In a state of ‘Permacrisis’, organisations need to speed up decision-making to pilot through a fluid future, and empower teams closer to the customer to make the call
Navigating a future without a past
One of the most interesting leadership challenges is that this future has no past. The pandemic is a once-in-a-century event, Permacrisis is also a first-of-its-kind convergence of several crisis – each feeding the other. There is no template from the past to follow to navigate the future. The data analytics field faces a complicated problem: how to use past data, and predict future behaviour, in the face of uncertainty.
This led to forward-thinking companies to work with small data, or good enough data from yesterday to make shorter term predictions. They side-lined predictive analytics programs and pivoted back toward simple descriptive analytics – good data about the present and recent past that is quickly available. They also started using external data, like from firms like BlueDot and satellite image analysis from Maxar and Marine Traffic. It is important to find out what’s happening with suppliers and their suppliers, and so on.
The financial services sector turned to alternative data or non-traditional data sets to guide investment strategy. Alternative datasets include credit card transaction data, mobile device data, IoT sensor data, satellite imagery, social media sentiment, product reviews, weather data, web traffic, app usage and ESG (environmental, social, and corporate governance) data. Some alternative data providers also track corporate jet flights, and government contracts.
RS Metrics, a company specialising in geospatial ESG analytics, used three years’ worth of satellite data to validate Walmart founder Sam Walton’s long-held belief that the number of cars in stores’ parking lots correlated to overall revenue. Car companies have been looking at smog levels in certain cities as an indicator of how much driving is taking place – with more smog meaning more driving, and a hint that activity is returning to normal, and people might be buying cars again.
Empowering teams; speeding up decisions
Piloting through a fluid future will mean organisations to speed up decision-making, and empower teams closer to the customer to make the call. For big-bet decisions, it may be useful for companies to establish a nerve centre or a decision-making body comprising a subset of senior leaders or key stakeholders who can respond to events in real time, using real-world data. This team would report back to the CEO and others in senior management frequently to ensure alignment, but it would be empowered to act quickly on daily decisions.
The actual work of the organisation should be carried out by teams that, when faced with new and imperfect information, feel motivated and empowered to act. To cultivate organisational resilience and to ensure adaptability, companies must think differently about how teams are structured and managed, as well as how they’re connected across the organisation. What’s more, companies will need to provide support systems that allow employees to engage in creative collisions and debates, give and share feedback honestly, and continually incorporate that feedback into their routines so they will be better able to adapt to any future challenges.
Riding the next S-curve
What kind of a world are we going to face in the future? New and exciting technologies, such as applied AI, bio-engineering, and immersive-reality technologies, are attracting tens and hundreds of billions of dollars of annual investment. These technologies may counteract the slowdown forecast. For example, developments in quantum computing may spur the next big S-curve of development. AI innovation, as measured by AI-based patent applications, grew at a rate of more than 75 percent a year between 2015 and 2022. Accelerating the pre-existing trend, the pandemic propelled even faster adoption of AI and automation. These are other new tools available to forecast the future – from geospatial, satellite, or small data analytics will aid the Changer Makers to navigate a future in constant and often violent motion.
The tool-kit for leaders navigating the fog of uncertainty:Create an agile and adaptable organisation through:
- data-driven-decision making culture to make good-enough decisions; using small data when there is no historic past to the present.
- delegating to empower teams to drive operations. n build self-sufficient teams that, whenheld accountable and given ownership of outcomes, feel empowered to carry out strategicplans and stay close to customers.
- finding and promote adaptable leaders who don’t just react but are proactive and self-motivated.
- providing support systems that allow employees to engage in creative collisions and debates, give and share feedback honestly, and continually incorporate that feedback into their work.
- cultivating a resilience response to emphasize psychological safety (or the idea that taking some risks can be OK) and continuous learning.
Lessons to win in a Permacrisis
- Look for new opportunities. There is always an opportunity hidden in a crisis. If the recession is located in one specific country or one geographic area, consider expanding to new territory. If your target audience is suffering, change your offers or find a new audience. If there’s something wrong with your company model, don’t be afraid to reinvent yourself.
- Help those in need. Both consumers and businesses struggle in an economic recession, so find a way to serve those sufferers specifically, with lower prices or new opportunities they can leverage to make it through.
- Present an alternative. In a recession, people will make hard choices about what to cut out of their lives. If you can give them a more cost-efficient alternative to what they’re cutting out, you’ll stand to win big!
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