4 Strategies Leaders Can Use to Adapt to Change
Here’s why the best teams are adequately prepared to make high-stakes decisions in critical moments.
By Chris Mailander
Each year, CEOs and their teams build well-crafted strategies for attaining new heights of performance. However, throughout the year many of these game plans will be forced to change—they will be scrapped and new ones will be built to quickly take their place.
The coronavirus pandemic, for example, led many consumers to reduce their spending out of fear for what might come next. For CEOs stewarding their strategies ahead, everything had to change.
Then, a period of high inflation led the Federal Reserve to hike interest rates to cool the economy. Leaders had to adapt once more.
In these moments, many management teams scramble. In my 30 years of advising corporations, financial institutions, and governments around the world, I have learned that what separates the winners from the losers is whether a team is adequately prepared to make high-stakes decisions in critical moments.
I believe leaders should spend less time hand-wringing about which risk is most likely to pop up in the year ahead and more time preparing for how they and their team will make decisions when the situational context shifts in unforeseen ways. In fact, the savviest CEOs know that surprises can actually create phenomenal opportunities, and moments of change create chances to outcompete their peers.
According to a recent McKinsey & Co. report, “companies with capabilities in both adaptability and resilience are better able than others to absorb shocks and turn them into opportunities for capturing sustainable, inclusive growth.”
In my experience, there are four strategies successful leaders use to adapt to change—and even use change to their advantage.
ANTICIPATE ADVANTAGE
Not all crises are bad. Most people, cognitively and emotionally, go into a protective mode when they sense change, and their survival instincts kick in. Many of us seek shelter during times of change. However, successful leaders refine their ability to decode shifting conditions well and anticipate any advantages that may arise from these shifts.
PRECONDITION THE TEAM
Operational teams run smoothly, build routines, and focus on efficiency. As a result, they are often wired to resist change to the rhythms of their business engines once they get them humming. However, corporate leaders need to precondition their teams to understand that changing conditions create phenomenal opportunities. By preparing their teams to be excited for change, they will be more likely to know what to look for when trying to anticipate advantages.
CONSIDER SHORT-TERM AND LONG-TERM GOALS
The best CEOs manage two clocks simultaneously: The “game clock” and the “play clock.” The game clock is set to their long-term strategic and financial goals, such as increased sales or margins by the end of 2024. The play clock maps to their ability to manage the short-term crisis or change conditions. Many leaders lose sight of their long-term goals when faced with short-term or immediate problems that must be managed, but when both are prioritized, leaders can better focus on what matters most at a given moment in time.
PREPARE FINANCIALLY
Many companies can’t take advantage of competitive shifts in the market because they don’t have their capital structure ready to meet the moment—for instance, because they have inadequate reserves or they carry too much leverage. If an organization’s P&L and balance sheets are not primed for the moment ahead, an opportunity is created for their competitors to capitalize on the event instead.
Leaders who are prepared to lean into change are more likely to be successful, and the returns can be extraordinary.