend towards regulation or deregulation?
2. Economic Factors
- How stable is the current economy?
- Is it growing, stagnating, or declining?
- Are customers’ levels of disposable income rising or falling?
- How is this likely to change in the next few years?
- Are businesses trimming budgets?
- How does this impact their giving and community initiatives?
3. Socio-Cultural Factors
- What are your society’s levels of health, education, and social mobility?
- How are these changing, and what impact does this have?
- What employment patterns, job market trends, and attitudes toward work can you observe?
- Are these different for different age groups?
- What social attitudes and social taboos could affect your business?
- Have there been recent socio-cultural changes that might affect this?
4. Technological Factors
- Are there any new technologies that you could be using?
- Are there any new technologies on the horizon that could radically affect your work or your industry?
- Do any of your competitors have access to new technologies that could redefine their products or services?
Mind Tools has put together an excellent resource on building out your PEST analysis.
“Inaction is the riskiest response to the uncertainties of an economic crisis. But rash or scattershot action can be nearly as damaging.”– Harvard Business Review
While there are uncertain times ahead for many organizations, it is important to remember that hope is not a strategy. Be bold, pivot and be proactive.
To be competitive we must stay open and flexible to improvements wherever possible. Success in tough times means constantly adapting and adjusting to meet current market realities and actively pursuing continuous progress.
About The Author
As Founder and President of Incite, Ted brings over 25 years of strategic marketing and consulting experience to the table. His proven ability to engage in complex business strategy and multi-stakeholder environments has enabled him to help a diverse range of private and public sector clients with growth strategy, communications, strategic issues management and brand development.
Incite is a marketing and strategy consulting firm specializing in growth, brand, and communications. From market expansion and brand development, to supporting post-merger integration and building internal engagement, Incite’s strategic approach helps clients to better understand their market, clearly articulate value, align organizational resources, and connect with key stakeholders to achieve success.