‘How to lead businesses through turbulent times’
The immediate past President, Port Harcourt Chamber of Commerce and Industry DR. EMI MEMBERE-OTAJI, in a parting gift to the body, assesses how operators in different sectors can wade through economic turbulence to make a success of their enterprise. Excerpts:
What is turbulence in business?
Turbulence in business, which is characterised by sudden, significant and cascading changes in today’s world does not recognise or respect the organisation’s status in the industry. Its effects are noticed irrespective of the business’s strategic plan, managerial experience or brand recognition.
Business environment: Today, organisations (both private and public sectors) operate in an increasingly volatile, uncertain, complex, and ambiguous (VUCA), business environment.This often leads to irrational demands, and leaders have to face strong and relentless oppositions to survival that could escalate the conflicts toward a downward spin.
Types of turbulence
A cursory look at the types of turbulence in business reveals two critical factors, the internal or external factors. The external aspects could be in form of force majeure, such as natural disasters, willful sabotage, acts of war or terrorism. Others in this category of external factors include insecurity, government policies (actions and inactions including policy flip flops), fiscal and monetary instability and product/service disruption from competitors.On the flip side is turbulence from internal factors including fraud, failures in leadership or strategy, or product/services issues.
An organisation’s ability to survive turbulence is not necessarily to create stability but the ability to learn fast, adapt and respond to changes and uncertainties thus always adding value no matter what comes along. Always wearing the thinking cap, businesses should be in proactive not reactive moods. Bill Gates puts it succinctly that “success today requires the agility and drive to constantly rethink, re-invigorate, react and re-invent.”
Furthermore on business survival, building the culture of agility is key to organisational survival. Agile leaders and organisations see turbulence or change as an opportunity not a threat; always proffering solutions when firms face head winds.
Instances of business turbulence
A few instances of turbulence experienced globally and in Nigeria should press home the points: The invention of cell phones with cameras was a big blow to the survival of camera manufacturers like Kodak. Commencement of Uber services has severely disrupted taxi business in some cities.
The advent of online shopping has challenged the survival of the conventional bricks and mortar shopping halls in some countries.
In Nigeria, government’s opening of the nation’s borders and policy flip flops from the 90s saw to the collapse of most manufacturing concerns like the textile industry, etc.
Insecurity including kidnapping, militancy, etc. have severely affected businesses in some key Niger Delta cities since the late 2000s. With the resultant relocation, outright closure or mere survival of some businesses leading to some, once bustling industrial areas and prime residential properties now empty.
Insecurity from ethno-religious crisis around the Plateau killed tourism business around Jos the capital city and other neighboring towns decades ago. Insecurity in the North East from Boko Haram attacks had killed many businesses in the area. The recent herdsmen farmers’ clashes in Nigeria are obvious threatening agro-business around the North Central states.
In 2016, from a combination of fall in crude oil price, tightening of foreign exchange controls and certain actions and inactions of government, Nigeria went into economic recession with many businesses’ ability to survive severely challenged. Many never recovered even with the country’s GDP, now in the positive territory.
As business leaders with thorough understanding of the complexities, disruptions and turbulence our organisations are facing, it is pertinent to ponder on some issues:
Is the level of agility in the organisation high enough to surmount business turbulence, to ensure increase in performance and growth?
Is the leadership team poised and wired to articulate and exert agility in the organisation?
Does the organisation’s leadership serve as effective role models for personal resilience and creating agility work environment for others to follow?
What is agility?
According to McKinsey: “Agility is the ability of an organization to renew itself, adapt, change quickly, and succeed in a rapidly changing, ambiguous, turbulent environment.”Professor Michael Wade (IMD Business School) once explained: “The key elements for success today are not plans and aspirations, but agility and capabilities.
Capabilities (or access to capabilities) are required to compete effectively in a given position, and agility is required to make shifts in that position in response to a changing environment.”
In order to survive and succeed in turbulent times, businesses should address two critical factors such as: Organisational capabilities include to fully access and acknowledge the facts and reality; improve client and employee relationship management; be responsive and agile; employ efficient cost control measures for short term sustenance, and long term viability.
Re-visit the strategic plan, and product/service innovations to be put in place. Others are to execute well and make quality a key ingredient to the business growth; exploit existing capabilities and explore new business opportunities and new markets, customers, products, and potential disruptions etc. In essence the organisation should be ambidextrous.
Leaders Personal Capabilities – Exhibit transformational leadership, be visible, rebuild purpose (reaffirm the vision and strategy for the business, set realistic short term goals and be clear and concise about what needs to be done).
In summary, in instances of high turbulence, survival cannot and should not be taken for granted as good leadership is about making hard choices, doing the unexpected and sometimes the seemingly impossible, even in the face of opposition.
In an environment of high turbulence, emotional resilience and “espirit de corps” are critical among the leadership team, and when you cannot anticipate everything (or even anything) you should trust your instincts or gut feelings, stick to your beliefs and stand by your values.
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