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Anticipate & Adjust: Week 5 - All VUC'd Up

Christopher Clark . April 8, 2020

Entrepreneurs and leaders: 

Below is the week five memo that was sent to our CEOs across the country on Sunday, April 5.

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Several of you in the past few weeks referenced VUCA (Volatility, Uncertainty, Complexity, Ambiguity). If you remember, the 2016 Edison CEO Summit was held at West Point and the curriculum was rooted in VUCA. VUCA came about in the 1990s post-USSR disintegration. The dissolution of the Soviet Union was seen as a dramatic and permanent change in the world.

 

A VUCA world assumes, among other things:

  • Volatility due to a rise in globalization and information technology
  • Uncertainty due to systems that can flip from one state to another 
  • Complexity due to a large number of elements that have non-linear interactions
  • Ambiguity since outcomes cannot be known beforehand

 

Experts and the military concluded that leadership in a VUCA-world:

  1.  Counters volatility with a compelling vision and values for employees;
  2.  Shifts from a single strategy and one plan to multiple strategic options with back-up plans;
  3.  Builds adaptive capacity through developing agility in the operation; and
  4.  Develops organizations that can operate under multiple outcomes by being more diverse in people and process.

 

It is clear why some of you would harken back to VUCA. The framework, easily identified during this black swan, gives you parameters, albeit general, to think through the problematic situation. 

 

I’d like to focus on solution 3 - adaptive capacity through agility. Let’s take agility first. 

 

Agility

A few of you who shared your plans with me all prioritized flexibility, which is a type of agility, at the end of 2Q’20, based on what happens outside your control. 

 

This agility isn’t the classic “if I don’t hit the revised number I will cut more later.” Instead, your plans:

  • Cut once,
  • Solve for runway now,
  • Focus on differentiators that are rock solid today, and
  • Survey customers on what they need next to determine a more tactical timeline for a product roadmap.

These actions exemplify agile thinking, using the parameter of “cash is king” for 18 months while continuing to protect the franchise.

 

Adaptive Capacity

During 2001, the year of 9/11, I was running a company in Colorado as a very green CEO. After the attack, I, along with other business leaders, was invited to the US Air Force headquarters in Colorado Springs to meet with the Head of IT of the Northern Command. They presented a list of lessons learned post-9/11. The very first lesson was “Crises are come as you are.” 

 

Like you, I am already starting to hear talk of what the new normal looks like. This talk might be good for F500 companies with billion-dollar budgets and high-priced consultants, but this is not where we live right now. 

 

Monday morning is about:

  • the next seven days,
  • SBA loan application,
  • A/R risks for the month,
  • re-constituting a depleted S&M team based on 2Q and 2020 revised forecasts,
  • and for some of you, figuring out how to surge capacity immediately because of growth.

 

It would be great to spend the next three months doing deep introspection, testing a refreshed vision, and modeling an operational plan to prominence. Those cycles don’t exist. But you do have the adaptive capacity to innovate new processes right now.

 

As you grind your way through April and May much like March, remember this lesson: “crises are come as you are.” Please pause and reflect on the value of preparation. What did you do before the swan that you can leverage for the current crisis? What will you internalize for the rest of your career in staying agile, open, extensible, and multi-threaded for optionality?

 

I remain very optimistic and this week’s interview with Mark Ruddock is proof of my confidence. Your size inherently has agility and speed. You are all strong and tough enough to course correct or continue the progress to profitability. The inherent DNA of entrepreneurs makes you tailor-made for adversity and change.

 

Finally, this is why we take the time and investment together over 2.5 days to execute a CEO leadership program every year. VUCA four years ago is more germane today than in 2017.

 

This week, as you know, Edison postponed the CEO Summit. We are circling a date in the middle of October or the middle of November. It is going to be one of your best summits ever. There will be minimal need for guest speakers, third party content or extraordinary activities. The agenda will be simple. There will be lots of talking and sharing among peers who have been tested and strengthened. We will assume challenge and change is a constant with a mix of controlled and uncontrollable elements. We will collectively formulate a set of principles and an entrepreneur’s leadership playbook informed by 2020.

 

Good luck this week.

 

Sincerely,

Edison Partners

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