2020-21 . . . Wait, What?
V.U.C.A.
In 1987, Warren Bennis coined a term for the U.S. Army War College that later became a rallying cry for all strategic business planners. He said that in military conflicts, strategies must be chosen and implemented in a V.U.C.A. atmosphere: Volatile, Uncertain, Complex, and Ambiguous. He then went on to prescribe strategies that different military units might deploy in that V.U.C.A. environment. Well, when we look back at 2020 (and already into 2021), we can plainly see the world is V.U.C.A. Just add these up: Covid-19, political volatility, social and civil unrest, and economic calamity. Quite the formula, wouldn’t you agree? For many top leaders, it is not an exaggeration to say that 2020-2021 knocked them off their feet. Entire supply chains were interrupted. The customers of your customers have been so affected that you are unsure how to proceed, strategically. Every aspect of your business has been hit – marketing, sales, customer relationship management, operations, production, finance, accounting, technology, culture, leadership development, and more.
Getting Back Up
At Kraus-Anderson Risk Innovation, we think it’s time for many organizations, to stand up, dust off, and reimagine their business. This three-part series is devoted to those of you who want to do that but are unsure how. You know you want your leadership team to assess your strategic situation today and conduct market intelligence on the future of your core markets and customers. You know your leaders may not be as connected as they were in February of 2020. You know your strategic business plan from 2020 is now in question, if not entirely obsolete. You know you face continued pressures to innovate and that a New Normal has settled into place in which continual innovation is now the expectation. It feels like five years of change got squished into one minute, right? To get back up requires that the top leaders acknowledge the V.U.C.A. nature of 2020-2021. They key to getting back up, as an entire organization, is to accept that 2020-2021 happened and you survived as an organization. You reacted. You responded. You adapted. And, you prevailed. Now, it’s time to dust off and ask the so-called $64,000 question (from the 70’s game show by the same name): Where do we go now?
List the Ways; Take Inventory
One of the most important steps you can perform now – before reimagining your organization – is to inventory what changed in your company in 2020 and so far in 2021. At Kraus-Anderson Risk Innovation, we call this Your Change Mandate. What we mean, is that every company in the world right now is facing some sort of Change Mandate. Think of it is a requirement to change – in some way. Some employers ultimately benefitted greatly from the confluence of conditions in 2020-2021. Others were only affected marginally. Still others were hammered. But in most cases, top leaders need urgently need to take a clear inventory of exactly what has changed, and why. An example will help.
Suppose you own and lead a privately-held electrical contracting company. Most of your work is commercial and institutional work, not single-family homes. Let’s imagine your successful, 75-year-old company is in its third generation of top leadership. “Tom’s Acme Electrical” has an excellent safety record, a culture of stability, and above-average financial performance. But in 2020-2021, the pipeline of pending work dropped from 11 months of backlog to 7 months of backlog. It is looking worse for 2022. This is because the marketplace and your customer base have come to an abrupt halt. The contractors and other customers you serve have put everything on hold. Only the small special projects electrical jobs are getting done. You are looking at a 20% reduction in force if you cannot somehow reposition Tom’s Acme Electrical for new markets and new services in the New Normal.
For the fictional company I have just described, your leadership team needs to inventory – now – exactly how the company has changed from 2019 to 2021 in three areas:
- Marketing, sales, customer relationships, estimating, and preconstruction
- Project management, field operations, fleet, equipment, and safety
- Culture, morale, internal communications, work-from-home, leadership development, and succession
When this inventory is done, you should have a list of at least eight specific and measurable ways in which your company is now nothing like it was in 2019. When you are done developing that list, your leadership team should review it in a two-hour meeting JUST for that purpose. After talking it over, list the top five ways in which Tom’s Acme Electrical has fundamentally changed. When you are done, label it, “Our Change Mandate”.
Next in This Series In the next installment, we will examine how to pivot from your Change Mandate to your Emerging New Vision for 2025. Successful companies in 2020-2021 all recognize one major truth about V.U.C.A. environments: there will be winners and losers. The winning companies will do more than understand their Change Mandate. They will co-create a New Vision for the future of their company. Learn more about that in the next chapter of this series.