Why managing uncertainty is a key leadership skill

A version of this article appeared in the Fall 2020 issue of strategy + business.

Early 2020, Waffles & Dinges, a popular fleet of Belgian waffle trucks, was in a mode of major expansion. He planned to add traditional restaurants in some markets, including the Mall of America in Bloomington, Minnesota, and American Dream in the New Jersey Meadowlands, where he would sell cranberry and rosemary espressos and waffles. But when the national COVID-19 emergency was declared on March 13, owners Thomas de Geest and Rossanna Figuera realized they had exactly enough cash on hand to give their employees two weeks severance pay. In tears, they said goodbye and emptied their bank account.

After making the painful decision to let their employees go, the couple made arrangements with creditors and landlords. Then they focused on what they could do to help others. They found the answer in their mission: to give people the happiest time of their day.

“In crises, we always solve problems, but suddenly I realized that there was nothing we could solve. There was nothing we could do. That’s when the acceptance started, “said Figuera, the Venezuelan-born co-founder of the company and her Belgian-born husband left their corporate careers in 2007.” It’s not. something that you learn: it is something that you are supposed to fight. But on the other side of the surrender, there was peace, very contrary to what one would expect. In this peace we have found clarity.

They turned to online ordering, which until then was a very small side business, and moved their business from New York to Denver, Colorado, where they already had a store. Their option to donate waffles to frontline healthcare workers was enthusiastically received by customers, allowing the company to bring back some employees. Wafels & Dinges now ships nationwide, not only to its customers but also to hospitals.

As it brutally disrupts life and business as we know it, COVID-19 has highlighted a crucial business skill: the ability to navigate uncertainty. It means knowing what you can control and what you can’t, aligning your business and your employees with a common goal, having a clear vision of where you want the business to be, and trusting your team to. help your business achieve this.

Today’s economy is a real-life laboratory, an environment that supports the conclusion of a 2019 study of dozens of world leaders that identified the key leadership skill needed today as being at the comfortable with risk and ambiguity, that is, the lack of certainty or clarity.

“The best CEOs are able to live with ambiguity in ways others cannot,” said Christa Lynne Gyori, CEO and co-founder of the research organization. Leaders on purpose, who carried out the study. They do this while remaining focused on a strong sense of a common goal – the ambition to create value by contributing to the well-being of society – just as Wafels & Dinges did.

Business leaders who know how to manage best in uncertain worlds also rely on systems thinking that enables them to solve complex problems, the report concludes. They prioritize various contributions, teamwork and partnerships. These leaders make the best team possible and trust that team to find the information the organization needs to get through a crisis.

“These CEOs understand that they don’t need to know everything themselves,” said Tatjana Kazakova, chief strategy officer and co-founder of Leaders on Purpose. “But they have to be prepared to see an opportunity in the dark and understand logically how to get to where they need to be. They have the ability to enter a dark room and know how to bring in light – but [aren’t] afraid to go to the dark room.

We are all in the “dark room”. The pandemic has created a huge shock of uncertainty, which a team of economists recently described asPDF “Greater than that associated with the financial crisis of 2008-09 and more similar in magnitude to the rise in uncertainty during the Great Depression of 1929-1933.” The measurement tool they created, based on surveys of stock market volatility, media and corporate expectations, the U.S. Economic Policy Uncertainty Index, reached an all-time high of 861.16 on May 17, more than four times its level on New Years Day, before the novel coronavirus made world headlines.

The pandemic created a huge shock of uncertainty, which a team of economists recently described as “greater than that associated with the 2008-09 financial crisis.”

The group expects the US economy to contract 11% by the end of the year. Significantly, he estimated that 60 percent of this contraction will be the direct result of uncertainty: that is, a condition in which important information is unknowable.

Because no one knows what will come next, no CEO can reasonably be taken to task for not knowing everything. This provides an openness for leaders who have deployed a top-down, command and control style of leadership to shift to a mindset that helps them and their teams navigate better in uncertain conditions.

Leaders don’t need to enjoy dealing with uncertainty to get them under control. “You can be uncomfortable with uncertainty. We don’t grow up if we don’t feel uncomfortable,” said Lori Michele Leavitt, business coach, consultant and author of The pivot: orchestrating an extraordinary commercial momentum. That’s why the same skills CEOs need to manage crises come in handy in normal times, when feeling like all is well can lead to stagnation. “You have to continually be in this place where you grow, learn and change,” Leavitt said.

The biggest challenge for many business leaders, according to Leavitt, is seeing their role as orchestrating, not commanding. This means that your employees are in touch with their own desires and potential just as much as your business is aligned with its purpose.

The important thing is not that CEOs are the heroes, said Leavitt, but that they can say, after the crisis is over, “Look how the team has come together during this time! Look what they did! Watch as they have stepped up!

This behavior makes all the difference between employees reacting to uncertainty by becoming more creative and proactive, or overworked and crippled. The ability to face uncertainty and continue to pursue your mission will make the difference between success and failure.

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