Spring into Action: Two Initial Steps to Avoid the Penalty for Waiting-out Uncertainty

By: Gunter Wessels and Sam O’Rear

Federal Fiscal Year 2013 is happening on October 1, this year. In the absence of a budget and the political gerrymandering going on, people are hiding in the closet with all their toys. The need for focused actionnow is imperative.  Waiting for a greater level of certainty will undoubtedly result in disappointment; further uncertainty will remain, and business performance will suffer.

How should business managers proceed? Here are two things you can do now to build a foundation for growth and positive market performance today:

1. Understand the Situation
   

   In contrast to what the 24-hour news cycle may suggest, changes that affect global markets, national industries and your local economy take years to form, and governmental reforms take years to implement. Large changes like health reform, financial regulation and others have been debated and implemented for years.Similarly, economic trends affect business on a local and national level over many quarters or years. This rather glacial pace of change has accelerated somewhat recently. For example, the effects of the financial crisis and government’s increased appetite for reform are relatively recent, i.e 2008 till now. However, the changes affecting the current business cycle were created to solve a problem we already understand, and have already experienced. Consequently, the manager can effectively plan if he or she understands the basic concept and issue being regulated and the ensuing regulations and rules will not be a surprise.The prevailing wisdom in dealing with rapid industry changes suggests that assessment and action should be based on a medium term time horizon, i.e. 12-24 months. This forces managers to shorten the normal 60 month planning cycle and consider changes to be twice as rapid as before. Current plans require review by considering how customers and competitors are acting over this recent medium term, and how governments are enforcing laws over the same timeframe.To augment your own observations, industry experts, think-tanks, policy digests, and other resources can help clarify the picture. You may notice the forecasts made two years ago are remarkably accurate, even today. Remember, as you consider your situation, chances are you’re already aware of what you need to know, but you may have renewed insights based on the intervening time. Revisiting your plans and updating them with a developed understanding about the likely implications and needed actions is appropriate in this context. Uncertainty will remain, but the question is about acceleration or velocity of change, not the kind of change you need to manage.

2. Renew Your Mission
   

   The mission of your business, and what you stand for as an enterprise defines the purpose for your actions and your plans. Your mission roots you as a meaningful contributor to your business ecosystem. If the environment is changing in a way that places the relevance of the business in jeopardy, it should be revisited.There are a few conditions that cause organizations to renew their missions:

• First, if your core competence and capabilities have expanded or contracted, the mission needs to evolve. For example, innovation and the ability to solve new and important problems reflects an expansion requirement for the mission. Alternately if you have lost key personnel, or a core technical edge, the mission should be modified to compensate for the loss.
• Second, if your core customers have experienced some fundamental change or are being better served by a substitute, your relevance is affected. For example, the impact of digital technologies in imaging and document management have affected the business of paper forms and printing. If your business core was focused on things that less and less people are using, it is time to revisit the mission.
• Third, if your competitors have succeeded in redefining the competitive landscape, by devaluing the core business you thrive on, or changed the business model to a form that is outside your capabilities it is time to adapt and respond.

Observed best practices have shown that leading organizations frequently review their missions and adapt, revise, innovate, and focus their mission. By examining their core competency and finding ways to keep it fresh and relevant, they continue to surpass their competitors to deliver value to their constituents.