Having survived the 2012 Mayan Apocalypse, I wonder what 2013 will bring us. Most economic talking heads and soothsayers predict it will be an improvement over the past few years, but that there is still much uncertainty — the debt ceiling, government spending cuts, taxes, health care changes and European and Asian markets' volatility. In a nutshell, 2013 is shaping up to be a Year of Optimism and Uncertainty.
Going on for more than four years, how do business leaders navigate their companies and people toward realizing the optimism while guarding against the negative effects caused by uncertainty? Isn't that a key test of leadership? Great leaders steer their companies through these waters, while poor leaders allow their organizations to drift with the currents, reacting only to “issues of the day or week.” To improve your ability to shift from a reactive mentality to a proactive one, coach your team to better identify, assess, and plan for assumptions.
First, identify your top five assumptions for the year. These are key assumptions that could affect your company, your department, or team positively or negatively through the year. Think in terms of “what keeps you up at night.” They will likely be related to your 2013 goals and objectives, or how your team operates. Some examples could be “increase sales by x percent over last year;” “close a new deal with client x”; “hire a person to do x”; “no loss of team members.”
Next, take each assumption and determine how you can validate or verify it. This may require a decision or action by a team member, someone above you, a client, and/or yourself. Most assumptions can be validated through a phone call or email to someone, or making a needed decision. However, some may not be verifiable until after an event or date passes, because you cannot control the assumption — such as weather or an external market change.
For those that may be verified, write down the actions required to validate or verify them. Assign dates and people to complete those actions. Then discuss their status in your staff or team meetings. This keeps them in front of your team, and demonstrates that they are 1) important and 2) should be validated. As you complete the validation (or closing) of an assumption, re-ask yourself the question of what is another key assumption. This process will shift your team's focus to identify, assess, and validate key assumptions. It will shift them from reacting to issues that could have been prevented.
For those assumptions that cannot be controlled or verified until after an event or date, they become key risks — potential problems that have not yet occurred. Have your team identify ways to minimize their impact should they become realized, and prepare plans to respond to them. This does not mean you can prevent them from impacting your company, but having a plan to deal with an issue often improves how quickly and disciplined your responsiveness will be.
As we ring in the New Year, we have already had a key assumption test — the “fiscal cliff.” It had impacts on business ranging from payroll tax deductions to tax rates and credits to overall economic outlook through spending cuts.
Ask yourself how did your company deal with it? How did you prepare for it? Did you find yourself or organization assessing its implications throughout December 2012, or did you wait to see what the results would be in 2013? The “fiscal cliff” legislation answered short-term (2 months) questions, but failed to provide long-term (3-5 year) certainty for business leaders to make key decisions. As we have now seen for the past several years, the “cliff” example has become the new normal — uncertainty is here to stay for a while. The question for 2013 is will you lead though it or be driven by it?
Your Business Coach is a regular column produced by The Persimmon Group, an Oklahoma-based consulting firm that offers practical, results-oriented advice for business professionals of all disciplines and business owners across industries. Today's column is by TPG Founder and CEO Bill Fournet. Email him at firstname.lastname@example.org.