Insights from our Managing Director, Jean Pousson, as Boards navigate through a potentially perilous 2023.
No sooner have we recovered from the aftershocks of the terrible pandemic with supply chain and labour disruptions, that we now face high(er) inflation, high(er) costs of borrowing, a war, geopolitical uncertainties and a troubled political climate here in the UK. This places increased challenges to Boards and Directors, many of whom have become accustomed to a low inflation, low interest regime, with good revenue visibilities and manageable uncertainties.
How should Boards react?
For a start, meet more often and make sure that your agendas are reflective of the surrounding landscape and have not become ritualised out of historical precedent.
• Is your Board composition ready for what lies ahead?
• Is there sufficient diversity of thought and experience?
• Are the conversations sufficiently challenging?
“Have a healthy disregard for the impossible” as Larry Page, one of the Google’s founders would say.
Make time for strategy
We at BEL have carried out numerous Board Reviews, (over 100), since inception, and one area that consistently scores below the average is strategy, ie not enough time devoted to it. Hard questions are not asked and are not sufficiently debated, for example:
• What could make you irrelevant?
• Where could the sucker punch come from?
• Are you able to attract new customers?
A business that cannot attract new customers worry me. Customers can be lazy and not prone to change suppliers. By the same token, businesses can confuse frequency of purchase with brand loyalty.
• Could you be Amazoned?
• Is the Business Model still relevant?
• What have you learnt from the pandemic?
• Who is making key strategic decisions?
• Who is deciding on the future direction of the organisation?
Beware of the illusion of knowledge. Financial desperation should not replace strategic thinking.
• How have you reacted to the changes to the external landscape?
• What are you doing differently?
The rush to the existing often provides false comfort.
• What have you stopped doing?
• What is your current competitive position?
• Have you been able to generate new growth opportunities and/or new sources of revenue?
• What are the biggest STRATEGIC risks that you face?
Do not be enslaved by the Risk Register. Revisit and think more broadly.
• Do you understand the needs of your future customers?
• Have you changed any Key Performance Indicators (KPIs)?
• Is the Board dashboard still fit for purpose?
• Have you made any hard decisions or are you still practicing the long dance of avoidance?
• Can you identify the silent killers in your organisation?
• Is the worst-case scenario really the worst-case situation?
• Have you re drawn the stakeholder map?
In times of uncertainty or crisis, stakeholders behave very differently.
• Who do you consider to be your most dangerous competitors?
Cultivate a healthy relationship with uncertainty.
• Is the Board learning as a collective?
You now operate in a very different environment.
• How different are the Critical Success Factors (CSFs)?
• Do you have the capabilities to cope with any changes?
Resist rolling your sleeves to get involved. Micromanagement can lead to mismanagement.
Bad companies are destroyed by crisis.
Good companies survive them.
Great companies are improved by them.
Andy Grove. Intel