Strategy development in times of crisis and market upheaval - 10 tips

In the current crisis and market upheaval situation, many things are possible in relation to the development of the markets of numerous companies that seemed impossible before the Corona crisis. As a result, business leaders have almost no valid data on which to base their strategy development and strategic decision-making. This makes their work more difficult. Added to this: Their insecure employees expect them to provide support and orientation, especially in crisis situations. This, too, must be taken into account when working on strategy. Here are some tips on how you should act as a corporate and people leader when developing strategy in a decision-making situation as diffuse as the current one.

Tip 1: Be aware of your function in the crisis and market upheaval situation.

In the current situation, the top decision-makers in companies must set the course for success in their organizations - in other words, they must make the necessary strategic decisions. At the same time, as leaders, they must offer support and orientation to unsettled employees. This also includes telling them "This is the way to go (for now)" and radiating confidence: "We'll make it if ..." Be aware of this dual function. Before public appearances and announcements, reflect on what this means for your behavior.

Tip 2: Develop scenarios and a roadmap for yourself as to how things could proceed.

Because of your leadership function, before you call an official strategy meeting, for example, make yourself aware, alone or among your closest colleagues, of how your company's market could develop in the medium and long term. Also consider the best and worst case scenarios. Derive possible scenarios from this. Reflect on what these mean for your company and what opportunities and risks as well as challenges and tasks arise from this so that you yourself have the necessary initial orientation.

Tip 3: Have strategy development workshops moderated by neutral experts if necessary.

In an environment as diffuse and characterized by rapid change as the current one, decisions in which many influencing factors have to be taken into account cannot usually be made by consensus, because: Due to their biography and function in your organization, the participants in workshops, for example, assess the actual situation, the risks and opportunities, and thus also possible courses of action differently. Conflicts are therefore inevitable. The risk of getting lost in endless what-if discussions is correspondingly high. Therefore, consider whether a neutral moderator should moderate the process for strategy development or a workshop on it - especially if tough decisions are also on the agenda.

Tip 4: In meetings, make participants aware of the complexity of the decision-making situation.

For example, before a strategy workshop with the executives in your company, illustrate to the participants with some examples,

• how complex the current decision situation is and
• that they must rely largely on assumptions when developing strategy.

Describe the worst case vividly - not to frighten the participants, but to show them how large the "scope of possibilities" is at the moment. Convey to them that, given the current situation, the strategy adopted can only be a provisional one that will be regularly reviewed and modified if necessary.

Tip 5: Present realistic scenarios to your colleagues and let them debate them.

As the leader of your organization, then present the most realistic scenarios from your point of view, together with the assumptions on which they are based, and outline the need for action that results from this. Then present these scenarios for discussion and, if they do not seem plausible to you, give your colleagues the opportunity to come up with alternative scenarios and strategies.

Tip 6:Agree on one or two realistic scenarios and have them worked out.

If possible, agree on the most realistic scenarios. Try to create a basis for decision-making that is as objective as possible - for example, by asking each other questions:

• What are the arguments for or against the scenarios?
• On what assumptions and preconditions is the potential success of the various strategic options and courses of action based? And:
• What investments require their realization?

Be aware: Even the most seemingly objective basis for decision-making is based on assumptions. Have the most realistic scenarios worked out (possibly in working groups) and derive possible action plans from this.

Tip 7: Actively assume your leadership role in the decision-making process.

Since strategic decisions often cannot be made by consensus in a diffuse environment, when the need arises, at some point one person has to say "This is how we do it..." or "This is the direction we are marching in, even if it involves risks A, B and C". This is not only your task as a company leader, your employees also expect you to take the helm and set the course in crisis and conflict situations.

Tip 8: Make strategic decisions calmly and not hastily.

However, because all eyes are on you, don't put yourself under too much pressure to make a decision. Instead, thank the participants for their support toward the end of the strategy meeting, for example, and then say, "I'll let you know my decision by the middle of next week," because: When it comes to post-crisis strategic decisions, there is usually no need for an immediate decision. The situation was different immediately after the lockdown, when the company's liquidity often had to be secured: In this acute situation, many decisions had to be made overnight. In the case of medium- and long-term strategic decisions, however, it is usually more expedient to wait a few days before making the final decision, because: Postponing opens up the opportunity for you and your colleagues to discuss the implications of the decision once again with people who have a different view of the subject matter of the decision, and thus to discover any (collective) "blind spots" in their opinion-forming and decision-making process.

Tip 9: Question your gut feeling again before making the preliminary final decision.

Postponing the decision also allows you and your colleagues to reflect again on why you prefer certain decisions. This is especially important in market upheaval situations. Ask yourself, for example: What motives, hopes cause me to make my preference? What are the underlying beliefs that may no longer be relevant? Decision-makers are often not aware of this when things get heated in a workshop, for example. However, with a little distance in time, this becomes clear to them. This often causes them to put their clear yes or no to certain options into perspective. This is why decisions can often be made more readily by consensus with a little time distance - which is important for their viability and implementation.

Tip 10: Review decisions regularly; don't hold on to bad decisions.

After you have made your decision, remind yourself as a team of the assumptions on which your decisions are based - for example, about how your market will develop. Then arrange appointments in which you can jointly review the extent to which

• your assumptions were correct and
• the measures you have initiated are purposeful.

This also makes it easier for the competitors who preferred other solutions to come to terms with the decisions, because they know: If they turn out to be wrong, they are either thrown overboard or readjusted.

To the author:
Dr. Georg Kraus is managing partner of the management consultancy Dr. Kraus & Partner, Bruchsal (www.kraus-und-partner.de). He is among lecturers at the University of Karlsruhe, the IAE in Aix-en-provence, the St. Gallen Business School and the Technical University of Clausthal.