Business Leaders Will Need To Account For Ongoing Uncertainty
The conflict resulting from the Russian invasion of Ukraine has heightened concerns on many fronts throughout the world. We are witnessing political, humanitarian, economic, trade, globalization, and governmental impact. The attempt by Russia to overthrow Ukraine’s leadership and bring the country into the sphere of Russia is intensifying uncertainty for businesses across the globe.
As I have written about on several occasions, uncertainty has always been a part of the business world. Businesses have tried to tackle uncertainty with data, research, studies, reports, predictions, pipelines, forecasting, and more. Sometimes these attempts or methods work and sometimes they do not. With the deepening impact of the global COVID-19 pandemic still rippling throughout the world, businesses are about to be hit with another wave of uncertainty.
The new era of uncertainty means businesses will need to be nimbly ready for the next impactful event. As mentioned often, there will be more hard-to-predict events that will intensify uncertainty. Except for the most oracle-minded of leaders in many fields, no one could have predicted Russia’s intent to invade Ukraine on the scale it has. Altering the landscape of business and global world order.
One macro-outcome we can expect now is that the post-Cold War global economy is about to be over. The actions of both Russia and China echo what will feel like a return to the Cold War era. Yet, it will contain a different set of rules and tools bound to reshape the economies of the world. These rules and tools will aim at economic dominance. Not to say that nuclear proliferation and deterrence will wane, but the tension is now more about economic dominance versus ideological dominance.
It may be strange to bring up this conflict in a business context. What is different from the earlier Cold War era is how much business is now interwoven into relations with Russia, China, and the rest of the world. The sanctions being imposed today on Russia are more economic or business decisions than political decisions. Where decisions on sanctions and economic policy can severely impact economies and the ability to thrive on the business front.
With uncertainty intensifying, what does this mean for business leaders and businesses going forward? What should business leaders do?
- Account for uncertainty in all aspects of their businesses
- Pay attention to employees near and far as morale is impacted
- Plan for alternatives in critical production components
- Be realistic and revise global expansion plans
- Account for fuel costs and costs of goods rising
- Check-in with buyers and customers on the impact of uncertainty
- Check-in with suppliers on potential shortages
- Engage in outlook planning
The new era of uncertainty continues to reshape a post-2019 world. We cannot entirely predict what a world rocked by a devastating pandemic and now a threatening conflict will look like. Nor can we say with certainty what the full impact will be on how the world does business as a result.
What the current state does tell us is that leadership must shift from a mindset of wanting precise certainty when making decisions. To that of accounting for a high degree of uncertainty when making decisions.
As of this writing, Ukraine and its capital of Kyiv have not fallen or capitulated. Our thoughts, prayers, and resolve are with the people and nation of Ukraine. And with the courageous leadership of Volodymyr Zelensky.