There's a strong argument to be made that the economic disruption of the COVID-19 pandemic has created a sense of uncertainty that we haven't experienced before. In this interview, Business Adviser Lisa Lai provides practical tips on how to survive the storm and position your organization to succeed.
With experts warning us that the global economy could take a $1 trillion hit from the disruptive impact of COVID-19, turns out that our 2019 conversation with Business Adviser Lisa Lai is more on point than ever.No matter your leadership role, Lai's insight will help you succeed in today's volatile environment. Yes, all businesses will struggle. Some more than others.
But without a vision for the future, uncertainty will paralyze innovation in even the most successful brand. Not having a pragmatic vision for long-term sustainability, says Lai, is like being a hamster on a wheel chasing shiny objects and going nowhere fast. But the formula for sustaining growth in periods of uncertainty, says Lai, is to keep an eye on current trends while also having somebody in your organization looking over the horizon.
Hope you enjoy the conversation.
Appian: So, if you're the CIO and you're running a big organization, what are some of the warning signs that your organization is not aligned strategically?
Lai: So, visualize this: Your organization has competing priorities, your cross-functional teams not moving in the same direction because they're getting mixed signals. There's no alignment of goals across the organization. And it's all because of uncertainty and people not being sure who to throw down with or which way to go.
So, what happens with these organizations is that they're slow to explore their options. They're slow to make decisions, slow to move and even slower to pivot when new information surfaces. They're kind of like dinosaurs.
But what has worked historically won't work in today's economy. You cannot let that manifest in uncertainty and how people show up to do their jobs every day. It creates all kinds of bad behaviors.
Appian: One of the other things you've written about is the benefit of operating in sprints in the digital economy and embracing short-term strategies. Why is having a sprint mindset so important? Why does that matter?
Lai: When you're not sure what the end-game will look like, you have two choices: You can either wait for clarity from above or you can move.
But you can't really place long-term bets or plan long-term moves without clarity. But what you can do is identify things you can do right now that will benefit the organization or your customers.
There are some companies that operate almost exclusively in sprints. (I'm not necessarily a fan of avoiding a long-term bet). But I do highly recommend that leaders not go into a holding pattern while waiting for clarity. There's almost always something that can be done that will make you stronger and better positioned to compete.
Appian: Which leads to my next question. Change is happening faster than many of us ever imagined. Which creates a lot of ambiguity. What are some practical tips for overcoming strategic uncertainty?
Lai: This is probably one of the hardest things that most leaders grapple with "What do I do when clarity isn't there and it's not right around the corner?" And the advice that I generally give is try to knock out as much ambiguity as you can.
Appian: And what's the best way to do that?
Lai: So, there are three pieces of advice I would give:
Appian: What do you mean by developing a strong point of view (POV)? How would you break that down for our readers?
Lai: When I say develop a strong point of view, what I mean is that when the answer (to a problem) isn't clear, it's your job as a senior leader to try and develop whatever clarity you can. So, learn as much as you can outside the four walls of your organization.
Learn as much as you can inside your four walls. And then develop a strong point of view.Stand for something and find the right channels to share your ideas (with the rest of the organization).
My opinion is that if you don't have a strong point of view about digital transformation or any other evolutionary aspect of your business or business model, you're not in a position to be influential and you'll struggle to keep up over time.
Appian: That sounds like hard work. C-Suite execs are very busy people. So, how do they respond to that advice?
Lai: The biggest push back on this is always: "I don't have time to do all this research and ask all these questions." But I don't buy it. I mean, I get that senior execs are busy. And I'm not asking people to devote hours to do this. But I think there really is no excuse for not being well informed and not taking the time to develop a strong point of view about the business.
Appian: Some pundits argue that strategy is stuck, and that many business leaders are trapped in strategies designed for yesterday's economy. What do you make of that argument?
Lai: I would say yes and no. Let me explain.
Much of what has worked historically is still valid: Watch for unfolding trends, assess the market, identify what's relevant, find a way to leverage your strengths, build great products, measure, pivot, change, evolve. But I think what's different is speed and agility.
Appian: So, adopting a mindset that enables your organization to move faster is essential to success.
Lai: Yes, leaders have to learn to move faster (which inherently means more risk and uncertainty.) So, I think it's more of a mindset and skill set issue: developing a competency to move forward when things are unclear and managing your risks so you can course correct while you're moving so quickly.
So, I think it's less about a fundamental shift in what it takes to find and capitalize on great strategic ideas.I think it's more of a mindset shift: How do I do all of these things faster? How do I pivot faster? And how do I manage my risks more aggressively?
Appian: What about the notion of sustainable competitive advantage? The average lifespan of large companies is dropping fast. Research shows that the average lifespan of a company on the S&P 500 is down from 60 years in the 1950s to less than 20 years today. So, is the idea of sustaining a competitive advantage irrelevant today?
Lai: So, here's what I'll say. I'm a fan of forgetting about long-term competitive advantage and chasing short-term competitive advantage, being nimble and responsive in the market, and capturing as much value as you can very quickly.
But I also believe that without a vision for long-term sustainability, you're a little bit of a hamster on a wheel. You're chasing shiny objects and going nowhere fast.
You'll become addicted to short-term gain. But you'll lose the possibility of being a game-changer, of being an innovator, of being someone who comes in and fundamentally changes how people do business.
Appian: So the takeaway for senior execs is that you have to find a way to balance this idea of short-term competitive advantage. You have to have wins that will sustain you in the short term.
Lai: Yes, someone in the organization must also focus on long-term sustainability, the big idea that's going to allow us to figure out how we're going to run the marathon while we learn how to sprint. I think you have to do both and it's not easy. We can all acknowledge that it's hard enough just to find a short-term competitive advantage.
Appian: But what about the challenge of long-term sustainability?
Lai: When you start talking about long-term sustainability, people start getting uncomfortable because what is long-term? It used to be 20 years. Then, it was 10. Now some people say a long-term plan is just two years.But I think the point is that you have to have your eye on today, but somebody also has to be looking over the horizon.
Appian: We're almost out of time but before you go, I want to come back to something you mentioned earlier in the conversation. You talked about leadership and emotional steadiness and the challenge of navigating emotions in the C-Suite. I want to come back to why you put so much importance on that.
Lai: Well, we know that if you manage your emotions well, you're going to be able to show up as a more consistent presence in the organization. And the more consistent you are, the more authentic you can be. That means you're going to be perceived as stronger and more confident. We know all of that is true.
But I think the biggest thing to remember is that as a leader of an organization, we tend to think that we're managing a business but we're managing humans.And humans are emotional beings by nature. And, so I think you have to be self-aware enough to acknowledge and navigate your own emotions, but also be very aware of (the emotions of) the people around you.
That kind of (emotional) steadiness translates out into the organization and starts to feed on itself.
Appian: Finally, what are your expectations for the future in terms of big trends that are on your radar as it relates to organizational transformation?
Lai: Well, I think the first trend is that every organization is going to have to transform to some degree. And, so, if we can acknowledge that transformation is going to be happening in every organization to some degree, it begs the question: How do you navigate that?
And, so I think perhaps the biggest and most significant trend you're going to see is what I also consider the hardest to navigate: And that is balancing this more inquisitive, collaborative, strategic process that zigzag I talked about earlier--tapping into that collective genius of the whole organization and balancing that with a need for speed.
Appian: Which brings us back to the challenge of getting more people involved in the strategy development process while also moving faster.
Lai:Like I said, this is the hardest (challenge) to navigate but I think it's game-changing and I think it's going to be essential moving forward.Every organization is going to have to make it work within the constraints of their size and structure.But I think challenging those very foundations is going to be at the heart of success for organizations over the next five years or so.And I mentioned earlier that the side effect of moving more quickly is risk. And, so, I think the third trend to watch is how we manage risk more aggressively in the organization.
Appian: But how do you do that while operating at digital speed?
Lai:When we're moving fast, we have to be smart about our experimentation and feedback loops and how we pivot. (Bringing) all of these things together involves tough decisions that organizations have to make.But if you don't have conversations about it, if you don't decide how you're going to do that well, I think you're already behind the eight ball.
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