It is not an overstatement to say that today we are in a time of massive change. Perhaps not unprecedented historically except in detail but massive nonetheless. And by the looks of things right now, these changes will be both long-lasting and devastating for many everywhere.
The word “catastrophic” comes to mind but this situation seems different. A catastrophe is an event, finite and certain both in duration and in location even though aftereffects may extend over years. Instead, we are dealing with a worldwide virus outbreak that has been amplified enormously by panic-driven reactions and very little credible information. Divisive politics and diverse agendas complicate almost everything.
Do you feel as if you are in a warzone of some kind? I sure do, even though I have no military experience for reference. This all just feels so beyond-belief, so beyond-understandingly different.
I think about the millions of businesses trying desperately today to cope with whatever is happening. Many, especially small businesses, are dying or are already dead. Millions now unemployed, millions more to come. Even larger, stronger businesses are deeply affected. Evidence of thrashing about rather than managing is increasing every day. This is so far from normal that we seem to be living in new, hardly-comprehensible times.
For many businesses, it is truly an economic warzone.
If you are an executive or manager, how do you survive through such times without experiencing potentially-fatal or at least permanent damage to your business? There is no rulebook or procedure manual for this one.
What are we dealing with right now? Here is my shortlist:
- Huge changes occurring almost daily, forcing fast-action on little data
- Great uncertainty about what is actually happening
- No precedents for dealing effectively with this situation
Or maybe there are: could battlefield skills possibly be relevant here?
What are battlefield skills?
Battlefields are characterized by fast-changing conditions; great uncertainty in terms of incomplete, unreliable, and conflicting information; the ever-pressing need for immediate decisions and actions; and the overarching importance of resourcefulness and creativity.
There is no such thing as “normal” in a battlefield. Timeframes for decision and action are small and unpredictable. Communication is critical. Consensus may be unattainable so strong leadership and tight teamwork are essential.
A battlefield environment places paramount importance on these three skills:
- Situation assessment – in real-time, but as a process, not a project
- Identifying and prioritizing – dynamic goals, capabilities, and opportunities
- Execution – actions, contingencies, expected outcomes, results, lessons
How is this different from what managers do pretty much every day? Hugely different in fact and here is why.
Situation assessment has to be real-time
One major difference is that everything moves forward in real-time. There is no time for careful study and developing a consensus. Information you have at hand at any point is mostly incomplete, often unreliable, and filled with conflicts. And it changes – quickly and unpredictably in many cases. Assessment has to take place in real-time – as an ongoing process, not a project.
A second major difference is that your goals, as a consequence, need to be both prioritized and dynamic – based on your current known capabilities and especially on creatively-viewed opportunities. This places enormous importance on communications – timeliness, clarity, focus, and follow-up.
Third is the dynamically defined and managed process of execution. Actions that get things moving are subject to both foreseen and unforeseen contingencies that must be accommodated. Figuring out expected consequences can provide a rough means of determining what is actually taking place (i.e., results) relative to these expectations. Significant deviations here drive should changes in actions and possibly in goals as well. Translating all of this into lessons that go into practice almost immediately is also critically important.
Organizations, however, are designed for stability and relative certainty, not for highly-dynamic situations that are fundamentally uncertain. This means that your business itself is probably ill-suited to what is now required. How flexible are you?
Most managements will probably answer this truthfully as “not very”.
This acknowledgement can in fact be a great starting point.
Battlefield conditions and events drive change
In a battlefield, the immediate situation drives and determines action. Whether or not to act is not an option.
Your business is going to change, probably dramatically, no matter what you do. Your battlefield action options are limited to attempts to manage and direct this change. Or the inexorable changes will manage and direct you.
At times, your action options will be severely limited. If you have enough cash to last just 30-45 days with zero sales, then you are probably going to have to lay off all but a small core of key people immediately and try to make the limited cash last until a restart is possible.
Larger and stronger businesses, however, may have the ability to develop proactive, and especially, creative responses. Change, however unpleasant, nearly always creates opportunities. But these are visible and valuable only if you are watching and can innovatively respond. Business-as-usual rarely works:
“The greatest danger in times of turbulence is not the turbulence—it is to act with yesterday’s logic.”— Management Guru Peter Drucker
“Every problem is an opportunity in disguise.”— Second President John Adams
In my experience, relatively few managers and executives are truly effective innovators, especially under highly time-constrained battlefield conditions. They tend to be best at execution within a somewhat normal business situation.
Managing a business in times of crisis is very different
If this describes your business, then you may want to think about an alternative that goes something like the following:
Which managers and executives in your organization have demonstrated skills at out-of-the-box thinking? Which have demonstrated success at managing a tough crisis within a short time period?
Can you develop these lists quickly? If so, you may have the foundation for an effective economic battlefield innovation team.
Members of such a team would have to be available full-time on very short notice. Proximity, especially these days, is probably not necessary. Is there an obvious team leader? You may have to designate one on the fly and be prepared to switch as performance dictates. As in a battlefield.
Innovation here is not discovery but developing business-creative responses to what is happening – in real-time as reality unfolds.
This, I think, is an extremely important distinction. Keywords here are “creative” and “real-time”.
Your innovation team may in fact be reinventing your business.
Reinventing your business
This is much more than simply adjusting existing operations to reflect demand and supply changes as these emerge. To begin with, it turns out that “reinventing” is not a particularly new idea. It looks in fact like it has long been a staple of business consulting and management. Who knew?
Reading up on this amazingly-old, new idea suggests that virtually every business of any size has long since been reinvented or has made reinvention a standard operating procedure. Maybe it is possible to reinvent being reinvented?
As you can quickly see, this approach seems to be missing the point somehow. Reinvention until now looks mainly like a competitively-driven effort – keeping up or gaining a bit. Think, for example, digital transformation.
To us old computer guys, this mysterious term sounds an awful lot like what has been happening for the past 60 years or so. New name, which may help somehow, but just process and technology evolution. Not reinvention in my mind.
Okay, so maybe we need a new term to get things moving right now.
Well, reading some more begins to tell me that all of the alternatives that come readily to mind are pretty much used up. Now I am wondering if you really need to “reinvent your business”, whatever that actually means in practice.
Perhaps “reinvention” is simply “innovation”?
At this moment, however, we are looking at doing effective innovation within the context of an economic warzone. Either one is difficult; doing both at the same time is a real challenge.
The survivors and winners are going to have to do both. Well.
Dealing with Uncertainty
Humans are, at least in some cases, extremely good at pattern recognition. Probably saved the species many times across the eons. Think of this as a skill at “connecting-the-dots” in practical, insightful ways.
This is probably what “innovation” actually means in practice today.
You will have to reinvent your business to succeed in the evolving but highly uncertain business environment. The old “normal” is gone forever. The “new normal” is almost impossible to discern as it forms. It is likely to be visible and understood only after the fact – too late for those who were unable to change in pace with fast-moving events.
Timing for a return to “normal”? How about never? A better question is probably something like “when will the situation stabilize to some workable degree”? Crisis-forever does not appear sustainable.
The answer is that nobody knows. Guessing doesn’t count as “knowing”.
Reality, whatever that may be, suggests that some degree of stability will develop over some unknown period of time. Not very helpful, yes?
My sense (or guess if you prefer) is that businesses will be dealing with rapid change and great uncertainty for at least a year. Maybe even two. Maybe much longer?
VUCA – Volatility, Uncertainty, Complexity, Ambiguity
Have you heard of this relatively recent (post-Cold-War) US Army War College acronym for the extremely messy business and economic environment that was our old normal until a short time ago? I just ran across it – too late it seems. VUCA is obsolete.
Or maybe not. It turns out that there is actually a spectrum of VUCA conditions that range all the way from what looks like non-VUCA to really-bad-VUCA. So, VUCA is kind of like life, as it has been, for approximately forever.
If you want to read something on VUCA in its historical (ca. 2014) context, check out Nathan Bennett and G. James Lemoine writing in Harvard Business Review.
My take on VUCA is that it is a nice idea but mainly for a non- or mini-VUCA world. It might be good to return to such a world but today we are so far past its largely genteel, conceptual upbringing that the term hardly seems to apply.
The bottom line
Businesses must do something very different to manage themselves successfully through these times. What worked in past will rarely work today. If they don’t respond creatively – innovatively, events will take over and manage for them.
Below the bottom line
If you got this far, I just know that your main question will be: How exactly do you go about doing all of this in practice, reality, or whatever we may encounter?
Entrepreneur magazine in its recent article “How to Manage During A Crisis: Sort Everything Into “Now, Next, or Later” has a particular viewpoint on managing when almost everything is unpredictable:
One of the first lessons from the coronavirus, even at this early stage of the pandemic, is that you can never plan for everything. The follow-up lesson, however, should give us all some hope. We can at least be more resilient when major, unexpected disruptions occur, as they inevitably will. As public officials have issued shelter-in-place orders, the situation has upped the pressure on landlords and depressed traffic in commercial sites, which has led us to think hard about how to be more resilient. Our conclusion is that we should stop wasting time planning ahead. Instead, we’ve adopted a “now, next, later” framework for decision making during crises.
Executive coaching organization Vistage offers some very specific ideas on how to manage through the exiting crisis in “4 tips for managing your business through crisis and beyond”:
“The economic freefall we’ve experienced since the beginning of March is mind numbing. Business leaders have had to place their 2020 strategic plans on the shelf and shift into crisis mode. They face critical decisions that will determine the fate and fortune of their businesses.”
Harvard Business Review has dozens of articles on managing a business in times of crisis. One that has particular relevance here is “Lessons on Leading Through Chaos from U.S. Special Operations”:
“Even prior to the economic and health shocks of Covid-19, the acronym “VUCA” — volatile, uncertain, complex, and ambiguous — had become shorthand for the operating circumstances today’s businesses face. Amid a pandemic, executives are finally realizing the importance of bringing outsiders who are comfortable dealing with the unexpected onto their teams.”