Amid increasing geopolitical tensions, a global trade war, the rapid rise of new technologies such as AI, and a persistent worker shortage, strategic planning can feel like trying to wrestle an octopus into a mayonnaise jar.
You get your arms around one challenge only to discover that something new has wiggled out, popped up, or slithered away from your control as you’ve been focused elsewhere.
But even if it feels the only thing certain is uncertainty itself, chaos doesn’t have to dictate how you run your organization.
Here are four guidelines for strategic planning for unpredictable times.
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4 Guidelines for Strategic Planning During Chaotic Times
1. Don’t panic!
People almost never make good decisions when they are in panic mode. When events outside of your control shake your strategic plans, pause, check in with your people, and assess the situation calmly before you make any radical changes to existing plans.
Remember to be human first and a business leader second. Find out what bosses, colleagues, and team members need to do their jobs effectively and ask how they are coping with circumstances. Take care of yourself and your people, because you’ll need your own health and wellbeing and that of your team to function successfully on the other side of chaos.
2. Cultivate “sensemaking” skills
In a September 2020 article in the MIT Sloan Management Review, authors Deborah Ancona, Michele Williams, and Gisela Gerlach define “sensemaking” as “the ability to create and update maps of a complex environment in order to act more effectively in it.” In their view, sensemaking is the critical capability for leaders trying to manage through turbulent times.
But as Ancona, Williams, and Gerlach point out, sensemaking is often overlooked or ignored in a business environment where action is prized. Sensemaking requires curiosity, information gathering, and thoughtfulness. It might mean talking to workers in different functions or levels about challenges they’re facing or engaging with more customers about what they want or need to get through chaos.
Sensemaking requires more than a reactionary response to the news of the day. Instead, sensemaking places today’s concerns into a broader picture so that leaders can better navigate chaos and uncertainty. Like steering into a skid on winter ice, leaders with good sensemaking skills might come to counterintuitive decisions that look wrong in the middle of uncertainty but make sense on the other side of a challenge.
3. Do scenario-based planning
The organizations that came through the COVID-19 pandemic in the best condition tended to have one thing in common: scenario-based planning. Grocery chain H-E-B is a classic example of good scenario-based planning; for several years, the chain had a pandemic plan ready to execute. When government restrictions and supply chain crises struck, the chain was still able to serve its customers reliably.
The best time to do scenario-based planning is before a new crisis strikes, but there are still benefits to scenario-based planning during chaos. Turbulent times often reveal real looming risks on the horizon, allowing you and your team to consider how those risks could affect your business should they come to pass.
Take some time to think through possible disruptions, challenges, and opportunities. What could the loss of a major trading partner mean? Are there ways you can improve productivity using new technologies? Should you retool your factory to meet a potential need?
4. Balance caution and risk
Turbulent times can cause us to either shrink back and become overcautious or charge directly into the challenge without considering the long-term impact of our actions. Good strategic planning lies somewhere in the middle—even when chaos is all around.
Once you’ve assessed the challenges, gathered information, and looked at different scenarios, it might be time to take some risks for the long-term health of your organization.
In early 2008, as the global economy started to fall into recession, Starbucks faced challenges from both within and without the company. To right the ship, Howard Schultz returned to his position as CEO. He immediately embarked on a campaign to reconnect with customers and reign in an overly ambitious expansion effort in the US. The company shuttered several hundred stores and focused on both efficiency and social media engagement.
At the same time, in keeping with long-term goals, Starbucks opened new outlets in several new countries, including Argentina, Czech Republic, and Portugal. In addition, Schultz made the decision to take 10,000 store managers to New Orleans for a conference that started with a large community service project. Schultz was advised against the conference due to the cost, but in 2010, he credited the conference with turning the company around.
Eventually, the company cut $581 million in costs while reconnecting with customers and pursuing growth outside the US. Schultz effectively balanced caution and risk to turn Starbucks around, even in the middle of a global recession.
Navigating chaos as a business leader is rarely a linear process, and it’s possible you’ll have to make several shifts, turns, or even reversals in strategic planning as new information presents itself. Take some deep breaths, try to get a sense of the big picture, and then move forward in alignment with your long-term goals. When stability returns, your organization will be better positioned to achieve business results and people results.
The experts at Stewart Leadership can help you navigate a turbulent business environment and set up a strategic plan for long-term success. To learn more, contact us.
Self-Check:
- What is one way you can better encourage your team’s wellbeing during chaotic times?
- Is there one specific crisis you could see arising that you can plan for now? How can you start to address that possibility?
- What is one risk you could take to improve how your organization meets the challenges of the moment?
