A few weeks ago I wrote about the need for leaders at all levels to have good advice and to keep those advisors close to them. It’s funny how the world can change in a few weeks. In that time, here in New Zealand we’ve had arguably our biggest disaster in the Christchurch earthquake, while elsewhere in the world Libya is in revolt and the associated impact on the price of oil is affecting economies everywhere. The ripple effect of such events means that many more things will change in months to come. In New Zealand businesses outside of Christchurch will feel some impact, if they are not already. And the cost of the rebuild will have an affect on everyone in the country. Already debate is raging about whether we should rebuild or not, and while I am not going to comment on that here, I would like to draw some parallels with the challenge that leaders face when the environment changes around them.
Businesses spend time in developing strategy to guide leaders in the day to day choices that are made and actions to be taken. For some strategy is a rock solid path, while others use it in a fluid way. A key part of strategising is looking at the context your business finds itself in and environment that could be expected in the future as well as the current reality.
But what happens when that context changes? A test of leadership is their ability to steer a course when the environment changes.
Nobody predicted an earthquake with such devastation as we’ve now seen in Christchurch. It’s a major city in New Zealand terms, ‘it’s always been here’ is the cry from some, so we must rebuild it. Others question whether that is a smart move given the changing environment, the relative cost and the uncertainty of the geological future. There are world cup games scheduled for Christchurch and the tug of war between the emotional cries of ‘solidarity’ and ‘it would be good for the devastated population’ are being countered with ‘can we risk it happening again?’.
In the midst of change leaders have to make choices. Do we stick with the strategy we’ve set? Do we watch a little longer and see what happens? Do we jump now and cut our losses? Whether it is a suddenly under-performing product or arm of the business, a change in competition, shift in consumer trends, hike in the interest rate, sudden collapse of the market, a rise in the exchange rate or the multitude of other challenges that arise, leaders are there to make choices.
The difficulty is that difficult times also bring a lot of day to day issues to manage and wherever you sit in the organisation it is easy to get sucked in to those. And all the time the circumstances are setting in and your opportunity to do what you should do, is drifting away. In times like this many leaders make reactive or emotional decisions: ‘stick to the strategy. It worked in the past it will work now’, ‘let’s jump, we can’t risk it’, ‘we’ve always done it this way and we’re still here aren’t we!’. And yes, you might get it right. You might dig in and ride the storm or you might jump and steal a march as others flounder.
But you know what you should do, even while you are reacting or digging in and letting circumstances run your day, dont you. You should gather trusted advisors and key thinkers around you and you calmly and dispassionately take the emotion out of the debate, test the strategy against the environment, surface the risks and opportunities and reset the course accordingly.
History will judge your choices that our politicians will make over the coming weeks or months. As a leader in business, your choices may not have as much significance nationally, but the questions will still be asked.
So how do you want to be judged? Stubbornly or smartly strategic?