Navigating Through Adversity
As we move into the unknown, business risk across the globe has never been more immediate. Also, as all good leaders know, there has also never been more of an immediate need for support and direction in these times of chaos and uncertainty.
As a Trans-Tasman management consultancy, in recent weeks we have been working closely with our customers in New Zealand as they grapple with the unknown and look at the big “What’s Next.” Companies in New Zealand are two weeks further along the shutdown and rapid downturn curve than those in Australia. We have been assisting those companies with items such as survival planning, immediate cost reduction, short-term change levers, and customer retention strategies.
There has been a clear pattern to the thought process of both the people and the collective consciousness of the organisation. There have been defined steps in the journey as businesses pass from what was “Normal Business” to the unprecedented challenges caused by the COVID-19 pandemic through to how to come out on the other side.
We have seen these steps repeat in businesses of all sizes from small- to medium-size enterprises to large billion-dollar organisations—we call this the “Cycle of Adversity.” What is unique right now is the fact that these businesses are forced into a rapid downturn at the same time, in a much faster cycle than any previous recession.
The normal reaction to a rapidly changing environment or “Cycle of Adversity” is made up of four steps:
- Uncertainty and Fear – As people try to come to terms with a sudden and new environment, how do they keep themselves and their families safe? The leaders and the collective consciousness of organisations plan for immediate survival. All levers being pulled are for immediate and reactive change.
- Normalising The New State – Humans are adaptive to change, and after a short time, people adjust to the new state. Organisations start to think about the what to do next. Good leaders are communicating heavily, even though at this stage, the organisation is still pulling short-term change levers and its underlying ethos is still being driven by survival.
- Planning A Way Through – People are starting to think about the future and what they and their families will need to do in the longer term. Organisations are starting to think about how we plan for the inevitable ramp up on the other side of the downturn. This is a more tactical state of mind for both people and the organisation. The good leaders are now planning more thoroughly and communicating to the wider organisation, which provides much-needed support and guidance.
- Emerging Stronger Than Before – At the individual level, people in the “Glass Half Full” camp start to think about hidden opportunity, lessons learnt, etc. Entrepreneurial organisations are planning how to be in “Pole Position” when the inevitable ramp up occurs.
With organisations under enormous pressure as they move quickly into the unknown, entrepreneurial leaders will be thinking about such things as:
- How do we beat the competition?
- Have new markets opened up to us?
- What are some of the best practice business methodologies we can apply, whilst we are in the downturn, that will set us up for the upturn and deliver sustainable improvements?
- What are some of the business systems we can apply to become more resilient in the future and less susceptible to further downturns?
- How do I move the collective consciousness of the organisation to one of optimism and seeing the current situation and also a future opportunity?
- How do we revisit our business strategy to test for relevance in the new world or to add new opportunities that have been identified?
The faster people and their families can move through these four stages, the better they will ride the storm and the better placed they will be when things start to improve. The faster an organisation can move through these stages, the more they will thrive when the business environment improves and they have a head start, which will deliver a Competitive Advantage.
An entrepreneur will pass through the “Cycle of Adversity” in 24 hours whilst the collective belief systems of an organisation are a larger ship to steer. That stated, we are working with some customers that are already at Step 3 and closing in on Step 4 within a week of this sharp downturn experience.
This is where great leaders, great cultures and great organisations will thrive in a post pandemic world that is bound to have less organisations to compete with. Some organisations will simply not survive the sharp downturn, or some organisations will still be stuck in the “Cycle of Adversity,” pulling those short-term change levers, and they will struggle or ultimately fail.
As the world moves into this unprecedented time, ask yourself:
- Am I in the “Glass Half Full” camp?
- What stage of the cycle am I as a leader?
- What stage of the cycle is the collective belief of my organisation?
- What will my competitors be thinking?
I hope these thoughts are useful to help you prepare and bounce back, in a stronger position than before and ahead of the competition!