On the radio this morning I heard a very good definition of Purpose – “Purpose is good intention linked with a deadline”. One of the key messages from virtually all leadership studies is people make better decisions when they have clear Purpose and direction. But that can be hard to provide when things are very uncertain.

Economic uncertainty and leadership

In this period of continued economic uncertainty CEOs and their senior leaders are potentially contemplating one of three different strategic issues:

  1. Survival – still navigating fierce competition for revenues, cost cutting and the knock-on effects on staff morale and engagement.
  2. Big Opportunity – opening of new markets and opportunities in the world post-Brexit with customers seeking lower cost (potentially more efficient) providers or higher quality, more creative providers and some traditional competitors in trouble
  3. Stagnation – business OK but even relatively loyal customers reducing demand and exerting strong price pressure or holding back investments until the economic uncertainties become clearer

In each case there is uncertainty on a huge scale. Companies in Survival mode are tightly focused on matching business processes and output with substantially more demanding customer needs and pressures. Steering the business is difficult, staff morale is likely to be low and there is noise and confusion in the business as adjustments are made.

Companies who are in “Big Opportunity” mode also face changing shareholder expectations but are typically in a stronger cash-flow position. They may have the resources to explore opportunities such as acquisitions or partnerships that could change their scale, reach and cost base. But the environment is uncertain and being bold holds many risks.

Companies in “Stagnation” may be tempted to put their heads down and try to weather through the storm by waiting for clarity. But they could miss vital opportunities to explore new options and take advantage of new needs and expectations. If the business environment changes it leaves them vulnerable.

The implications for strategic positions in these situations are:

  • Long-term strategy is less clear and even the vision what you are aiming for is in doubt
  • Thinking becomes short-term and tactical – agility is needed
  • Leaders and leadership teams don’t have clear, compelling messages and so their inclination is to turn down their communication with stakeholders

Economic uncertainty and the individual

In private leaders and managers of all levels may be thinking:

  • I need to avoid mistakes or even doing things that may rock the boat – I’ll avoid saying or doing anything challenging or risky.
  • My personal opportunities are not clear and I now have to work longer than I originally thought– so I need to think about my future and my own opportunities first.
  • There may well be new opportunities but I want to know my back is well covered if I do have to take risky actions – can I count on support?
  • I don’t like managing people or costs so tightly all the time and now we have even more uncertainty – it’s not fun or exciting at work having to squeeze more out of people who are working so hard anyway.
  • How can we ever move quickly to take advantage of the opportunities when everything needs so many people to approve decisions?

The Resulting Gap

When you compare what businesses need to be doing with the experience of the individuals expected to meet these needs, there is a clear gap as

When this gap exists in a business, senior teams may decide what actions to take. However, when they pull the normal levers the organisation’s response is sluggish or poorly implemented – and it can take a while to be noticed.

What’s needed to bridge the gap?

Consistently good decisions in an organisation come about when:

  • People have clear purpose, vision and direction
  • The leaders are connected to the followers’ needs and build trust through shared values always including respect, honesty and integrity
  • High levels of confidence, self-reliance and resilience. These are built through adequate time for reflection, good energy management, and continued learning

To encourage these positive conditions in their organisations, leaders currently need to:

  • Take time to renew and invigorate their own sense of purpose and vision, even if the exact strategy to deliver is less clear
  • Communicate anew and much more with all the stakeholders about what has not changed about the purpose, vision and values. Acknowledge openly what has changed
  • Actively listen for feedback and renegotiate expectations such as customer service, employee terms and conditions
  • Consult, inside and outside your organisation, to hear others’ ideas – and encourage others to do the same
  • Encourage reviewing, exploring and new ideas in ways that motivate rather than expose people

By creating a clearer sense of Purpose and being a “listening and learning leader”, you can build greater flexibility and agility. You’ll see the opportunities and take people with you to seize them.