The global outlook for 2021 indicates that complexity is on the rise. The 4 Cs (COVID, Climate, Corporate Social Responsibility and Changing consumer behaviour) present economic, political and social risk. Employers, Directors and Leaders will need to focus on “real-time” skills and knowledge development from the street, not necessarily from the classroom.
Recognition of complexity is not enough- consumers, employees and the wider market are looking to Directors and Business Leaders to take confident and decisive action.
Confident Decision Making
Confidence is used as a market indicator – when business confidence is up, the outlook is rosy. A dip in confidence and shockwaves reverberate across the global markets.
We know from our research that there is a strong correlation between internal business confidence from the Owners/Executives and overall business performance. In our preliminary research for the upcoming Advisory Board Centre State of the Market report, we can also validate the link between business confidence and best practice Advisory Board support for an organisation.
Advisory Boards, built on a best practice foundation supported by ethical engagement, provide a flexible, well-governed environment to support critical thinking to lead to more informed, confident decision making.
In his recent book, A Promised Land, President Barack Obama explained the exact challenge that faces director and leaders today – very little of the decisions they are faced with have a clean, 100% solution. In recalling his time in the White House he says:
[If a problem had a clear solution]…someone else down the chain of command would have solved it already. Instead, I was constantly dealing with probabilities…
In such circumstances, chasing after the perfect solution led to paralysis. On the other hand, going with your gut too often meant letting preconceived notions or the path of least political resistance guide a decision- with cherry-picked facts to justify it.
But with a sound process- one in which I was able to empty out my ego and really listen, following the facts and logic as best I could and considering them alongside my goals and principles- I realized I could make tough decisions and still sleep easy at night, knowing at a minimum that no one else in my position, given the same information, could have made the decision any better.
The use of Corporatised Advisory Boards is helping Leaders, Directors and Regulators to navigate significant issues and embrace stakeholder engagement. The recent shakeup at ASIC is a good example of how Advisory Boards can be a circuit breaker in realigning organisational decision making. A key to the success of the strategy will be reliant on the implementation of best practice and independence.
Organisations Need More Than Resilience
Second to COVID, resilience is the word on everyone’s lips. Forbes even went so far as to name it the word for 2021.
Resilience is defined as “the capacity to recover quickly from difficulties; toughness.”. It’s an important trait, but perhaps the wrong emphasis for what we can aspire to in 2021. Recovery is critical and within the global advisory community we are committed to being activators and drivers of personal, professional and economic recovery.
While most businesses were not prepared to predict the impacts of the global pandemic, the notion of resilience supports a reactive approach.
When bad things happen, we bounce back.
In 2021, successful organistions must do more than bounce back. Directors and Leaders must exercise strategic foresight to embed optionality in their critical thinking. Optionality, is a far more relevant word for 2021.
Optionality is “the quality of being available to be chosen but not obligatory.”
Optionality provides Organisations with practical ways to navigate complexity and uncertainty. Far more than a pivot, optionality is the outcome of robust discussions, powerful insights, leveraged experience and confident decision making.
Leaders are empowered to make confident decisions after carefully exploring their options and based on the best information available to them.
Trust is a Non Negotiable
The 2020 Edelman Trust Barometer found that “amid seismic shocks, trust is the make-or-break difference for brands.” Furthermore, the report states that “Brand trust is earned- through both words and actions.”
Industry and Technical experts ranked in the Top 3 Voices of Influence Across Markets. As the driving trends of Covid, Climate, Corporate Social Responsibility and Change in Consumer Behaviour stretch organisations in ways that they have not experienced before, accessing quality insights with deep expertise will be crucial to ongoing success.
Within our own sector, as the advisory board profession grows and matures, verifiable credentials and demonstrated best practice are becoming more important. Market confidence in Advisory Boards will be underpinned by having trust in best practice and ethical engagement focused on impact.
Regulators, insurers, investors and stakeholders will look to evaluate an organisations governance and advisory structures as a barometer of trust- both through their words and their actions. Organisations will be well served to ensure that best practice underpins their
Businesses of all sizes will be challenged to think differently about their “what’s next”.
Already in 2021 we are seeing an increase in Merger and Acquisition activity, China has unveiled their 2035 economic vision with a firm focus on setting global standards, Supply Chain challenges remain and Cyber opportunity is only just starting to be explored.
Time will tell which organisational leaders are sleeping easy at night.