By Barrett Cordero, president of BigSpeak, a leading global speakers bureau representing business icons, bestselling authors, thought leaders and celebrities.
Do you feel like you live in a world filled with volatility, uncertainty, complexity and ambiguity? From reading the news, it may seem like this “VUCA” world is unstable and getting worse for you and your business. Take your pick on a stressor: inflation, war, artificial intelligence, cyber attacks, violent crime, mental health crisis or global pandemics. When faced with so many challenges, it would be easy to give up or be pessimistic.
Instead of pessimism, I choose optimism. In fact, I believe a business professional’s best strategy in a VUCA world should be optimism. It may seem counterintuitive, but there are many reasons to be optimistic about the present—and the future—when you change your mindset to embrace the world as it is. Here are three reasons to consider.
1. History repeats itself.
You can learn a lot from history, especially since history typically repeats itself. For every market that has gone down, there has been another market that has gone up. For every recession that decreases a business, there has been a period where the business has grown.
Take the great recession in 2008. After having gone through a period where sales went down 40%, our business decided to prepare for the next downturn. We developed a Market Correction Reset Strategy that consisted of three points:
1. Put aside your profits in the good times (about 10% to 20%, depending on how well you’re doing).
2. When a downturn hits, cut all your discretionary spending, stop bonus programs, have your leaders and owners take a significant compensation cut and have your team take modest compensation cuts.
3. Then, and only then, do you make the toughest decision every leader dreads making, which is letting go of good people.
By creating this strategy from what we learned in 2008, we were able to employ it to help us survive the pandemic downturn of 2020. This is just one example of how learning from past VUCA challenges can help you prepare for those that come later. The fact that history repeats itself not only means that good times will follow hard ones, but also that you can use the lessons from hard times to overcome those that come in the future.
2. Leaders learn from challenges.
You can also gain experience from industry challenges. Business leaders get this experience from facing challenges like volatility, uncertainty, complexity and ambiguity, then surviving to use that information again in a similar situation.
Look at any market where a new platform was introduced. Zillow became a competitor for real estate agents. TurboTax took on some of the work of accountants. Etrade, Robinhood and WealthFront were new ways to invest without traders. And Airbnb competed with hotels. However, you may have noticed that even though these new platforms competed with traditional industries, they didn’t eliminate real estate agents, accountants, traders or hotels.
What can a leader like you learn from these challenges? In each instance, the markets for each industry grew. The platforms did not take away business—they simply fostered more transactions. It turns out that data platforms and customer service both matter. The key here for your business is that no matter the disruption, you can learn from the challenge and grow your business.
3. Real progress is not measured in the short term.
Another reason to be optimistic in a VUCA world is that progress is not measured in the short term. Progress is incremental, sometimes even regressive, and doesn’t always move up and to the right. It may seem like your personal or business challenges are stopping your progress and reducing your profits. But if you look at things in the long term, profits are going up. You just need perspective.
How do you get perspective? Look at your historical sales data to give context. Results can be volatile in the short term. You can do great in December and be dead in January. One or two months is not a trend—it’s a blip. Even a down (or up) quarter is not enough to tell you which way the business is going. A noteworthy change usually can be seen after four months (as a general rule of thumb), depending on your industry.
Volatile, uncertain, complex and ambiguous events may seem to set your company back in the short term, and it may seem easy to give in to pessimism. However, if you understand that history repeats itself and that progress is not measured in the short term, you can learn from challenges, find a reason for optimism and embrace the opportunities for growth.
