The resilience imperative: Succeeding in uncertain times

From CEO’s desk

Resilience Imperative

2020 was a wake-up call of every sort, probably! The COVID-19 pandemic which shook every one in untold ways, also continues to send compelling messages & take aways constantly  for such Catastrophic events are less predictable. They will unfold faster but in more varied ways. This heralds the need for a new approach for survival – at every instance be it – The digital and technology revolution, climate change, and geopolitical uncertainty.

To thrive in the coming years, its almost imperative that companies must develop resilience—the ability to withstand unpredictable threat or change and then to emerge stronger. “Develop resilience” is easy to say but hard to define, and yet harder to implement. We as a leadership consulting & Search firm reiterate that time has come for one & all to realise that its imperative to be resilient.  In a world where the future is uncertain and change comes fast, companies need to look beyond short-term performance and basic organizational health. They must be able not only to withstand unpredictable threat or change but to emerge stronger. In short, they need to be resilient.

The resilience imperative

The digital revolution has increased the availability of data, the degree of connectivity, and the speed at which decisions are made. This offers transformational promise but also comes with potential for large-scale failure and security breaches, together with rapid cascading of consequences. It also increases the speed at which a company’s reputation can change in the eyes of consumers and employees.

Having highly adaptable business models means that you actually serve every opportunity & every opportunity become your customer! The fact that you can adapt to significant shifts in customer demand, the competitive landscape, technological changes, and the regulatory terrain. This involves maintaining an innovation portfolio and valuing entrepreneurship in a very agile manner. Particularly during times of crisis, resilient organizations will place strategic bets to evolve their business models.

The changing climate presents structural shifts to companies’ risk-return profiles, which will accelerate nonlinearly. Companies need to navigate concerns for their immediate bottom line together with pressures from governments, investors, and society at large. All this while natural disasters are growing more frequent and severe.

Corporates must necessarily balance short- and longer-term financial aims. A solid capital position and sufficient liquidity enables organizations to weather rapid drops in revenue, increased cost, or credit issues. This could also open up exploring all & sundry sources of increasing the top line. Cross selling could be the key to untap this prospect. Every penny saved is a penny earned.

Companies in the manufacturing space need to maintain robust production capacity that can both flex to meet changes in demand as well as remain stable in the face of operational disruption, all without sacrificing quality. Marginal costing & marginal revenue approach could prove to be more sensible. Optimising supply chains and delivery mechanisms to maintain operational capacity.

Making talent resilient – is the key to success today.  While impactful decisions are being made on hiring, its equally important to ensure that the workforce remains extremely focussed & connected with your Company. Talent development upskilling or reskilling your employees flexibly and much more rapidly, by implementing strong people processes that are free of bias, could be the start for this. While promoting fast and agile decision making, its important for Corporates to embrace the practical constraints of remote working.

“You are what you do”,  or “You are only as good as your team” – While it takes a lot to get the best team for yourself, the never failing attribute which truly sets you apart as Company would be  – “Integrity & accountability”. A wide range of stakeholders—from employees to customers to regulators to investors to society at large—increasingly looks to hold firms accountable in a range of ways, spanning from their brand promise to their stance on environmental, social, and governance.

Resilience could mean as something simple as – setting the bar high for yourself knowing its tough & just holding on whether its—enshrined in mission, values, and purpose, or commitments or philosophies. It also requires immense flexibility and openness in listening to and communicating with stakeholders, anticipating, and addressing expectations and responding to reality in pragmatic ways. While we believe we have it in us or would want to believe so, we also need to recognise the imperative need to develop resilience especially in these uncertain times.

The CEO – A role as peerless as it can be!

CEO – A role as peerless as it can be

While the most sought after role is the CEO role in any Corporate for various compelling reasons such as it being exciting, rewarding, and influential & so on, it’s also a role that is probably the most consuming & imposing. What the CEO controls—the company’s most strategic direction —accounts for 45 percent of a company’s performance. Despite the luster of the role, serving as a CEO can be all-consuming, lonely, and stressful.  The high standards and broad expectations of directors, shareholders, customers, and employees create an environment of relentless scrutiny in which one move can dramatically make or derail an accomplished career. While it sounds as simple as “set the strategy,” “shape the culture,” and “get the right team going”, its not just that. Its about the industry contexts & leadership preferences as well. However, some of the common traits such as driving through the rough patch seamlessly, resilience, and risk tolerance make CEOs certainly more rugged & successful!

So this brings us to the important question “What are the mindsets and practices of excellent CEOs?” six elements of the CEO’s job which are like the “holy grail” about the role both practically & theoretically would be – setting the strategy, aligning the organization, leading the team, working with the board, being the face of the company to external stakeholders, and managing one’s own time and energy. While their mindset is to beat the odds & this is throughout their strategic thinking it centers on being bold in the areas that matter most. There are three practices, or habits, of excellent CEOs that we see on this dimension. The first one is reframing what winning means – something like “Think bigger in your space to be the best”. The second piece is around bold moves – have elevated vision & a set of bold moves that matter most. The last piece is quite tactical, relating to the boldness with which you allocate resources. Research shows that most organizations, even if they set a bold vision, only tweak the budgets, plus or minus what they had last year. Excellent CEOs typically take more of a clean-sheet approach.

Some of the top traits of an excellent CEO would be-

Clean slate approach – “If I were to reallocate 10 percent of my budget each year to what we say matters most to our future, what would that look like?”

Tend to maintain enough distance from their team members to be objective, yet enough closeness to gain their trust and loyalty. And that’s not an easy thing to do.

Choose to go beyond employee engagement. They look at things like how the company innovates, role clarity, how externally oriented people behave.

 They tend to think about roles & what roles in the organization create or protect the most value? What really separates the excellent from the good is this mindset that says, “I will put equal rigor and discipline in this realm of the organization as I put on corporate strategy or any more quantitative operational area.”

They tend to be clear on the organizational structure & teams & processes. CEOs are equally specific about where they want to drive speed and agility for they believe that teamwork makes the dream work. 

Some interesting facts about CEOs containing 25 years’ worth of data on 7,800 CEOs from 3,500 public companies across 70 countries and 24 industries

  • Just three in five newly appointed CEOs live up to performance expectations in their first 18 months on the job.
  • The CEO’s job so specialized that he felt executives could prepare for the post only by holding it
  • That fellow CEOs don’t necessarily make reliable guides.
  • The reality is, you set the tone and metabolic rate for your tenure in that first year. By the time this CEO, in years two and three, tried to take the organization in a new direction, the organization wasn’t willing to follow.
  • Only about 20 percent of the most value-creating roles report to the CEO, about 60 percent are two levels down, and about 10 percent are even lower. And when a new strategy is involved, 10 percent typically don’t yet exist!
  • High-performing teams are 1.9 times as successful, from a financial performance standpoint, as others. But it’s hard. More than 50 percent of top team members feel their team is ineffective while fewer than a third of CEOs feel they lead an ineffective team, so there can be a real mismatch there.
  • The more senior your get, the more you lose the ability to understand when people are giving you a fake laugh—you know, like when you tell a joke. It’s very easy to start to feel a bit invincible. You tune out the critics. 

Finally, our two thoughts in this context would be!

“Good” is being the leader the organization needs you to be. “Great” leaders tend to move beyond that. They find a way to be authentically themselves while still delivering what the organization needs. Understanding the legacy you want to leave and what you stand for matters here. Choosing authenticity in your leadership model is part of ensuring that. Being an excellent CEOs is as simple as staying hungry & also staying humble by getting out with the rank and file. Having strong inner circles that help you keep their feet on the ground and remind you just that “the CEO role isn’t forever”