What do you think is the one factor that’s had the biggest impact on your business in the last 5 years?
A bold vision?
Your brave business strategy?
How about your big Digital Transformation plan?
Oh, I know, it must be finding the mythical metrics and precise KPIs to manage performance—FINALLY!
What I’ve found in my work, and what 2020 has already highlighted in at least three groundshaking ways (COVID, economic crash, and the Black Lives Matter movement) is that these tools set our desired direction but it’s often other forces that dictate why we change.
What impacts our business more than anything else is how we respond to unforeseen events—circumstances we didn’t expect, much less anticipate or develop a plan for.
How do you handle new, unknown, fast-emerging situations that show up and change the game?
Companies can no longer afford to ignore this question. Events of this kind have been happening with increasing frequency in recent years, and we’ve now entered a whole new level and rate of exponential and uncertain change.
If you’re one of my regular readers, you’ll likely be familiar with Clay Christensen’s Theory of Disruption. It shows how a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors.
Most people have viewed the coronavirus pandemic as a disruption. It’s not. It’s an accelerant.
What is being disrupted is our mindset and behavior—COVID is prompting uncomfortable changes in our habitual ways of working.
We’ve accelerated 10 years in terms of digitally distributed work in the last 10 weeks.
Our situation globally is uncertain, with many unknowns about what might happen next.
We are all in it together, learning as we go. Some are taking small steps into the uncertainty—learning, unlearning, and relearning as they go. Those falling behind have frozen, unsure what to do.
So what is certain? That there’s an increased need to respond to changing circumstances and uncertainty. You cannot wait and see—you need to act. You need a systematic approach to explore uncertainty safely.
How well you learn your way through crisis and unknowns dictates your results. Resilience in business, behavior, and mindset is core to success.
If you can build this muscle, you can be in better shape no matter what the world throws at you.
The Acceleration of the Uncertainty Economy
For businesses, 2020 is accelerating the shift of power and wealth to those that have created a platform to rapidly understand how their business is operating in the changing environment.
They can observe in real time what emerging behaviors their customers are exhibiting and synthesize all that information to recalibrate, refocus, and execute.
The S&P500 rise is due to the top-10 technology companies hitting record highs while the price of oil dropped to near $0. Amazon, Apple, Alphabet, and their ilk are accelerating exponentially while others are becoming extinct.
Most people have viewed the coronavirus pandemic as a disruption. It’s not. It’s an accelerant
The reason these organizations are doing so well is that they have a systematic approach to exploring uncertainty safely. Their business systems and platforms are designed to:
- gather vast amounts of data
- hypothesize and simulate potential scenarios
- run small experiments to see if their hypotheses are correct or not, and
- iterate to success
That’s a powerful mechanism that provides early warnings about changes in customer behavior, letting them spot trends—both positive and negative—before anyone else. Then they have choices about how they want to respond.
Amazon, Alphabet, and Microsoft also own 56% of the cloud computing information highways, collecting our tolls to keep us connected in a digitally distributed world of work.
It’s both a tax and a payback for doubling down on technology as a strategic capability of their (and others’) businesses.
Why Traditionally Run Companies are Losing
Companies that are struggling have weak signals, poor feedback loops, and insufficient capability to respond to changing circumstances. Technology in many traditional companies is still seen as a cost center to reduce rather than a growth engine to be invested in.
Many such organizations are not only struggling, they’re folding.
Scott Emmons, the former head of Neiman Marcus’ innovation lab, left the business in January, 2019, stating “Today’s retail corporations make meaningful innovation almost impossible.” Meanwhile, Hertz paid $32 million to Accenture for a website—THAT DIDN’T WORK! These companies stunted the growth of any seeds of change before they ever had a chance to sprout, let alone develop.
They never build systems to adapt. Instead, they built organizations to execute by forcing people to do what they’re told, not giving teams agency to think, act, and solve actual problems.
So what of the current survivors? Many still don’t know what to think, let alone what to do. None of their plans or strategies will save them. Fear of uncertainty and inability to adapt leads to further stagnation.
They need to start investing in their technology as a strategic capability—to gather, analyze, and use data to inform their decision-making and action. All while facing their fear and tackling uncertainty by taking small steps forward into the unknown.
The Values Side of Facing Uncertainty
But wait, there’s more! Having great technological capabilities to adapt to market changes is only half of the solution.
There’s also the human side, pairing your business capabilities with your business values. Technology is advancing in some respects beyond the development of values, but ultimately, it’s your values that your customers will align to… or turn away from.
In a crisis, it can seem like the hardest time to lean into and live your values, but it’s also the most important time to do so
The technology acceleration story is trending towards artificial intelligence. In many ways, our technical capabilities are going to keep accelerating. We’ll have the ability to capture more and more data from people for analysts to understand (and potentially predict) individuals’ behavior better than they themselves do.
Values become extremely important in that world. Because if you have this kind of power in unethical hands, it becomes a very destructive weapon.
Facebook is a great example—they can identify that people are posting divisive or hate-incising messages. And they’re making a deliberate choice not to flag or delete them.
Mark Zuckerberg argues that free speech is their primary value. But then he has to deal with the repercussions of how people are interpreting that choice, including his own shareholders who feel he has too much individual control over the company’s policies.
It’s one of the reasons we’re seeing a backlash against Facebook. Companies like Ford, Adidas, and Denny’s have joined a large and growing list of companies and organizations pausing their ad spending. They are De-funding Facebook.
On the other hand, you’ve got Twitter, who recently put cautionary warnings on some of the US President’s tweets. They decided they had a measure of responsibility not to let their product be used to hurt people or restrict their rights. They also got a big response—both from those in favor and those offended, especially the President himself.
Another example of values in action—Zoom has a product that went from 10 to 200 million active users in under 12 weeks. Their platform has had fallacies and failures. With security issues in particular, they’ve really fallen short.
But CEO Eric Yuan has stood up and recognized those problems. He’s been explicit that they value the security of their customers, that they know they’re making mistakes, and that they’re actively working to respond with solutions.
They created a 90-day security plan, dedicating the resources needed to better identify, address, and fix issues proactively. That included an action to stop Facebook from collecting unnecessary device information from its users.
And they provided a high degree of transparency throughout this process. They want to live their values and demonstrate why their customers can trust them.
Every few days they’re responding with new changes to their platform, based on the issues people have found. It’s not perfect, but they’re strong and they’re striving for excellence, with transparency and ownership.
How Society Thrives in Uncertainty
In addition to thinking about what companies need to do, I also want to address our choices and responsibilities as individuals. We all need to continuously consider these issues in our own lives if we hope to direct the rapid changes afoot toward positive outcomes for our world.
We must understand that companies have phenomenal capabilities, but those capabilities are paired with values. Do you know what your values are? Do you know the values of the companies you interact with?
It’s easy when everything is aligned and working in your favor. But when they’re making choices you don’t agree with, what are you doing about it, if anything? Are you going to let it slide, or are you going to take action? I would say that now, more than ever, it’s important to be active.
What specific actions you take have to be personal. In my case, I’ve sold my Facebook stock. And in consideration of the Black Lives Matter movement since the murder of George Floyd, I’ve been working to get more diverse opinions represented in the people I follow on Twitter and the articles I like and share.
I’ve also been picking books from reading lists around anti-racism and trying to read a chapter each day. I’ve also been hosting reading and study groups with other majority white friends to discuss what hard, uncomfortable steps we need to take to create a more equitable environment for all.
These are small steps, but if we all take small actions in alignment with our values, the collective impact will steer the ship in a direction we might actually like it to go.
What Will You Do?
What does this moment mean for you, your business, and its future?
Personally, I hold an optimistic perspective for the future. I’ve been encouraged by people on the street protesting out of a desire to champion social justice for all.
We all must become active in the future we wish to create. That means seeing uncertainty as an opportunity to shape that future.
To do nothing is to fail. It’s not the time to stop, stall, and be silent.
Think big about what possibilities are ahead, and start small. One small, safe-to-fail step at a time to get comfortable with the uncomfortable changes required. Learn fast, grow, and develop for a better future for all.
COVID is one of many challenges we need to tackle. COVID is not a disruption, It’s an accelerant—so the sooner we start building the muscle to adapt to challenging and changing circumstances, the sooner we can start tackling the other great global goals ahead.