for troubled times
Since the financial crisis of 2007/ 2008, volatility has returned to new highs. When faced with turbulent times, leaders in business, politics and society tend to relay contrasting responses. London Business School’s Adjunct Professor of Strategy and Entrepreneurship, Dominic Houlder, and Executive Fellow of Strategy and Entrepreneurship, Nandu Nandkishore, believe the future belongs to leaders who ignore the pressure to slash jobs, capture value and retreat, and instead choose to pursue sustainable value creation. They've kindly suggested some tactics to help navigate the today's chaotic business environment.
1. Be agile
Where in the past companies might have developed a strategy and created a step-by-step process to execute it, today leaders need a more iterative approach that lets them respond to the sheer pace of change and number of sources of disruption.
2. Build resilience
Resilience and robustness is also required – an ability to absorb shocks. And while large corporations are often written off as lumbering dinosaurs, they are more like saltwater crocodiles who might look like dinosaurs, but when the opportunity is there, they’ll snap it up.
3. Stay true to your purpose
It is vital for a leader to understand the sense of purpose that exists in an organisation. And a leader should be very careful about tampering with it or changing it. In times of turbulence, it is up to leaders to understand, legitimise, spotlight and celebrate the motivations and values that underlie an organisation and communicate them through storytelling.
4. Create platforms to respond in good – and bad – times
Any company will have good and back luck events in its life. What marks a company out is what it does when those events happen. Leaders can’t plan for those events but they can create a platform that makes it possible for them to respond to events.
5. Look to the medium term
Leaders and management focused on short-term profits are more likely to cut out spare capacity, but that will also decrease their ability to respond to good luck and bad luck events. And although public companies always state a long-term vision this tends to be set so far in the future that it becomes meaningless. What gets missed is the mediumterm – and this is the time frame that lets us consider the health of the platform, the meaning and purpose of the organisation, and the company’s absorptive capacity. The key to surviving in turbulent times is to choose to pursue new opportunities to create value. Hold on to the five pillars of agility combined with resilience, purpose, platforms and a focus on the medium term to help navigate the stormy times ahead.
About London Business School London Business School's vision is to have a profound impact on the way the world does business. The School is consistently ranked in the global top 10 for its programmes and is widely acknowledged as a centre for outstanding research.
As well as its top-ranked full-time MBA*, the School offers degree and award winning executive education programmes** to executives from around the world.
With a presence in four international cities – London, New York, Hong Kong and Dubai – the School is well positioned to equip students from more than 130 countries with the tools needed to operate in today’s business environment. The School has more than 39,000 alumni, from over 150 countries, which provide a wealth of knowledge, business experience and worldwide networking opportunities.
London Business School’s 157 academics come from more than 30 countries and cover seven subject areas: accounting; economics; finance; management science and operations; marketing; organisational behaviour; and strategy and entrepreneurship.
* 2013 Forbes international MBA ranking, 2012 Bloomberg BusinessWeek international MBA ranking and Financial Times MBA 2009, 2010 and 2011 rankings
**London Business School was awarded the 2013 EFMD Excellence in Practice Award for its 10-year partnership with Danone.