For leaders who came up in a business climate obsessed with efficiency and cost savings, putting resiliency, preparedness and exploration as top priorities is counterintuitive. Yet, the world continues to increase in complexity and uncertainty. The concepts that helped organizations succeed in the past are becoming obsolete when facing the challenges of the future.
According to Margaret Heffernan, professor of practice at the University of Bath and author of Uncharted, “after a century of management thinking that prioritized planning and efficiency, it is a challenge for leaders everywhere to accustom themselves to an environment where much is uncertain and ambiguous, and where forecasts are mere probabilities.”
Senior executives have long relied on strategic planning practices to drive forward one vision. But 2020 taught us that unpredictable events will arise that throw the plan out the window. Tools such as scenario planning begin to address the need for options and multiple outcomes. Leaders also need to adapt their skills and style to succeed in a world of experimentation, artificial intelligence (AI) and uncertainty. Here are three concepts executives need to master.
1. Be comfortable with discomfort.
Changing conditions, experiments, assumptions and unknowns create instability when making decisions for the future. Instead of becoming overwhelmed by the uncertainty, leaders must know how to move forward and create clarity for the organization and the employees.
“Facing deep uncertainty, the most effective leaders learn to be simultaneously comfortable and uncomfortable in their decision-making,” said Elsbeth Johnson, senior lecturer at MIT’s Sloan School of Management, founder of London-based SystemShift and author of Step Up, Step Back. She explains that leaders must be comfortable enough to simply make decisions yet uncomfortable enough to continue to challenge and test those decisions.
Penny Herscher, veteran Silicon Valley board director and CEO in Cupertino, Calif., adds that leaders are taking a risk with any path they choose. “But if you’re facing a difficult, scary situation, thinking through the worst that can happen helps you prepare to prevent the worst thing from happening.”
2. Ask the right questions.
Leaders must become adept at asking the right questions to determine the most likely business outcomes. Vague, unmeasurable and unimportant questions will create hurdles in the planning process, even when using technology to analyze large amounts of data. The wrong types of analysis will provide answers that seem correct but neglect to provide true value.
“The key in applying AI and ML [machine learning] techniques in any business context, but especially when attempting to parse ambiguous and fluid environments, is to start with the right question,” said Matthew Beers, former lead engineer and chief technology officer in Ashland, Ore. “This frames the analysis and provides a guide for judging whether the answer makes sense.”
Johnson emphasizes the use of both quantitative and qualitative analysis. Skills drawn from sociology and anthropology help understand the problem so that the right questions can be asked and the right data collected.
3. Apply the right tools.
Not all future planning can be reduced to one type of process. Scenario planning is a strong tool for examining the future but it isn’t the right tool for every company or situation.
Strategic planning, scenario planning, sensing, forecasting and contingency planning are all critical tools, according to Barry Salzberg, former global CEO of Deloitte based in New York. He adds that workforce and workplace planning are also important factors in moving forward.
“I anchor myself in the fact that the future is uncertain; I make the process data-driven as best as possible; and I stay focused on the mission and vision of the company,” said Salzberg. “Going through this process and evaluating and predicting opportunities and challenges creates the value.”
Youth INC relies on the four-step process of grounding, sensemaking, engaging and catalyzing to drive its vision of the future. According to Rehana Farrell, executive director of Youth INC in New York, and Beth Gullette, Ph.D., Chief People Officer of Well in Chapel Hill, N.C., grounding involves a deep understanding of mission, values and needs. Sensemaking is identifying challenges; engaging is about adapting capability and skills; and catalyzing starts with mobilizing resources.
Process Over Plans
The exponential growth of technology, shifting organizational structures, social and political events, and a focus on sustainability are just a few of the myriad ways that add complexity to the future. But the ability to operate successfully within uncertainty is not to correctly guess the future. It’s about having the right process and tools to face any future. Embracing discomfort, asking the right questions and deploying the right tools are strategies that executives can use no matter what the future holds.