Leading Through Volatility: Direction from Uncertainty
Leading your organisation through uncertain and volatile times is a challenge, but it also offers the chance to engage your team in working towards a clear direction. Combined with scenario analysis, it is an opportunity to develop a fluid and agile workspace that efficiently tackles problems with a collaborative and positive approach.
As a leader, it is your goal to establish this in order to guide your organisation through what may appear to be a directionless state. You need to create a comfortable environment that challenges and overcomes complex problems and with driver-based planning and sensitivity analysis, you can quickly understand how to reach achievable destinations. Direction, collaboration, trust, questioning and information sharing: That’s all it takes.
Working in the Volatile and Unknown
Volatility is unavoidable. What’s more, volatility is opportunity. Opportunity to grow as a team and develop leadership capabilities that strengthen your organisation as a whole.
People evolve in stages. They learn to mature, accept and learn how to adapt in the face of uncertainty in order to produce creative solutions. As a leader, you need to celebrate these solutions and encourage people to learn and experiment. Learning and working are not two isolated entities. Instead, they must be conducted together through genuine questioning and information sharing.
That being said, healthy competition can inspire inventive responses. Working in the face of volatility requires challenges to be overcome through these responses. However, this cannot be at the expense of collaboration or smothering people’s excitement to listen and consider other people’s approaches.
Setting a Direction
People seek direction and priorities, especially during a time of volatility and uncertainty. They need to be offered perspective and clear goals to stay focused on a set direction. This not only strengthens the capability of your team but also develops trust in your leadership that is the building block for working through ambiguity.
As mentioned, collaborating is paramount to success. In setting a direction for your organisation this is no different. People need to understand what they are working towards, and the best way to achieve this is to create a direction together by listening to people and their contributions. You need to create a shared vision that inspires purpose in the team and motivated people to achieve clear goals.
Ask questions and encourage others to ask questions. If you don’t know or understand something, asking questions that seek the answers you are after broadens your perspective on what is possible and achievable. When setting a direction, understanding the factors that go into stepping on that path enables you to set achievable milestones and goals that encourage your team to keep going.
Don’t expect you or members of your team to solve problems alone. In tackling volatile situations everyone needs to consider contrary answers and other people’s perspectives to create inventive solutions to complex problems.
Experimentation and Problem Solving
Through creating shared visions and goals, your team will understand the boundaries in which to perform ‘safe to fail’ experiments. This kind of environment also inspires trust and the comfortability to admit what you don’t know. Drawing on past examples in this situation emphasises learning and adaptation to the new ambiguous situation at hand.
Experimenting is the key to discovering new possibilities and charting uncertainty. Make experiments fast, repeatable and cheap in order to scout the path ahead to stay on the right direction. Design them in order to produce clear and measurable results, then repeat them at different time and in different contexts to test their success and applicability.
“Everyone has a plan, ‘til they get punched in the mouth”
– Mike Tyson
What happens if demand drops by 20%? What happens if emergence from volatility tracks in multiple directions? This is where Scenario Analysis comes into play to understand the impact of different scenarios before they happen. It give your organisation time to make plans to prepare for various outcomes.
You need to be able to identify the key drivers in your business, model them and then plan for different outcomes using scenario analysis. If you would like to read more about identifying key drivers, this article here covers it in length.
Moving Forward with Driver-Based Planning
Identify key drivers of a business and then build a plan utilising those drivers to forecast financial outcomes. After you have a broader strategic direction established, within that direction there would be objectives and goals that are aligned to key indicators or drivers which can then be used for modelling and planning the business. Here at Infocube we specialise in helping clients with developing, implementing and embedding driver-based planning models.
The ultimate goal is to develop an inquisitive, fast-learning environment in which people collaborate and give feedback on creative solutions. A constant flow of information between leadership and staff allows for clear goals to be set, options tested and implemented through the successful use of driver-based planning models and scenario analysis, leading your organisation through the unknown.
If you would like to ask us more about scenario analysis and driver-based planning, please get in touch with us. Simply fill out the form below and we will get back to you as soon as we can!
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