To deal with uncertainty, we must learn to embrace it.
In business, as in life, what ultimately matters the most is how you adapt to changes. I think many of us get in trouble trying too hard to predict things. Is it really necessary to know the future?
With the right set of operating guidelines, I believe you can act with certainty despite having limited information and/or resources.
To inspire you to find your own guidelines, here are some examples from a Disruption Forum panel that I ran with Andreas Wixler (CTO & Co-Founder at FINN), Sabine Häussermann (CEO & Founder at VisionHealth), and Ingmar Krusch (Chief Information Officer at Solaris).
Guideline #1: Focus on fundamentals and sustainable profitability
The gold rush in tech is over. Free money has evaporated from the market, and you can no longer throw cash at the wall and see where it sticks. Game over? Not quite. There’s still plenty of money to be made.
“All I see and all I hear are opportunities,” said Andreas Wixler, CTO & Co-Founder at FINN. I agree, and I would only add that a new approach is needed to capture those opportunities.
From the early 2000s until recently, growth was all the rage.
With the current market conditions, the pendulum has swung back from growth toward profitability.
I think it’s a good thing. This means that business leaders need to refocus on fundamentals and sustainable profitability, and not rely on external money unless it’s necessary to kick off operations.
Guideline #2: Bet on authenticity and transparency
According to Ingmar Krusch, Chief Information Officer at Solaris, “the key to change is authenticity.”
With market volatility at record highs, executives are forced to make lots of tough decisions quickly. The way through that is to be authentic and transparent with your teams, your stakeholders, and your customers.
Based on years of research into the topic, London Business School Professor Dan Cable states that
“it is far more helpful for leaders to show ‘confident vulnerability’ than it is for them to appear out of reach.”
It’s not easy to do, but it’s worth it. Confident vulnerability is the foundation of a healthy organizational culture.
Guideline #3: Don’t try to do it all
How do you prioritize? Paraphrasing what Andreas Wixler said during the panel, you use a ranking function to find your top ten projects, and then cut all of them except #1. Regarding the markets that you want to conquer, pick one or two instead of going global from the start.
Harsh? A little, but there’s a big benefit to this approach. Sabine Häussermann, CEO & Founder at VisionHealth, mentioned that “focus takes the pressure out and it’s saner, as opposed to trying to do everything at once.”
Focus can be therapeutic for you and your teams. It can take stress away, and help unleash your people’s creative and productive energy.
Do less things, but do them well.
Next, analyze the outcomes, and plan your next step from there.
Guideline #4: Gain confidence first, and then ramp up the speed
During the panel, my guests and I all agreed that the faster you try to go, the more risk you have to take on. Risk is good, but how much can you take on before you lose your footing?
The sweet spot is to gain confidence first, and then go fast. Here’s why:
- If you have a unique advantage, you can still come out on top even if competitors initially overtake you in the race to market.
- If your organization isn’t used to operating at a fast pace, trying to go from 0 to 100 quickly will leave you bruised and battered, so take the time to prepare and ramp up the tempo gradually.
- Even if you operate at high speeds by default, it’s good to slow down at times and take a good look if you’re going in the right direction.
The priority should be to achieve confidence that you’re going in the right general direction, understand and accept the risk, and only then ramp up the speed as much as you can.
Guideline #5: Sustainability, diversity, and profitability go together perfectly
Sustainability is now an essential part of business. Some would even say that you should put your sustainability goals first, and then build profitability around them.
For example, at FINN, sustainability is not an option but a staple of the company that’s visible in their messaging – “to make mobility fun and sustainable.”
Same with diversity. With diverse teams, “the outcomes are just so much better,” as Ingmar Krusch admitted. There’s research to prove it. Forbes reports that
“racially and ethnically diverse companies are 35% more likely to perform better, while diverse teams are 70% more likely to capture and penetrate new markets.”
I strongly believe that by reducing the bias against sustainability and diversity, your organization can win big in the long term.
Future winners will be those that are most comfortable with uncertainty
It’s easy to say that you need to adapt to change, but it’s probably the hardest thing to do for any person on Earth. Just on a personal level, it takes lots of effort and not just once, but throughout your whole life.
Anybody who has dropped out of going to the gym after a week of dedication knows how hard it is to persevere. To build an organization that can swiftly adapt is an enormous effort, but it’s necessary.