“Expect the unexpected,”

“Companies don't plan to fail – they fail to plan,”

“The only constant is change,”

These tried-and-true adages point out realities that business leaders confront daily.

Given that uncertainty and change are woven into the very fiber of running a business, we interviewed close to 50 executives and asked them:

• What are the key events or upsets* that have impacted your organization's ability to reach its strategic goals?
• How has your company responded to these upsets?
• What makes some organizations better prepared to deal with the unexpected than others?
• Are there cultural, structural or demographic characteristics which make a company more or less able to deal with organizational upset?
• What are some of things that keep you up at night when you start thinking about the future of your organization?
• What is one thing you would change in order to improve your organization's ability to deal with future organizational upsets?

*For the purpose of this survey we define “upsets” as anything that impacts an organization's ability to reach its strategic goals and plans.

By providing this snapshot of organizational upsets and the responses to them, we hope to inform and stimulate leadership discussions concerning how to more effectively anticipate, describe and influence potential future upsets.

Key Findings

To follow are some of the key findings revealed by the executives interviewed for this survey.

• Unexpected changes in the marketplace caused the biggest upset for participating companies. Anticipating and responding to market upturns and downturns caused difficulty for organizations. Competitor behavior also caused considerable upset.
• The number one response to both external and internal upset was to increase internal focus and attention.
• Organizations that successfully navigated upsets – and in some cases benefited from them – had a similar outward-inward-outward approach. Most performed at least three of the following steps: Scan, Analyze, Modify, Validate.
  • Scanned the external environment and internal procedures and processes
  • Analyzed the data
  • Modified their approach
  • Validated the modifications in the marketplace.
• The number one inhibitor of an organization's ability to respond to upset was lack of focus. In our interviews, lack of focus took on various forms including: lack of preparedness, having too many priorities, not having the right priorities, sluggish response time, no sense of urgency, and imprecise communications.
• The two biggest advantages organizations pointed to in dealing with upset were strong leadership and organizational alignment. The stronger these two factors were, the more success companies had in dealing with upsets.
• Not surprisingly, a breakdown in leadership or organizational alignment was seen as the most critical internal upset by over 50% of the responding organizations.
• The internal factor that 50% of respondents most wanted to change was to improve performance and efficiency. A close second was to enhance alignment and collaboration.
• The top 3 concerns of business leaders surveyed were: 1) growing the organization and increasing profitability 2) people issues 3) organizational alignment.
• Half of participating executives felt that their best chance to successfully navigate future upsets depended on the strength, skills, and attitudes of their people and a culture that encourages situational awareness and initiative at all levels.

Upsets: Can't live with ‘em – Probably dead without ‘em

The results of this research support the conclusion that upsets naturally occur in all organizations. The type of upset an organization may face typically depends more on the particular phase of its development, the current economic environment and the life cycle phase of the industry in which it competes, rather than on the specific service or product it supplies.

Organizational upsets are an unavoidable aspect of the evolution of any enterprise. As organizations grow and change, they encounter circumstances that challenge their ability to meet strategic goals.

Although most upsets are marked or identified by an event: a drop-off of cash flow; the departure of a key employee; the loss of a major account; the closing of a facility, we know that upsets are systemic in nature. That is, they are essentially caused by the dynamic, purposeful, interactive nature of a system.

In fact, one could make the case that if upsets are not happening then the enterprise is either defunct or in a death spiral. Organizational ability to recognize and respond to upsets only serve to make the organization stronger.