For some businesses, it has been a rough road since March 2020. For others, business has never been better. The truth of this imbalance has little to do with leadership, where great leaders succeed, or where not-so-great leaders get exposed.
While most leaders will gladly take credit for good results occurring on their watch, the past 18 months don’t serve as a reliable litmus for good business management. In fact, it may have more to do with being in the right place, at the right time, with the right products that supersedes even the best laid strategic plans.
And right now, perhaps unlike any time in recent memory, those things outside of anyone’s control are either working disproportionately for you – or against you.
As business leaders continue to reassess what’s working, what’s not, and why that it is, it’s important to recognize what’s within and outside of one’s control, no matter what the current balance sheet suggests. For example, businesses with bottom lines that were healthy and strong in 2020 benefitted from sectors that were in demand while much of the economy was put on pause. But this year some of those same businesses are feeling the pinch of log-jammed supply chains, demand outstripping supply, and inflated prices on just about everything. If things are exceptionally good, it’s likely not all of your doing and you’re benefitting from outside circumstances. The same is also valid if the ledger isn’t where you would normally want or expect business to be.
Five Things Outside Your Business’ Control
As a business owner or top executive, there are many things you can wield influence over and control, including the company’s strategic priorities, budgets, supplier relationships, people development, and so on. But knowing what you can’t control is equally as important, as these things have the potential to disrupt the business – negatively, and sometimes positively. They include:
- Political – elections, policy decisions, and resulting regulation all have an ability to impact the business climate and results. In times of party change in either the executive or legislative branches of government, there’s often a cautious wait-and-see approach that, almost cyclically, interrupts business as usual. In today’s politically charged environment, organizations can expect to experience heightened uncertainty.
- Social – right now this could be about who can enter your business safely (vaccinated, masked, socially distanced), or where you company stands on social issues of diversity, equity and inclusion. Connected social conversations have greater implications to businesses than ever before. Company miscues that might’ve been overlooked in the past can be broadcast to millions of consumers instantaneously that can have a direct impact to the bottom line.
- Environmental – for larger companies in particular, the push to a carbon-free, sustainable business model is one example that is both about the environment but also speaks to an accelerated shift in the business environment. Businesses must pivot to meet these new realities and to achieve new Environmental, Social and Governance (ESG) targets that consumers, investors and policymakers are demanding.
- Technological – we’re witnessing massive adoption of technologies that are crunching data and making predictive decisions to accelerate business faster than ever before. This digital revolution is rewarding those who sprinted ahead as others seek to catch up. But a recent global shortage of microchips that power our connected lives has disproportionally affected some industries, with auto manufacturing companies among the hardest hit.
- Nature-driven – drought, fires, hurricanes, extreme weather, power outages and blackouts – these are the kind of unexpected, nature-driven disruptions that wreak havoc on businesses locally and those who have regional, national or global operations in impacted areas.
During the last 18 months, all five of these elements that are outside of your control have been prevalent at high levels – and often all at once.
So what can you control?
Your focus and your action.
I’ve spoken about the Pareto Principle on my podcast, which also is known as the 80/20 rule. When we understand that a disproportionate number of things are outside of our control, we can get focused on the most important things – particularly those things that need to happen now, or in the next 30, 60 or 90 days – and take the appropriate action. We know that the things outside of our control are going to exist and persist. By focusing on the most important things we can control – and execute well – helps to unlock the opportunities that afford the business to compete and create value.
The fact is, most businesses grow because market conditions allow them to grow. The analogy of a high tide that lifts all boats doesn’t separate the remarkably better businesses from mediocre ones. They all benefit from a high tide. Even a low tide, in most cases, will create an opportunity for the business that has a true competitive advantage. If it feels like a low-tide moment, remember that these conditions happen. The tide, much like markets, never stops moving. But it’s the focus and strategic actions taken that can make any company more resilient and able to ride out all tides with greater success.