How to Make Your Business More Flexible During Uncertainty

In today‘s unpredictable business environment, the ability to adapt to shifting circumstances is not just advantageous – it‘s essential. Black swan events like the COVID-19 pandemic, trade disruptions, and rapid technological change can upend even the most carefully laid plans. As the saying goes, "No plan survives first contact with the enemy."

But while we can‘t fully predict or control external events, we can build organizations that are better equipped to handle them. Flexible businesses are able to pivot quickly when faced with new challenges and opportunities. They don‘t just survive periods of uncertainty, but often emerge from the chaos stronger than before. In fact, a 10-year study by BCG found that companies in the top quartile of organizational agility averaged 13% higher operating margins than their less nimble peers.

So what exactly does business flexibility look like in practice, and how can you cultivate it within your own company? Here are some key strategies to consider:

Reassess Priorities and Resource Allocation

The first step to increasing flexibility is recognizing that your pre-crisis plans may no longer be optimal or even feasible. Rather than stubbornly adhering to obsolete goals and projects, agile organizations quickly shift resources to meet new realities.

Consider this framework from Bain & Company for triaging priorities during uncertain times:

Strategic Importance Immediate Viability Action
High High Double Down
High Low Restructure
Low High Sustain
Low Low Divest

By ruthlessly assessing both the short-term viability and long-term importance of initiatives, you can make hard but necessary trade-offs. For example, early in the pandemic, many retailers quickly redirected resources from brick-and-mortar growth to ecommerce capabilities. Gymshark was able to increase online sales by 30-35% by expanding their direct-to-consumer channels.

It‘s also critical to reevaluate your KPIs and targets. According to a Gartner survey, only 51% of employees felt their performance metrics were relevant during the pandemic. Be willing to adjust goals based on new benchmarks and evolving customer needs. The sooner you align your team around what success looks like now, the more focused and productive they will be.

Strengthen Transparency and Trust

During periods of heightened uncertainty and stress, employees need more communication and visibility, not less. Lack of transparency from leadership can lead to anxiety, disengagement, and loss of valuable talent. On the flip side, a Gallup study found that companies with high employee engagement are 21% more profitable.

Some tips for building trust and psychological safety during difficult times:

  • Communicate frequently and consistently. Share what you know, what you don‘t know, and what you‘re doing to find out more. Use multiple channels (email, chat, video, etc.) to reinforce key messages.

  • Be human and empathetic. Acknowledge the challenges employees are facing and how the company is working to address them. Create forums for two-way dialogue and active listening.

  • Involve employees in problem-solving. Solicit ideas, delegate decision-making authority, and empower cross-functional teams to collaborate on solutions. Engaged employees are 57% less likely to leave their organizations.

  • Model flexibility and adaptability. Leaders set the tone for the entire company culture. Embrace an open, learning mindset and be receptive to new ways of doing things. Celebrate pivots, even if they don‘t pan out.

For example, Spotify has long embraced a philosophy of "radical candor" to maintain transparency. During the pandemic, they increased the frequency of CEO communications and expanded employee resources for mental health. They also involved employees in major decisions like when and how to return to the office. As a result, engagement scores remained high and attrition rates stayed below pre-pandemic levels.

Embrace New Ways of Working

Old habits and processes may no longer serve you well during times of disruption. Flexible companies are willing to challenge the status quo and experiment with new ways of collaborating and creating value for customers.

The rapid adoption of remote work in 2020 is perhaps the most dramatic example of this. While telecommuting previously had mixed reception from executives, social distancing requirements made it a necessity. Companies quickly adapted their technology, communication norms, and management approaches. Productivity remained stable or even increased, and a majority of employees now desire permanent remote work options.

Other examples of embracing new ways of working:

  • Accelerating digital transformation initiatives and migrating to the cloud
  • Adopting agile methodologies like scrum to speed up product development cycles
  • Shifting from just-in-time to just-in-case inventory management
  • Creating rapid response teams to handle emerging threats and opportunities
  • Moving from siloed hierarchies to fluid, project-based structures
  • Expanding employee learning and development programs to close skill gaps

The most important factor is fostering a culture of continuous improvement and experimentation. By making flexibility a core competency and empowering employees to innovate, organizations can turn volatility into a competitive advantage.

Strengthen Business Foundations

While it may seem counterintuitive to focus inward during external crises, shoring up your operational capabilities is critical for maintaining business continuity. Efficient, resilient processes and systems create stability and confidence even when strategies need to change.

Some foundational areas to assess and optimize:

  • Digital infrastructure and cybersecurity: Ensure employees have secure, reliable access to the tools and information they need to work productively from anywhere. Implement rigorous data governance and recovery protocols.

  • Automation and artificial intelligence: Identify manual, repetitive tasks that could be handled by bots or algorithms. Streamline workflows and redeploy human talent to higher-value activities.

  • Supply chain diversification: Expand your supplier networks and logistics capabilities to derisk disruptions. Conduct robust scenario planning to model impacts and develop contingency plans.

  • Cross-training and upskilling: Provide opportunities for employees to expand their knowledge and capabilities outside their core roles. Create talent mobility programs to deploy skills when and where they are needed most.

According to PwC, companies that made investments in these areas before the pandemic were better positioned to adapt to new challenges. To cite just one metric, businesses with advanced digital capabilities saw 17% revenue growth during the crisis, while less mature organizations experienced a 5% decline.

By proactively strengthening your organizational foundation, you create greater capacity and agility to navigate uncertain times.

Learn from Leading Companies

Highly flexible organizations offer valuable lessons for companies looking to increase their own agility. Some examples:

  • Alibaba: The Chinese ecommerce giant was able to quickly pivot to meet skyrocketing online grocery demand during the height of the pandemic. They scaled their existing Freshippo delivery platform to handle up to 3 million orders per day, a 300% increase from pre-outbreak levels. By leveraging their robust logistics network and partnering with thousands of local stores, they captured significant market share.

  • Qantas: Like most airlines, the Australian carrier saw travel demand plummet in 2020. But rather than just hunkering down to weather the storm, they identified alternative revenue streams. These included renting out idle aircraft to the Australian military, launching scenic "flights to nowhere," and selling care packages made from unused snacks and amenity kits. They also took the opportunity to restructure operations, negotiating new union contracts and accelerating the retirement of older, less efficient jets.

  • Target: In the span of just a few weeks, the retailer shifted its operating model to provide safe options like curbside pickup, same-day delivery, and dedicated shopping hours for high-risk customers. They also changed their merchandising and marketing mix to focus on in-demand categories like food, cleaning supplies, home office, and loungewear. As a result, they grew sales by 30% and profits by 80% in Q2, while many competitors struggled.

  • Unilever: The consumer goods company has long embraced agility, with a goal of cutting innovation lead times in half. When the pandemic hit, they were able to quickly scale production of essential hygiene products while maintaining employee safety. They also redeployed over 2000 staff to high-priority roles and created a €500 million emergency cash fund for suppliers and service providers. By protecting their entire ecosystem, they were able to recover faster and outperform peers.

These companies demonstrate that flexibility is not just about reacting quickly to change, but proactively capitalizing on new possibilities. By cultivating a culture of agility during "peacetime," they were able to mobilize more effectively when crisis struck.

Leading Through Change

As a business leader, your ability to navigate and communicate change sets the tone for your entire organization. Some tips for guiding your team through uncertain times:

  • Balancing realism and optimism. Be transparent about challenges, but also highlight progress and reasons for confidence. Celebrate wins and lessons learned.

  • Modeling adaptability. Solicit feedback, admit mistakes, and demonstrate comfort with course-correcting as needed. Show that it‘s ok to not have all the answers.

  • Empowering decision-making. Resist the urge to become more controlling during a crisis. Trust your team and delegate authority to those closest to the action.

  • Staying connected. Make time for one-on-one conversations, town halls, and pulse checks. Listen more than you talk.

  • Investing in your own resilience. Prioritize mental and physical wellbeing so you can show up as your best self. Don‘t hesitate to ask for support.

Leading through uncertain times can be stressful and draining. But by embracing a flexible, growth-oriented mindset and empowering your team, you can help your organization emerge stronger. As former PepsiCo CEO Indra Nooyi once said, "I don‘t think of myself as a powerful person. I think of myself as a change agent."

Future-Proofing Your Business

In an increasingly volatile, uncertain, complex, and ambiguous world, agility is becoming a key competitive differentiator. BCG research shows that companies with high levels of flexibility grow revenue 8x faster and have double the profit margins of less adaptable peers.

Building business flexibility isn‘t a one-time initiative, but an ongoing journey and organizational capability. It requires a fundamental mindset shift from rigid planning and prediction to continuous iteration and learning. Some long-term strategies to consider:

  • Making agility a core value and key leadership competency
  • Implementing OKRs and other goal-setting frameworks that balance alignment with adaptability
  • Adopting design thinking to continuously uncover and address evolving customer needs
  • Leveraging data and analytics to detect market shifts and inform decisions
  • Building diverse, distributed teams to access broader networks and perspectives
  • Partnering with startups, academia, and other external innovators to stay ahead of disruption
  • Investing in modular, API-based technology architecture to enable faster pivots
  • Developing contingency plans and scenario models to derisk multiple futures

The businesses that can absorb shocks and redirect resources toward new opportunities will be best positioned for long-term success in an uncertain world. By cultivating flexibility today, you give your company the greatest chance to shape tomorrow.