[October 28, 2021] CEO Roundtable Discussion Summary

Leading in Volatile Times

Volatile times amplify results of performance. The practices of the most successful leaders I know lead to outstanding results that separate the businesses they lead from the rest during times of volatility, whereas anything less, not so much even though in volatile times results somehow might have been acceptable.

Below, I discuss four principles for leading during volatile times if you want to come out on top.

1. You must be bold with your superiors if you want your staff to be bold with you.

It is unrealistic to expect your staff to be bold with you if you are not bold yourself with your own superiors. Staff imitate what you do more than listen to what you say.

A CEO client of mine asked me to comment on a Japan strategy presentation he was preparing for executives in the Asia regional HQ. He wanted his presentation to be bold, have impact, and to persuade others of his thinking.

I stopped him after the first few minutes of presenting to me and told him his presentation is really lackluster. It resembled nothing like the private conversations we had had.

“Remind me, what is it that want to achieve in Japan?” I asked.

“We are underperforming in the market. Our revenues should be at least three times higher than they are. I want to change that. I think we ought to be able to do that within three years,” he said.

“So what is keeping you from saying that? You ought to say that right at the beginning.”

“If I say that, I will actually be expected to achieve it!”

I then reminded him that just the previous week he lambasted one of his sales directors during a rehearsal strategy presentation of the sales director’s division for doing exactly the same thing — avoiding stating bold objectives he knew the director had because the director’s fear of being held to account.

“Do you remember what you advised your director of sales?” I asked. “Now what do you think I am about to advise you?”

I didn’t need to say more. The CEO revised his presentation — for the better!

2. Always lead by default and manage only by exception

As leader, you ought to be developing a vision for the business to take it to the next level. You ought to innovate, guide the business, mentor your people, and disrupt your market by default.

Management ought to be exceptional when something exceptional happens. Below are some real examples of management by exception.

  1. One CEO lost his marketing director when she quit abruptly. He had to step in and manage marketing, or at least provide extra management support for remaining staff, while mentoring the best to step up their game.
  2. Another CEO discovered one incident of fraud in his company and suspected there were likely others. (There were.) He had to intervene in processes which were normally delegated to others.
  3. A different CEO had to deal with a major quality issue discovered by a key customer of which frontline staff were aware, but it was never reported up the line for the business to do something about it. The CEO had to talk with customers and frontline staff directly to understand exactly what was happening. He also had to determine whether there was a failure of process, practice, leadership, or a combination of these.

A CEO client of mine told me how much of his time is taken up getting all of his senior executives aligned with the company’s new strategy, including a few who had been newly promoted to an executive role. For one of these new executives, he had set aside two hours for a meeting to “get alignment on the company’s strategy.”

“What on earth do you plan to discuss during those two hours?” I asked.

“I need to explain the strategy to him. Tell him the rationale. Make sure he buys in, and tell him what he will need to change in terms of which customers to prioritize, how his team needs to sell, and how he should be marketing our business. Then I need to make sure he understands all this.

“That will likely take two hours, and even then it might not be enough!” the CEO explained.

I paused before I told him, “It is not for you to tell your sales director what the strategy for his division should be. It is for him to tell you. That is what you pay him for. Your meeting should take no more than twenty minutes. Just review objectives, let him ask questions, and then schedule to meet later on to discuss his ideas.”

It began to dawn on this CEO why he is so busy with meetings.

The CEO then said, “But I’m not sure this new sales director is capable of coming up with strategy for his division?”

“So what you are telling me is that you are not convinced he is qualified for the position into which you just promoted him? You won’t find out for sure until you give him a chance to do the job. Certainly don’t start off by doing his job for him, no matter how concerned you might be!”

Manage only by exception.

3. Innovate Aggressively

Leaders are paid to solve problems, not to make excuses, particularly during exceptionally volatile times!

One regional sales director I know blamed lack of sales results on Covid. Yet he wasn’t achieving great results before Covid either.

Two real excuses I have heard otherwise reasonable business managers make.

1. “The reason our business results are poor is because the economy is so good. There are lots of new entrants in the market on the low end that undercut us on price, and incumbents on the high-end who outdo us in reputation and awareness. We just cannot compete when the economy is doing so well.”

2. “The reason our business results are poor is because the economy is so poor. Companies just don’t have the budget, and are reluctant to invest. At the same time, on the low end competitors undercut us on price, and incumbents on the high-end who outdo us in reputation and awareness. We just cannot compete when the economy is doing so poorly.”

  1. The key to mitigating the impact of any kind of volatility is to increase your rate of innovation. 
    • Exchange volatility. The best way to mitigate risk of exchange volatility is to increase your rate of innovation. The standard financial hedges simply are not effective enough. Yet every time you put our a disruptive product or service, you reset value and price.
    • Market volatility during Covid. Among all my clients and the business that I know in Japan, the ones that have come out on top of the Covid crisis are the ones who innovated fast and aggressively, even though some ideas did not work. Some examples below.
      • Car dealerships reaching out proactively to all customers when people could not visit the showroom. Classic reversal — bring the car to the customer rather than bring the customer to the car.
      • Retail stores in the United States and Europe offering or expanding curbside or walkup pickup of orders placed remotely, such as Best Buy and Starbucks in the United States.
      • High-end restaurants immediately offering take outs and delivery, which became normal during the pandemic but unthinkable before.
      • Switching to solicited referrals as the primary source of business, which are the fastest way to generate new business with the highest close rate, particularly when when short-staffed during the pandemic, rather than responding to requests for proposals, which are labor-intensive, require long lead times, and have low rates of success.
  2. Innovation is not just about new products and new technologies. You can likely innovate all or some of the below, even when product development and technology is out of your purview, or requires too much lead time.
    • Selling methods
    • Ways of working
    • Packing and delivery
    • Ways of marketing
    • After-sales service
    • Ways of selling
    • Reconfigured offers for the right kind of customer
    • Corollary customers, markets, or industries
    • New applications of existing products or services
  3. There is no such thing as good or bad business conditions. All conditions are neutral. There are only approaches that work and that don’t.
    • Good only means the way you are doing things continues to work.
    • Bad only means the way you are doing things has stopped working.
    • The circumstance is never inherently good or bad.
  4. Make Your Own Personalized “VUCA”One highly successful CEO at the roundtable talked about his personalized VUCA. “VUCA”, an acronym first coined by a business school academic, stands for volatility, uncertainty, complexity, ambiguity. Academics and the media love the hype disempowerment in the world, a concept that is attractive to those who prefer to think there is nothing they can do themselves to improve their situation. This CEO however prefers empowering himself.For each letter in VUCA, he chose a term of self-empowerment and shared his inverted VUCA with the group. Later, I was having lunch with another CEO who told me he too had similarly created his own inverted VUCA. (I had no idea that the VUCA concept had such wide awareness, nor such a degree of rejection among the most successful!)Some of the alternative terms others and I came up with are below…

    V
    Vision
    Value
    Valor
    Victory
    Versatility
    Vigor
    Vibrance
    Virtue
    Viability
    Validity
    Visibility

    U
    Unity
    Uniqueness
    Unlimited
    Undaunted

    C
    Confidence
    Compassion
    Charisma
    Clarity
    Courage
    Cohesion
    Collaboration
    Creative
    Conciseness
    Cogence

    A
    Agility
    Action
    Ambition
    Abundance
    Authenticity

You can probably come up with even better terms! And why only stick with V, U, C, and A? There are plenty of other letters in the alphabet and myriad of terms to chose from!

Eschew any kind of victim mentality. Never buy into the disempowerment dictated by others.

Personalize you own “VUCA,” and share it with staff! In volatile times, it is a sense of control and self-empowerment that we all need.