By: Dr. Paul Stimson
Our recently released Executive Level Organizational Upset Survey confirmed that organizational upsets (any event that impacts an organization's ability to reach its strategic goals) are difficult to anticipate but inevitable.
Whether you are hit with catastrophic external events like Hurricane Katrina or internal debacles the likes of Enron, the question becomes, "How do you minimize the negative impact or better yet create opportunity from upset?"
Employing the most detailed and sophisticated planning and forecasting methodology may enable you to influence the future but every enterprise struggles with the inevitable unpredictability of world events and weather. The rapid rate of technological and social upheaval is not about to abate. And your competition will not wait for you to catch up!
Organizational Upsets: Can't Live With 'Em - Probably Dead Without 'Em.
Upsets happen in ALL organizations. They are disrespectful of company size, reputation, revenue stream or industry. They are an unavoidable aspect of the evolution of any enterprise. In fact, you could make the case that if upsets are not happening then the enterprise is either defunct or in a death spiral.
We didn't need to interview nearly 50 executives from a cross-section of US companies to learn this fact. However, we did need to speak with these leaders to find out why some organizations were able to successfully navigate upsets – even benefit from them, while others were significantly derailed by them.
5 Keys to Triumph Over Upset
The companies we interviewed represented nearly every major industry sector, ranged in size from $50 million to $2.8 billion and faced a wide a variety of organizational upsets. Yet, despite this diversity, there were remarkable similarities in what companies did to successfully manage organizational upsets. Our five keys, are based on the handful of things these companies did really well.
1. Get an accurate picture of what is happening - cast no blame and make no excuses.
As human beings we look to find meaning in all that happens in life. The companies that best weathered upsets worked diligently to get accurate information about what happened before they made a decision and committed to a solution. These companies resisted the common response of rushing to judgement which leads to coming up with great solutions to problems they do not completely understand.
2. Make speed and agility in decision making the hallmarks of your initial actions.
Once the available information was quickly collected, synthesized and analyzed these companies rapidly moved forward. The challenge of many leaders is to recognize that the solution may not be in trying harder but in thinking differently.
3. Recognize that business practices and procedures exist only to serve your strategy and in the face of an upset, they often change.
We found companies that successfully leveraged upset seemed to understand that their purpose - their strategy - is ultimately about crafting a way to achieve success in the marketplace. They displayed a lack of emotional attachment to their legacy practices and procedures.
4. Make testing and failing and testing again until you get it right a key part of your response.
Many companies understood that their first response may not be one right answer. Very few things work right the first time. Quickly conducting tests in the marketplace, assessing the results, adjusting their approach and then testing again, were the hallmarks of ultimate success.
These companies inherently understood that failures pave the way to success, and give their employees permission to try and to fail as long as lessons are learned. Companies that had cultures of failure-avoidance had many unrealistic expectations and a more difficult time weathering upset.
5. Understand that the the ultimate judge of the value of your actions in dealing with an upset is the marketplace - the customer.
Success was ultimately determined by results in the eyes of the customer, versus the intent of the company.
An organization that is able to do these five things well will be prepared to deal with the unexpected. In fact, many of the companies we interviewed that were particularly good at these five keys were able to turn the upset into a competitive advantage. Ultimately, they moved into the future and didn't dwell on past mistakes. Instead they focused on how to leverage emergent possibilities.
Leadership's Role in Triumphing Over Upset
The focus inherent in the above and the drive and direction required to make it happen is provided by leadership. We discovered that in the face of an upset, leadership is at the heart of the success or failure of the enterprise.
We recognize that the performance of an organization is the result of multiple variables in a complex equation. However, through our research and experience, we have come to believe that the leadership factor is often the most powerful ingredient in the formula.
Strong, action-oriented leadership, coupled with alignment of the people across the enterprise is critical in successfully managing through the period of high stress and expectations that we saw during an upset. Leadership was the key ingredient that helped turn lemons into lemonade - and sometimes selling it at a good margin!