Any thoughts that we were moving away from a period of high risk and uncertainty in UK business vanished once it became clear that the snap election had delivered the UK a hung parliament. The existing uncertainty around Brexit and the economy in general has undoubtedly increased.
Furthermore, the current causes of high risk and uncertainty are not only political. Technology is also having a major impact on businesses whether through new entrants’ lean technologically-driven business models; growing online retail sales; opportunities provided by Big Data and artificial intelligence or the threats from cyber attacks. In addition, trust in business has not fully recovered since the financial crisis and with 24/7 communications, including social media, reputational damage following a crisis is likely to be more swift and potentially more severe than in years past. BA will attest to that.
In this febrile new world, it is tempting to just batten down the hatches, focus on the short term and seek to keep as much flexibility as possible through, for example, zero hours contracts. This, however, is unlikely to yield ongoing results and will give the impression of a fair-weather sailor caught in the eye of an ocean storm. With the same likely results.
Businesses committed to sustainable success for the benefit of all their stakeholders and wider society will instead aim to manage this apparent paradox and to be both long-term and short-term, practical and inspiring, risk focused and entrepreneurial. Periods of high risk and uncertainty conversely bring added opportunities: the skill is to seize the right ones whilst envisioning alternative futures through, for example, scenario planning so as to be ready for a significantly changed business environment.
An inspiring purpose and good long-term direction carefully aligned to a healthy culture and genuinely lived out values will provide the solid foundations for building a highly capable team. It will combine a long-term focus with the fleetness of foot to respond effectively to situations as they arise while their commitment to the business and its goals will sustain them in the challenging times.
Achieving the above will require a highly engaged and diverse board, both challenging and supportive of the executive team, with capable individuals in key roles and a strong team ethos. In tough times, setting the right tone from the top counts more than ever. Is your board ready?
This is one of two blogs. In our next blog, we will consider some of the key areas that contribute to long-term success and help promote resilience, providing you with a quick ‘health check’ to ensure you board is fighting fit for the future.