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Smart Businesses Learn How to Thrive in An Era of Volatility

Monday, April 11, 2016
EAST GREENWICH, RI—Businesses can not only survive but thrive in an atmosphere of ongoing volatility, such as our current environment, according to The Society for the Advancement of Consulting® (SAC).

Volatility Brings Opportunity

A changing environment bring new opportunities for those willing to look outside of the norm and able to respond to volatile conditions, according to Linda Popky, president of Redwood Shores, CA-based strategic marketing firm Leverage2Market Associates, and author of the book Marketing Above the Noise: Achieve Strategic Advantage with Marketing That Matters.

"A volatile marketplace means there is ample room for disruption. New players can come in and offer alternative solutions, or existing players can reinvent their offerings to meet evolving market demand," she says. "The challenge is to look at ongoing change as a growth opportunity, not a business threat."

Volatility and Predictability

Most entrepreneurs and business owners have grown their businesses in times of volatility…because they had to. From their early days as cash hungry small businesses, entrepreneurs have thrived under volatility, or else they didn't survive. Volatility made them stronger, according to Phil Symchych, president of Symco & Co. and co-author of The Business Wealth Builders.

The keys to accelerating profitable growth, he says, are to expect volatility and then pursue those volatile opportunities that many competitors are avoiding. "Being first in a new market, or creating it, or responding to it, create huge advantages over competitors who are hiding under the covers," says Symchych.

"The current challenges in the oil and gas sector, for example, also create opportunities for courageous companies to acquire new talent, expertise, and customers, and grow their businesses. By expecting volatility and responding quickly, companies can dramatically increase profitable growth," states Symchych.

Leadership in Times of Uncertainty

Dr. Maynard Brusman, a consulting psychologist, executive coach, and emotional intelligence-based leadership development expert, notes, "Volatility shortens the lifespan of a business model and strategy. Yours may become obsolete sooner than you think. Flexibility may be your line of attack, and conservation of cash may be your goal. The inevitable constraints this uncertain economic environment imposes on companies, provides fertile ground for innovation because necessity truly is the mother of invention."

According to Dr. Brusman, "Smart, resilient, and optimistic leaders are pouncing on new opportunities, devising ways to move faster and trying to serve customers in different ways. The economic climate may be volatile, but innovation and entrepreneurism remain alive. Make sure they thrive in your company. To succeed, smart executives will need to adopt a growth mindset and effective frameworks to determine what to start doing, stop doing and what to do differently."

Volatility Requires Vocal Leadership

"Volatile times unfailingly evoke feelings of uncertainty and anxiety—among employees, customers and investors alike," states Liz Bywater, PhD, leadership expert and President of Bywater Consulting Group. "There is no more important time for strong and vocal leadership. In my work with Fortune 500 executives, the topic of leading through uncertainty is very much top of mind.

"To reassure your employees and other key stakeholders—and to help ensure continued focus, productivity, and the retention of key talent—leaders must communicate clearly, directly, frequently, and with candor. They need to be a beacon of hope—a source of inspiration and direction—without coming across as false or naive. They need to overtly recognize and acknowledge people's confusion and fears, but they must not create undue drama or fuel the flames of worry and discontent.

"It's a balancing act that requires the kind of reflective leadership needed for any organization to survive—and even thrive—in uncertain times," she says.

Align With A Cause

"Volatility provides even more justification to align your firm and your work with a cause beyond yourself," shares Karen Eber Davis, president of a Sarasota, Florida firm that helps businesses give forward (instead of back!), and the author of 7 Nonprofit Income Streams.

"The greater the volatility, the more your philanthropic investment becomes a rudder to achieve better profits, better performance, and better communities. When all else appears equal, customers spend their money with businesses aligned with causes," Davis says.

Know What You're Jumping Into

Rebecca Morgan, President of Fulcrum ConsultingWorks, Inc. — a manufacturing operations strategy consulting firm based in Cleveland OH — concedes that negative interest rates, uncertainty in China, and plunging oil and stock prices can make a rational person nervous. But, she adds, "Success in volatile times is really no different than during stability. Success always requires conviction."

Morgan elaborates that conviction, however, does not mean immutability. "Whether witnessing irrational exuberance or desperate despondency, knowing how and when to change is indispensable. Always identify assumptions most critical to decision success. Then identify trigger points for each. When reached, determine if you should limit your investment, or double down.

"Whether it's a calm sunny day or a stormy one, if you can't swim, don't dive into the deep end. Even if you can, never dive into the shallow end. If you're not sure of the depth, get data. Never swim alone. Before you get wet, confirm that water is the best alternative path. And, if the waters rise, know how to get to shore," she says. "Business is no different."

Avoid Putting Too Much BS in Balance Sheets

"When companies massage, fillet or almost cook the books, leaders risk losing track of their financial reality", notes Gary Patterson, the FiscalDoctor® and author of Million Dollar Blind Spots: 20/20 Vision for Financial Growth.

"The problem with telling a different, overly-embellished version of your financial story is how quickly management believes spin versus fiscal reality. This can result in becoming overly creative in stating earnings and result in financial puffery. When you feel you might be creating Million Dollar Blind Spots©, seek the advice of an independent outsider to review for fiscal reality.

"After all, the job, business, or success you safeguard might be your own or a friend's," Patterson says.

A Catalyst For Success

"Volatility is here to stay," points out Lisa Anderson, The Manufacturing ConnectorSM and president of LMA Consulting Group, Inc., Claremont, CA.

"Only those manufacturing and distribution executives who choose to accept reality and leverage the opportunity will thrive. I've found that my most successful clients employ simple yet effective strategies for success. Start by developing a plan for volatility—and make sure to include a backup plan for critical areas of the business. Build flexibility into everything you do, from people to machines, to customer and supplier partnerships. Lastly, always be on the alert for opportunities. The best ones can pass you by if you are asleep at the switch.

"Undoubtedly, the best executives will turn lemons into lemonade. Volatility can be the catalyst for success," she says.

Stop Fighting the Wave

According to SAC CEO Alan Weiss, PhD, "The secret to success in volatility is to be volatile yourself! Stop trying to fight the roaring seas and begin surfing on the waves of change."

 
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