Innovation can feel easy when the global economy is running at maximum strength. Investment pours in. Risks come with a promise of a soft landing if they don’t succeed. But with uncertainty about a worldwide pullback—from China to Brexit to Apple’s revenue—managers might find themselves confronting new challenges.
Some see the slowdown as a natural cooling of the economy. But whatever the reasons, the new landscape has changed the way leaders build businesses, quite possibly for the better. Planning matters. Value matters. Line-of-sight matters. You still need to move fast. You still need to iterate. But you also need to make decisions with foresight, backed by the data.
Navigating the Rapids
The close of 2018 rattled many businesses and investors. Trade troubles between the US and China along with the longest government shutdown in history contributed to market whiplash. More startling, predictions for 2019 foretell more volatility. Research from International Data reveals that fluctuating global conditions could make for a “rocky ride” ahead.
The pace of change in technology also adds to a more tumultuous business climate. Customers, accustomed to instant responses in the digital age, have changed the way products develop and survive.
But to some market watchers, a less forgiving environment could actually be a good thing for businesses looking to create more enduring value.
With more at stake, stability becomes key. “Organizations that cultivate an ability to understand and eliminate uncertainties will survive the twists and turns of innovation,” write Christian Seelos and Johanna Mair in Stanford Social Innovation Review.
The successful organizations, the authors write, confront the variables head on. Leaders identify where to dial back on risks. They join in research and testing, rather than relying on others, and focus on keeping their managers in place to prevent even more volatility.
Difficult periods are the time to invest in planning, even when leaders and stockholders may itch to take quick action. “Rethink your business model and processes. No company does everything right,” notes Inc. Embrace the opportunity for “reflection, refinement, and redesign.”
With a plan in place, companies can sprint off the mark if crisis hits. “When the executive team has been involved in developing the contingency plan, they will buy into the execution of the plan faster than if the plan is sprung on them in a rush. Thinking through the contingency plan ahead of time cuts the time lag significantly, which dramatically improves the odds of success,” notes Forbes.
Always Risky Business
Following the winter volatility, companies are tip-toeing into the spring. “Market conditions shift rapidly,” writes Lisa Lai in January’s Harvard Business Review. “Customers have more choices than ever. Resources are constrained.”
But for businesses of any size, change is a constant. To remain nimble, management needs to focus on creating value for today’s customer. To reduce risk, and thrive, the process requires continuously improving workflow, retaining the best talent, and moving all teams toward product quality.
Navigating the white waters of the current environment demands a map and a clear scope. With a carefully drafted plan, based on solid analysis and winning products, you can come out ahead when the storm blows by.