Leadership Strategies for Difficult Times
The past two years have seen their share of challenges, from the COVID-19 pandemic to the Ukraine crisis. These changes have slumped GDPs, widened income gaps and pulled in another $150,000. million people in extreme poverty.
Unfortunately, more challenges are yet to come. More than a third of respondents from our Global Risks Report see the gap widening between the “winners” and the “losers” in the short term. Many expect near-constant unpredictability, as the next two to three years will likely be shaped by more environmental change, geopolitical crises, and potential economic volatility.
In contrast, leaders who understand the need to place future solutions above past practices will be better able to help society achieve critical social and environmental goals in a rapidly closing window. These leaders will adapt nimbly to volatility and succeed over the long term.
This coming period can also be a period of longer-term renewal for agile leaders who engage in new practices and think ahead first. These leaders understand that we will not return to the status quo until 2019. They will be better prepared for the continued disruptions ahead.
Here’s how future CEOs will truly shape the world for the better, and what they’ll need to succeed.
Adopt new practices
The pace of change will require a new kind of flexibility, one that allows leaders to navigate a new landscape and develop new practices and business models. It will also require new approaches to planning and ways to mark success. Success, in this future landscape, will reflect a faster journey as opposed to a specific static outcome depicted months or years in the past.
Traditional tools like the typical three to five year plan will be less useful in times of rapid change. Future leaders understand that measuring success against years-old key performance indicators (KPIs) could prepare their teams for a context that is no longer relevant. As HBR highlighted earlier this monthstrategic planning “must evolve from a static model of planning and then executing to a dynamic and continuous approach to strategic decision-making and execution”.
For many forward-looking leaders, success might require developing entirely new sets of metrics. When it comes to plastic waste, for example, there is no set of standardized metrics to track progress in reuse, which is critical to advancing plastic pollution and protecting vital resources. To address it, a coalition of business and government leaders at the World Economic Forum Consumers Beyond Waste (CBW) are developing standardized metrics, a key step in accelerating the shift to model reuse. Such a decision is more sustainable for business and the planet and shows how new KPIs will be designed to take into account the objective as well as the benefits.
Think about values
Most of us, myself included, haven’t always asked ourselves after a business decision, “How will my choice impact the climate?” How will this choice shape the economic growth of the communities we wish to serve? But these simple questions—the ones that ensure our actions align with our values—will be essential in the rapidly changing days ahead.
Priorities such as sustainability, resource protection and inclusion are long-term. Their successes don’t always match the thinking from quarter to quarter. While it may seem like volatility should distract leaders from long-term goals, looking to values during these times will help leaders stay on track and weather a storm of competing interests and crises.
We are already seeing such embedded thinking across a range of companies and organizations. For example, a recent series of World Economic Forum Case studies on measures of stakeholder capitalism explores how companies began to integrate their values into their daily operations. In some, environmental sustainability and governance (ESG) topics have even become standing concerns on board meeting agendas, leading to new ways of establishing processes that drive priorities forward.
Other companies interview their staff on how close companies’ actions are to company values, which is another productive check for reassessing goals while connecting with larger teams.
Above all, these forward-looking organizations will build the moral courage that leadership consultancy Russell Reynolds deemed essential in its recent research on sustainability leadership. This feature of boards and senior management drives home the message that long-term goals like reputation are as important as short-term sales metrics.
Companies with this goal will be rewarded with dedicated talent who knows they’re doing work they can’t do anywhere else. The resulting empowered and entrepreneurial teams will drive change from the ground up.
Along the way, strategies will adjust more easily to the fluidity of industries, technologies, sectors and markets. These organizations will be on the fast track to achieving more important goals than just the company’s bottom line and their leaders will have an impact beyond their company or individual mandates.
Build for agility
Forward-looking leaders will plan for disruption, not just react to it. The speed of innovation will require agility that goes far beyond technology. Teams empowered to green light new projects will more easily exploit new opportunities and more quickly scale the growth of new business areas.
Volvo Group’s Lars Stenqvist told the Podcast Meet The Forum Leader last year that the “time of control tower management” was over. For his teams, this means no more thick piles of rigid specification documents, as developing disruptive technologies requires more dialogue and space for creativity. As a result, leaders delegate more than they dictate and partner with vendors to find solutions. This leads to open dialogues that better leverage shared resources to make progress on an urgent challenge: decarbonizing transportation.
In a fast-paced world, you won’t have time to build resources or capabilities. Organizations that integrate working with external partners into their daily routine will effortlessly maximize shared resources and thrive in the rapidly changing environments of the future. In fact, Stenqvist believes that being good at partnering will become a competitive advantage companies can’t ignore.
We see again and again how new thinking leads to new solutions. For example, our Uplink Innovators at the World Economic Forum show us that some of the most creative solutions are often found by following less traditional approaches. Emerging Markets Entrepreneurs go into more detail about how creative leaders share resources and responsibilities to quickly create solutions. They set an example for leaders on all sides.
The real opportunity to think ahead first is the ability to reshape entire industries. A leader’s efforts could be a true multiplier for good, creating patterns that are replicated, triggering true transformation.
Forward thinking will help the planet. It will also promote prosperity. Consumers will become increasingly invested in the origins of their products and services, and those who adopt climate-friendly practices will likely quickly gain support. In reality, a recent study in Nature found that we often underestimate support for climate practices by half. Investors will follow these market changes.
We have already seen this potential on a small scale. A 2021 study by the World Economic Forum and Scaleup Nation found that start-ups are 43% more likely to grow than purely commercial businesses when economic and societal goals are combined. These scale-ups are creating new businesses while reshaping existing sectors. Those leaders who tackle both a competitive business environment and the way business is done have a better chance of succeeding in both cases and leaving a lasting mark.
Such a transformation will require people to drive this change. While many of us have heard that partnership and collective action will be essential in the years to come, they are all the more critical now. More leaders need to foster collaboration, take responsibility within their industries to better leverage and share resources to drive the societal change they would like to see.
As leaders adjust their practices and redouble their values while becoming more responsive, innovative and agile, we will see a sea change on issues such as pay gaps and living standards. Crucially, we will also be better placed to achieve climate goals, including tackling emissions and waste. It is a transformational opportunity that is truly once in a lifetime. This is an opportunity that future leaders will not have ignore.
Sarita Nayyar is the Managing Director and COO of the World Economic Forum.