The CEO’s Dilemma: Building Resilience in a Time of Uncertainty
Businesses around the globe are facing multiple unprecedented disruptions and an uncertain macroeconomic outlook. In the face of this complexity and volatility, leaders have to build more resilient organizations. They must be ready to turn adversity into opportunity, building sustained competitive advantage to survive long term. In this series, we examine the disruptive forces that are bearing down on business leaders today, so that they can understand where opportunities exist amid the uncertainty.
Image Source : BCG Executive Perspectives
Today’s global disruptions (e.g., geopolitical tensions, supply chain bottlenecks) and economic headwinds (e.g., soaring inflation, rising interest rates, decelerating growth, and currency fluctuations) have created a complex, once-in-ageneration, competitive environment with significant variations across geographic areas and sectors Navigating this unprecedented complexity requires business leaders to develop a dynamic perspective not only on the most likely scenarios for how their operating and economic environments will evolve, but also on the distinct opportunities and risks these scenarios present for their organizations Our research shows that “winners” in economic uncertainty do not just sit back and wait for recovery—instead, they are proactive and turn ambiguity into opportunity.
A plan to win
There is no “one size fits all” solution to today’s complex strategic challenges. But our research suggests that the best companies do two things well in crafting their unique plans to win First, they have a clear understanding of their strategic starting point that takes into account nuanced and deaveraged perspectives on the economic and operational stability of the markets in which they operate—as well as on their own organizations’ financial strength (e.g., profit volatility, free cash flow to debt ratio) ultimately falling into four high-level starting-point archetypes And second, they embed a “dynamic strategy” mindset into their planning, comprising three elements:
• Sensing: Observing trends, defining and monitoring critical uncertainties, and outlining a set of scenarios against which to assess business decisions
• Adapting: Building operational and financial stability by shaping and reshaping strategies based on market trends and data driven forecasts
• Thriving: Moving rapidly from assessment to action to seize growth opportunities and strengthen competitive advantage
3 key actions to respond to uncertainty and transform for resilience
- Understand the need for change based on current economic uncertainty and internal factors
- Act immediately while starting an assessment to shape the transformation
- Plan a transformation with a focus on the HOW by addressing enablement, engagement, executional certainty, and culture and purpose.
Source : fExcepts from BCG article. Read the full article here
