Assessing Your Strategy During Times of Volatility

Assessing Your Strategy When the Future’s Uncertain
For most of us, the current pandemic came almost without warning. We were unprepared for its impact on our health, our economy, and our way of life. Though the future is still uncertain, you must find a way of assessing your strategy during times of volatility.

In the business world, the growth strategies leaders had in place before Covid-19 struck were, for the most part, working well.  Then with a global health crisis, border shutdowns, and quarantines, everything changed.

Those that Are Struggling

• Over 20% of the US labor force has filed for unemployment since mid-March and some believe that many of those jobs may never come back.
• Restaurants, bars, offices, and gyms are largely empty as millions of Americans shelter in place.
• Golds Gym, Hertz Rental Car, JCPenney, J.Crew, Neiman Marcus, Pier 1, and Virgin Australia have all declared bankruptcy.

Those that Are Thriving
During this disruption, as it is with most change, some companies are thriving thanks to dramatic shifts in consumer behavior.

• Video Game Companies like Activision Blizzard, Electronic Arts, and Nintendo have grown sales and profits 21%, 12%, and 41%.
• Sales at Clorox’s cleaning segment have increased 32%, revenue at Peloton has grown 66%, same store grocery sales at Kroger have surged 30%, and Zoom’s stock is up 120%.

Some say that Zoom and Peloton just happened to be lucky to have businesses that were already set up to benefit from the disruption caused by COVID-19.  But their competitors like Skype and Bowflex have not fared as well within the same environment.

What Separates One Company’s Success from Another’s Failure?
An executive team’s ability to discuss and prepare “what if” scenarios often makes the difference between high and low performance.  If you have not already, it is time to consider the range of possible situations that can help or hurt your business. You need tips on assessing your strategy during times of volatility.

4 Tips on Better Future Planning
There are no guarantees in life or in business. But the better you plan for contingencies, the better prepared you and your business will be to face them with an approach that maximizes opportunities and mitigates risks. Here are four tips on how to create strategic clarity for the unknown:

1. Scan for Future Trends to Identify and Prioritize the Possibilities
   Consider what could happen that would directly affect your organization, your industry, your customers, and, finally, the general environment including social, economic, and political forces. The list will be long – uncertainties around how your workforce might evolve, how customers’ needs might change, and how macro trends could change your course.

   Leadership’s job is to prioritize the possibilities into the top five most plausible and meaningful scenarios – any more than that and the task becomes too overwhelming.

2. Generate Strategies for Each Situation
   Gather your best thinkers in cross-functional teams to develop strategies for each scenario. Start from the end and work backwards asking such questions as: What were the signals? What were the triggers?

   Once you imagine the scenario and what brought it about, you are better able to craft a strategy to be deployed should the scenario occur. The good news is that by simply imagining a situation, organizations are much better equipped psychologically to deal with it when it occurs.

3. Create Strategic Options
   Examine each strategy to look for moves that would allow the most options for action. This gives you the flexibility to act early as a scenario develops because it gives you multiple and efficient ways to operate as future triggers happen.
4. Continuously Observe and Adjust
   Companies that have built an externally focused culture where leaders continuously scan for future trends, evaluate the path ahead, and adopt an open mindset of communication and collaboration are companies that prepare for the unknown. Strategic planning is not “one and done.” Strategy requires regular adjustments to keep on track.

The Bottom Line
Challenges inspire coping mechanisms. Are you as a leader doing all you can to inoculate your business against current and future threats?

To learn more about assessing your strategy during times of volatility, download 7 Proven Ways to Stress Test Your Strategy