Being ready for recession means asking your teams to think differently.
There’s an entire generation of leaders today who have never led through a recession. Now, faced with raging inflation, tumbling profits and volatile stock prices, they are flummoxed. While this is not another global pandemic, there are whispers in the wind that troubled times are coming. How can you help your teams work together in an agile way to prepare for whatever is next?
There are lessons to draw from winners post-COVID who seemed to nimbly navigate the last crisis, and those that lumbered and bumbled their way through.
Among the losers were those that didn’t just get it a little wrong – they doubled down on a single bet. They kept rolling the dice at the same table despite the odds that their “luck” could run out.
- Peloton produced more bikes than people wanted and were left peddling in the wind with quality issues and a saturated market for their product.
- Bed Bath and Beyond bet on branded goods instead of investing in technology that would have brought loyal shoppers online to buy goods for staying home and feathering their nests.
These companies looked like early winners, and yet the falls were more spectacular than the rise. They had a plan. They were aligned. Where they failed was in imagination. Marching in lock step they went right over the edge.
Why it’s easy to go over the edge
In hindsight we can see mistakes. But how does a smart team keep from outsmarting itself? It comes down to a discipline – avoiding the tendency toward group think and coalescing around one possibility.
Breaking the cycle to think differently together
Breaking this cycle of group think is difficult, but there is too much at stake not to do it. The discipline that saves the smartest, most successful organizations in times of uncertainty is a dedication to scenario planning.
Scenario planning is both a process and a discipline that enables your team to imagine “what happens if…” by reflecting on the variables for your business and speculating with the best of your current data and experience how those might play out.
With this process your team can go deep and long before events occur, playing out how they might respond. They can then agree on the critical factors that they’ll need to consider as events unfold. They put together plausible scenarios – not only Plans A and B, but also plans C, D, E, F, and G.
Scenario planning is the practice of creating varying courses of action for a business to implement based on potential events and situations, known as scenarios.
It enables teams to challenge their own thinking, consider possibilities, and later, respond dynamically to an unknown future. There are many ways the future may unfold with scenario planning, guiding teams to be responsive, resilient, and effective.
The process begins when you define your critical uncertainties and develop plausible scenarios.
This requires teams to both apply a sophisticated process and develop the team dynamics and characteristics of agile teams.
Scenario planning is a team sport in that it first requires us to acknowledge no one of us is smarter than all of us. When your team develops this capability, you have the ingredients to become agile. Agility is not so much response to crisis as it is planning to pivot when necessary and knowing what you will do. It may mean changing the metrics by which you’ll measure success so that you can manage through a challenging period.
There may be no industry that suffered during the pandemic more than the airlines. Many tried and tried again to “guess” when air travel would resume. CEO of United, Scott Kirby told analysts “We’re not going to pretend we know what demand will be.” After spending months pouring over data, they concluded it couldn’t be done.
Instead they assembled a “bounce-back” cross-functional team to consider slow, medium, and fast rebound scenarios. Conversations on cutting costs were scuttled for debates on growth. Many had never met each other or worked together. But they set a goal of becoming a “just in time” organization, looking at options, risks, plans. Through that they placed some bets. The result was a different version of success – liquidity – which enabled them to ride out volatility in demand indefinitely.
Why can’t more teams do what United Airlines did? The answer is they can if they know how to get there. There are qualities of leaders and teams that give them the capabilities to work together more effectively and thrive in uncertainty, and tools to support them through the churn. Scenario planning is one of those tools – the most powerful way to ensure your team has the debate before there is a crisis. The difficult conversations have been started, the tradeoffs contemplated, so that when it’s time to act, it feels familiar.
Leading a future-proof team
The role of the team leader is to create space and environment for acknowledging what is unknowable and building a process that moves away from report-outs and political debates to alignment around critical factors and criteria for decision-making.
The team needs to be empowered and expected to debate constructively and bring discipline to its decision process. We know from research and through our work with agile teams that there are three qualities of these teams that make it more likely they’ll be able to plan for various scenarios, stay current on the critical factors, and be ready to pivot.
Seize the power of Both/And thinking
Both/And Thinking is the ability to hold that more than one seemingly conflicting fact or set of facts may be true, or there maybe be more than one scenario, potential outcome, or impact of any decision.
Both/And Thinking in teamwork requires all members to hold for the group the notion that seemingly opposing points of view can both contain truths. For example, it can be true that a recession may be painful, but also positive for your company.
To encourage both/and thinking, enable your team to embrace the plausibility of numerous scenarios, as well as options for the best actions based on emerging data. Helping your team to explicitly understand and analyze both sides of the seemingly contradictory truth is a key step forward.
Unlock the creativity that comes with curiosity
In teamwork, curiosity is ability of a team to display humility by soliciting input and other points of view. Curiosity avoids narrow, myopic thinking. It prevents your team from closing ranks at critical moments and helps open the aperture to see all possibilities.
To encourage curiosity, insist on questions even from those who have “been there and done that.” Seek to understand, model the behavior by asking questions yourself, even if you believe you know the answer. You never know when the “crazy” idea will be the one that makes most sense.
Make the path forward real through Decision Savvy
All the curiosity and flexibility in your approach won’t mean much if your team can’t make good decisions and move forward together. Agility requires a discipline around decision-making that encourages the team to decide on the criteria for decision before advocating for a point of view. When your team does this, it is far easier to build alignment and get to the right decision.
To foster decision savvy requires the leader to insist on taking a step back to ask “what problem are we solving” before the team begins solutioning. This step alone will prevent your team from solving before they get to the heart of the matter. Then, simply ask, “what are the criteria that this decision must meet?” and generate those in writing. Use it as a checklist to consider the various options, and then, tally up how well each potential solution meets the criteria.