Forethought: the most important quality for leaders of fast-growing SMEs

‘Foresight – the ability to judge correctly what is going to happen in the future and plan your actions based on this knowledge.’

Although leaders on the growth journey must possess many qualities, I would argue that foresight is the most important quality in the current climate.

In fast-growing businesses that already have a critical and committed mass of employees, and have enjoyed past success, without foresight, everything that has been built to date is in jeopardy.

I don’t think anyone will disagree with me when I say that leading a 50–250 FTE small business is a tricky job.

As a leader, you must be the captain of the ship, ensuring it is staffed, well maintained, run efficiently, meets regulatory standards, and serves its customers.

You also have to be on the bridge looking out to spot islands of opportunity, rogue waves, icebergs and competitive torpedoes!

I have nothing but admiration for business leaders during the past few years as they try to navigate their organisations in such turbulent times.

Alongside operational excellence, I believe that businesses should seek to enhance their adaptability, agility, and resilience to all external environmental events, not merely the most recent threats they are presented with.

Businesses should, as a matter of course, consider how to strengthen their internal operating structure to meet external events.

Leaders, as the captain of their ships, have always been required to keep a look out on the horizon.

The company’s unique and ambitious journey means that contact with external events is inevitable on the voyage.

How a leader reacts to these events and coordinates the response of their company to them can mean the difference between its death, survival or prosperity.

Navigating the changing landscape is an important core skill of the leader.

It is not always easy to spot an external event that could move in your direction and that requires action.

If you look out from the bridge of your metaphorical ship and spot a tsunami coming towards you, it is easy to point the ship in the direction of the wave and seek to ride it out.

Single, uncomplicated events, like a change in legislation or the loss of a supplier, are perhaps less challenging.

In today’s environment it sometimes feels that the ship is in an unpredictable rainstorm!

The waves and wind from external events are blowing from many different changing directions at once.

No sooner do we think we have navigated one event than another is upon us in short order with little time to react.

In these conditions, it is harder to discover exactly what is travelling in your direction and, accordingly, how to steer to avoid the worst.

Recent examples have included Brexit, the Covid pandemic, environmental events (floods, moorland fires, adverse weather conditions) and the war in Ukraine.

These events are not only large-scale but cause wave after wave, and the direction of some of these waves is harder to judge.

As I write we continue to experience Putin’s invasion of Ukraine.

On top of the massive and tragic humanitarian crisis that this invasion has caused (death and injury on both sides, civilian casualties, refugees, and destruction of vital infrastructure (water, power, nuclear, oil and gas)) we will also feel additional knock-on events in the weeks, months and possibly years to come.

Although many of these knock-on events cannot always be accurately predicted, in terms of timing, duration, and economic impacts on business, we can at least estimate the likelihood and magnitude of their impact and, therefore, mitigate the effect they could have on our businesses.

It is not enough to spot the wave; we must estimate its chance of affecting us, and take actions to minimise its disruption.

However, even this is not enough.

Today’s world brings fast-moving changes that need to be responded to equally quickly.

Although a leader can spot waves and bring the ship around to meet them, the crew should also be in a position to function as an early warning system and help alert those who need to make decisions to change course.

They might even have to play a role in the steering too.

Forearmed is forewarned: the Foresight process

1. Before you set sail. The nature of today’s journey is that multiple external events can happen at once.

The magnitude, duration, and impact of these cannot always be predicted.

Even when predicted, our estimates may not be 100 per cent accurate, and we need to cope with the unexpected.

Before we embark on our adventure, we should construct the best ship and crew we can.

The ship and its systems and processes must be as efficient and streamlined of bureaucracy as possible but without being reckless; there is no point having ‘forms to fill out’ when the boat is sinking, but we still need to observe the laws of the sea.

The crew needs to be aware of the challenges that might come up, what might be expected of them, and how they can take positive action on a day-to-day basis to help ensure the journey is a successful one, even when the waves are mounting.

2. Spotting the wave. Keep your eyes and ears open for news and changes in the market, keep in touch with your industry networks, gauge their reactions to external events, see how they are preparing, and talk to suppliers and customers. Rely on and place your employees in positions where they know they can react and act when events become pressing and time is of the essence.

3. Estimating the impact. Your systems are usually optimised for today’s conditions, but how would they perform in a change of circumstances?

For example, a loss of supplier, a change in raw materials availability, quality, or cost, loss of key workers.

Crucially, how would your employees react? Would they feel empowered and capable of taking preventative action quickly to limit damage?

Can we practise these in the dry dock before we set sail?

Can we put systems in place that are flexible enough to cope with change at pace when an event occurs?

4. Mitigating the effect. Employees may know more about the external event, in a shorter timescale than the leader does.

They are on the frontline for many events and the interface between the business and the external environment.

What better way to ensure you are ready for an event than having your frontline personnel briefed, confident, and ready to react without waiting to be told word for word what to do?

Why not trust those employees who are also on board the ship if they recognise that something wrong is happening?

After all, if they are properly informed and prepared, they will recognise that the journey they share cannot be completed with a half-submerged or sunken boat!

How do leaders put such a system in place?

Preparing your organisation and its people for external events that may impact the success of the business is an important role of the leadership team.

It requires careful thought, input from your people, specialist insight, experience, and a practical system to prepare everyone for what lies ahead.

My winning formula six-stage approach will help you and your leadership team to identify and navigate the challenges likely to be faced on your unique growth journey.

The time-saving, empowering and award-winning approach will enable you to implement an early warning system within your business’s operational workings.

The process will also improve your leadership and navigational skills.

More importantly, it will help you and your colleagues to create an agile, successful and sustainable organisation.

Why not contact me to hear more about our approach and discuss the results achieved with leaders of other similar fast-growing businesses?

Best wishes on your journey, wherever it may take you.

Regards,
John Stein, Founder of the Winning Formula.