Leading in Today’s Ever-Changing Business Environment
Business leaders across the globe are experiencing a challenging, and at the same time, exciting phase of their careers. Challenging because of the ever-changing business environment in which we work, and exciting because with change comes an opportunity to innovate and learn through experience. Through our work with clients, we see that to excel in today’s dynamic global business climate, leaders must to approach their roles differently, particularly in these three areas.
Adapt strategy to stay relevant: Customer and stakeholder needs have changed with shifts in the market. Therefore, it is vital that business leaders review strategic choices through the lens of “relevance” to their clients and markets. Choices that have been made in the past may not be completely relevant in today’s environment. Leaders should be prepared to evolve their strategy in ways that build relevance with customers. For example, an adjustment may be needed if a new market entrant is attracting your organization’s traditional customers.
Take a balanced approach to the fundamentals: Leaders need to make balanced decisions and understand trade-offs, optimizing costs without going too far. They should avoid kneejerk and haphazard actions, which can negatively affect an organization’s value proposition and employee morale in the long term. It’s critical to focus efforts and have clarity on where your firm should be in the market and also what opportunities you will not pursue. Bringing this discipline and alignment will help protect profitability in a more balanced way. The balance of growth and profits, value and cost is important to maintain from a long-term perspective. Assign goals and give guidance to your employees to lead a longer-term balanced view on profitability.
Communicate for strength: With so much change and ambiguity, it is natural for stakeholders and employees to sometimes feel concerned. But lack of communication during such times can easily lead to lack of trust, giving way to unwanted negative rumors and poor engagement among employees. We believe business leaders should foster an open dialogue across the organization. Important steps include:
- Acknowledge business changes, and challenges, with all employees
- Share steps the organization is taking to deal with challenges—including how the strategy is adapting over time.
- Ask for support and ideas—make sure the communication goes in both directions.
Following these steps can help leaders maintain confidence and drive collective ownership within the organization. In addition, the mood, tone, and body language of business leaders have a strong impact on organization’s energy. One of the best ways to restore confidence is to feel confident yourself.
Implications for Leadership Capabilities
Leadership development increasingly is viewed as a strategic lever for organizations. In a global 2013 study conducted by Harvard Business Publishing, 43 percent of the more than 400 talent development professionals surveyed said that the most significant goal for leadership development is to drive business transformation. If business leaders are to achieve in the three areas outlined above—to help their organizations transform and succeed over time—they must develop these core capabilities:
- Strategy: Understand that strategy is not just a deliberate choice anymore but that it emerges and evolves based on changing business realities. Strategic decisions should be based on real-time customer input.
- Adapting and refining business models: This is the ability to fine-tune company’s business model to stay relevant and includes making incremental changes in customer value proposition, the company’s profit formula, and the value chain.
- Disruptive innovation: Look for un-served/underserved market segments and identify quick innovation opportunities that are in alignment with the company’s strategy.
- Leading proactive change: This is the ability to lead change agendas through consistent, transparent communication and a clear vision or roadmap.
- A strong leadership mindset: Leaders in these fast-changing times need to more quickly embrace their new leadership roles—truly thinking of themselves and behaving as leaders, which is a more time-consuming and challenging transformation than learning discrete skills.
To be successful in today’s dynamic business environment, leaders must work toward building relevance; managing business fundamentals with a balanced approach; and guiding employees through open, two-way communication. Those leaders who leverage opportunities to adapt, innovate, and learn can make ever-changing times invigorating and advantageous for themselves, their employees, and their organizations.
Vivek Chachra is Country Manager – India, Harvard Business Publishing. For more information, visit http://www.harvardbusiness.org.