How to Lead When the Future is Unclear (Part 1)
(This is the first installment of our two-part series on leadership, featuring Lisa Lai (@Soul4Breakfast), business advisor, consultant, author, speaker and former Fortune 500 executive who now works with global business leaders on strategy and innovation and also teaches leadership development for Harvard Business School.)
In the volatile age of digital transformation, we frequently find ourselves managing in a situation of strategic ambiguity—when it’s not clear where we’re going or how we’ll get there. Market conditions are more volatile than ever. And customers have more choices than anyone ever imagined.
But here’s the unpleasant truth: Even if your organization has a clear strategic imperative, your business unit, agency or team might not.
So says leadership expert and former Fortune 500 business leader Lisa Lai.
“I work with leaders all over the world on strategy and execution,” says Lai, “and they shift uncomfortably in their chairs every time I broach the topic of strategic uncertainty.”
“Uncertainty can feel like slogging through mud. It can cause leaders to avoid investments and defer decisions. But companies often succeed or fail based on their leader’s ability to move the organization forward when the path ahead is hazy.”
There’s a strong argument to be made that the best leaders succeed even when the future is unclear. In this Digital Masters interview, Lai gives us straight-talk and pragmatic tips on how to create greater value for customers, shareholders and employees even in the most volatile situations.
Hope you enjoy the conversation.
Appian: So, I read your excellent piece in Harvard Business Review about leading when the future is unclear. What motivated you to write that story?
Lai: Of all the topics that I address with clients, I think strategic uncertainty is the biggest concern that most of my clients face.
And even when leaders believe they have certainty, I challenge them with a few provocative questions which helps them realize that things might not be as certain as they thought.
The problem is that uncertainty has a domino effect that can be paralyzing to an organization.
Digital Transformation, at Heart of Uncertainty
Appian: This is the age of digital transformation and change is happening at an incredible rate. Talk about how that affects this environment of uncertainty that business leaders are facing.
Lai: Digital transformation is at the heart of uncertainty in most organizations. I think a lot of leaders are terrified of the effect that digital transformation will have on their business. And I think much of it has to do with the fact that technology is evolving so rapidly. Many leaders are afraid of making the wrong choice or picking the wrong horse, or that they’ll make a significant investment and not get a good return on it, in terms of value to the organization.
And if you couple that with consumer expectations being insanely high, with regard to digital capabilities, a lot of organizations have been slow to adapt.
And, so, this old school thinking about digital trends is what’s driving a lot of the fear, uncertainty and doubt that we’re seeing in organizations.
Appian: So, what’s the key to breaking through all of that ambiguity? What’s the secret to surviving and thriving in that kind of environment?
Lai: The organizations that will succeed in the long run will have people that are dedicated to getting ahead of the curve when it comes to digital transformation. I think a lot of large organizations have acquired other companies or merged over time, and they’re dealing with a spaghetti bowl of technology preferences and choices that are really hard to unravel.
So, aligning to go forward can be almost debilitating for some of these large organizations—particularly companies in the Fortune 100 that have cobbled together lots of different companies over time.
When your company's strategy is uncertain, it's hard to know what to do. Waiting, watching, worrying? The worst. Try this instead. Check out my article with @HarvardBiz today: https://t.co/VuExA7bNdo pic.twitter.com/PNfOubyl64
— Lisa Lai (@Soul4Breakfast) January 9, 2019
Don’t Let Big Picture Thinking Stall Progress
Appian: Could you elaborate on your comment about organizational alignment—what’s the biggest takeaway on that for C-Suite execs who read this article?
I think the biggest takeaway is that you have a responsibility as a senior leader to show confidence in the company’s future and to drive forward momentum, even when there’s uncertainty.
But specifically, there are two things I hope C-Suite execs take from this conversation: The first is that as hard as it is for a C-Suite leader to face uncertainty, it’s even harder for the broader leadership team.
Appian: And why is that (the case)?
Lai: Because managers can become paralyzed waiting for guidance from the top of the organization. As the C-Suite leader, you have to understand the importance of taking pragmatic action and helping your organization identify what can be done despite the uncertainty.
In other words, we have to know what bets can be placed and how to drive forward progress even when the final destination is unclear. You can’t let big picture uncertainty stall progress in the organization. You have to give direction.
Appian: And what’s the other takeaway for C-Suite leaders?
Lai: The second piece of the puzzle regards emotional steadiness. Very few of us are at our best when we’re facing ambiguity. Committing to emotional steadiness as a C-Suite leader, showing up with courage and confidence even when you’re unsure is critical to sustaining momentum throughout your organization.
Appian: So, C-Suite leaders should be holding their direct reports to the same expectations.
— Lisa Lai (@Soul4Breakfast) January 18, 2017
Emotional Intelligence Separates Best from Rest
Lai: Yes, because everyone takes their cues from the top of the organization. So, if you’re not emotionally steady, if you’re not focused on forward momentum, you’re going to negatively impact the entire organization.
Appian: When you talk about emotional stability in the C-Suite, it sounds like a qualitative argument. But traditionally businesses tend to put more value on quantitative factors that are easily measured. Are you saying that qualitative factors like emotional steadiness in the C-Suite are equally important as hard leadership skills?
Lai: This is a conversation that we have a lot, particularly at Harvard. We talk a lot about the balance of hard skills and soft skills and what really matters.
Daniel Goleman is an author and expert on emotional intelligence. And he asserts that 90% of the difference between a good executive and a great executive is emotional intelligence.
And it’s not because it makes you a nice person or someone that other people want to work with. It’s really about: Can I tell a compelling story? Can I genuinely connect with the people that I’m asking to do more work than ever before? Can I align with my peers and move with greater agility because I have trusted relationships?
Appian: So, is emotional intelligence the thing that separates the best leaders from the rest?
Lai: Numerous thought leaders have done studies that confirm with hard, cold data that the higher your emotional intelligence is, the better you lead and the more effective results you achieve. You can’t rely only on emotional intelligence.
But if you bring a strong IQ to the table, your emotional intelligence is the great differentiator between good and great leaders. And this is never more important than when there’s strategic uncertainty.
So, in my opinion, that qualitative aspect, that soft skill, is actually not so soft at all. It’s really directly related to getting better results because of your ability to connect well and work with other people.
Appian: Sounds like you’re a big fan of leading with emotional intelligence.
Lai: I told you we talk about this all the time.
Appian: So, we’ve talked about the rapid pace of technological change in organizations. And we’ve also talked about emotional intelligence in the C-Suite and why that matters. Let’s switch gears and talk about another important leadership topic: strategy. You’ve written that getting strategy right at the top matters but getting strategy aligned across the entire organization is a whole nother matter. What did you mean by that?
Finalizing Strategy is a Zigzag, not a Top-Down Process
Lai: I think as leaders, we often underestimate the noise that our people deal with every day. So, we feel that if we share strategic priorities once at a town hall or email or PowerPoint presentation that everyone’s on board.
The fact is that strategy, in my estimation, is a conversation. It’s a dialogue where you’re sharing direction and guidance and listening to reactions.
You’re finalizing strategy not top down, but more of a zigzag through the organization. And there’s this incredible need to revisit often and reiterate and reinforce when you have to make a shift based on new information, so that you can maintain alignment. And I think a lot of leaders just don’t do the work. It’s not that they don’t care, it’s just not part of their process.
Appian: So, what do these leaders do instead and what should they do differently?
Lai: So, the theory is “Let’s get aligned at the top as we sit around the table.” We assume that every one is on board whether they agree with the strategy or just decide to comply with it.
And then we assume that every leader is going back to their organization and doing the right thing to bring the strategy to life with clarity, engaging others in the organization. And, frankly, too often that just doesn’t happen.
What’s important when there’s ambiguity about organizational strategy is to have dialogue in that iterative, zigzag process and not simply top-down.
(Tune in next week for the final episode of our two-part leadership series and find out how to tell when your organization is not aligned strategically and what you can do about it.)