Rethinking Business Execution: Leading In Volatile Times

Strategy is about making choices regarding what to do and what not to do. It’s about managing trade-offs, allocating resources, balancing competing priorities.

Behind every business success or flop, there’s a strategy that either worked or failed. So, one must be careful about which approach(es) to adopt.

One strategy approach that looks very promising is found in a new book by Dr. Rebecca Homkes. It’s titled Survive, Reset, Thrive: Leading Breakthrough Growth Strategy in Volatile Times.

To say the least, these are indeed volatile times.

Drawing on more than a decade of rich real-world business experience, Homkes offers a thoughtful guidebook for entrepreneurial leaders navigating today’s choppy economic waters.

In addition to her work as a high-growth strategy specialist, Homkes lectures at the London Business School, and serves on the faculty at Duke Corporate Executive Education. She received her doctorate from the London School of Economics and earned two degrees from Indiana University.

In a nutshell, the SRT (Survive, Reset, Thrive) framework is a three-mode interconnected loop that represents an organization’s growth journey through uncertainty.

Homkes says the SRT Loop guides leaders on how to Stabilize their businesses when there’s a shock, Reset (or change and adapt) their strategy as the situation changes, and then prepare to be a Thriving organization—or one that can consistently and successfully grow through any market condition. SRT, she says, is “a practical, pragmatic, and proactive playbook for leaders looking for breakthrough growth even when facing extreme uncertainty.”

Homkes explains the interconnected modes in this way:

• Survive: Proactive stabilization of the organization. This mode starts by preparing the organization to withstand system shocks by employing “steady-state” Survive or proactive steps taken even when markets are frothy. When a shock hits, the organization moves into “triggered Survive.” Here the “Survive Basics,” or the 4 C’s, are employed: Cash, Cost, Customer (retention, loyalty, stickiness), and Communication. These basics will not be enough, so “Survive Power Moves” must be employed. These include repurposing and partnering, strengthening employee engagement, building deeper customer moats, and finding and exploiting industry imbalances. The most critical move to transitioning from Survive is strengthening learning velocity.
• Reset: Reset is the power move of the SRT loop. This involves revisiting the growth strategy questions (What is the situation, and how will this change? What is success? Where should we play? How will we win? What could stop us? What should we do?), updating beliefs and assumptions, and preparing and enabling the needed change. Because they involve change, Resets are difficult for individuals and even more so for organizations.
• Thrive is the mode after the Reset when sustainable, repeatable, high-performance is achieved. Thrive comes from bringing the strong balance sheet from the Survive mode, the strategic insights from the Reset mode, and then executing with agility and learning.

Unlike many approaches to running and growing a business, the SRT strategy is employed as a continuous practice rather than as a checklist.

“Growth through uncertainty is a loop, not a line,” Homkes says. “One of the hardest things about strategy, and the jobs it gives leaders, is that it’s never ‘done’ and checked off.”

While a linear checklist feels easier to conceptualize, she says, it’s not what the real-world demands. “We may be in Survive, go to Reset, and then be in Thrive but then get kicked back to Reset, or even Survive,” she says. “These loops represent growth.”

Continuous loops, she says, are emotionally challenging. “Once you’re in the Thrive mode, you want to stay there. Embracing this as a loop you will cycle through “forces you to be heads up—acknowledging how the situation is progressing around you, and always watching for signs and signals that can bring new opportunities.”

Homkes says growth is a learning cycle with constant loops of testing, gaining insights, implementing and sharing, and iterating for improvement. “Linear models of growth neglect the realities of the changing world around us and lull us into a false sense of security,” she says. “Embracing the loop sets us up for the opportunities this approach brings.”

Homkes encourages leaders to stop planning and start preparing.

“In uncertainty, we can’t make perfect plans because we can’t predict what will happen. But we can prepare for what could happen,” she says. “Strict planning forces us to see change as bad, a risk to be catered for rather than a groundswell of possible new opportunity. Plans ask us to review regularly and pose the question: Are we on track? While this is a reasonable question, it assumes the plan has everything right, there is only one track, and no new information has become available. In uncertainty, those assumptions are usually wrong.”

She tells leaders that setting themselves up for success when facing uncertainty is hard because they can’t predict the future. “This makes the challenge one of how to master making great decisions, even though we can’t make great predictions,” she says. “It is the quality of decision-making that sets apart those who lead growth from those who barely survive, and a way to do this is to embrace preparing rather than strict planning.”

Homkes offers a few ways to do:

• Make decisions based on beliefs, not always waiting for facts
• Acknowledge the strategic situation is not fixed but still emerging, and you will need a probabilistic approach rather than strict linear planning
• Set a direction rather than a precise destination
• Understand the goalposts are moving, and you can only get clearer on the end state as you move and learn
• Optimize for robustness, not just efficiency

Preparation, Homkes says, shifts the perception of change from a risk to an opportunity. The shift to preparing helps support clearer decision-making instead of rash predictions. “It involves overcoming both hubris and fear to achieve decisiveness and adaptability,” she says. “It generates knowledge of what is currently unknown, which cultivates learning. And, companies that learn faster, grow faster.”

In a world of uncertainty, some leaders may find it difficult to set a finish line (or end goal) for their Reset. Homkes explains how leaders can provide clarity to their teams when the future is so hard to predict.

“Strategies need a finish line and a structure to provide decision-making along the way,” she says. “But a natural question is, If we are facing extreme uncertainty, how can define an end point? The paradox of uncertainty is the more you are facing, the more your team will beg for alignment. But the more uncertainty there is, the harder it is for leaders to give this! You don’t want to head straight for what could be the wrong destination, especially if your focus on getting there means you speed past the unforeseen opportunities along the way. Resolve this tension by determining if you need a destination or a direction.”

Destinations are appropriate, she says, when you have a relatively clear line of sight, when a clear outcome is needed to satisfy a stakeholder demand, or a major event is anticipated. “If instead you are facing extreme uncertainty, a business model shift, or disruptive innovation in your space, rather than setting a precise end-point, declare a general direction, or a compass heading instead.

She offers an analogy. “Think of the difference between taking a specific exit from the highway (‘We need to take exit 405 for Santa Monica’) versus setting a general compass heading (‘We are heading Northwest’).

Directions, Homkes says, provide the team enough clarity to spur alignment and motivation while avoiding anchoring to the wrong end point.

What are the telltale signs of an organization that’s in the Thrive mode?

“Getting to Thrive comes from combining the ingredients of a strong balance sheet from the Survive mode with the strategic insights from the Reset mode and then executing with agility and adaptive learning,” Homkes says. “Organizations that are in Thrive are differentiated in their ability to simultaneously achieve alignment, coordination, and adaptation.”

To describe Thrive, Homkes says, she wanted to move past generic truisms (have a strong leadership team or culture) or obvious points (focus on results) and instead codify the bundle of elements that power this differentiated execution approach.

To do so, she uses the acronym BLAST:

• Beliefs setting and testing: Make decision on beliefs, rather than always waiting for facts, and in execution perform parallel pathing of testing your beliefs, bringing these learnings into the strategic priorities.
• Learning Velocity: Learn faster, Grow faster—the ultimate differentiator of thrive is organizations that have a steeper rate of identifying, sharing, transferring, embedding, and using learning to further performance.
• Agility: Making good decisions quickly aligned with strategy.
• Shared Context: Build a common understanding of what matters, why it matters, and what is and is not working.
• Trust: Strong reliability of the network of performance commitments across the organization: Reliability provides adaptability for organizations.

Speed, Homkes says, is a differentiator in most markets. But the aligned speed at which Thrive organizations execute is the ultimate differentiator.