Complexity is the defining business and leadership challenge of our time. Since March of 2020, we’ve been talking to leaders about what it takes to lead through the most complex and confounding problems, including the pandemic. This is our third conversation with Jonathan Goodman, Global Chair of Monitor Deloitte and Vice Chair of Deloitte Canada. For close to three decades, Jonathan has worked closely with the CEOs, boards and executive management of a variety of global corporations on issues of strategy, growth, M&A, transformation, and executive transition. He originally joined Monitor in 1986, and co-founded Monitor in Canada in 1987.
David Benjamin and David Komlos: It’s a year since we last spoke and 18+ months into the pandemic. What’s your view of the situation facing businesses today?
Jonathan Goodman: I parse the answer to this question into three categories:
- Where we are in the course of the pandemic and the health context overall;
- The economic outlook and its uncertainties;
- The implications, pressures, and opportunities within and across industries and sectors.
We obviously can’t declare victory yet over the pandemic. There are too many unvaccinated people, too much transmission of the virus, and too much opportunity for new variants of concern (this interview happened before the Omicron variant emerged). Vaccine development and deployment is a modern miracle and a source of optimism, but no one really knows how the pandemic will progress, except to say that some version of it could become endemic.
The economic rebound around the world has been better than expected. But it’s now under pressure. There are other significant uncertainties as well: the potential persistence of inflation, energy shocks, supply chain disruptions, and problems regarding growth and indebtedness in China.
Some of the pressures or opportunities within and across businesses include the growth and persistence of digital commerce which has been forever amplified by the pandemic; major supply shocks which are likely more acute than chronic; and significant skill shortages across industries. Some industries are also on the cusp of long-term structural change. For example, new company policies and personal intent around business travel have profound implications for major airlines around the world.
Benjamin and Komlos: A year ago, you called this a “once-in-a-generation moment for strategy”. What’s your view today?
Goodman: We’re still in that moment. Given the dynamic, disruption-fueled, uncertain environment in which we’re all working, there is no version of a pre-pandemic strategy that could or should have remained fully intact and been successful. A few of my colleagues recently co-authored The Transformation Myth. In it, they argue that executives need to adapt to “a confluence of multiple inter-related disruptions that are interacting in complex ways”. All this says to me that we are still in the once-in-a-generation moment for strategy.
Benjamin and Komlos: Is this a moment or a continuous state of affairs?
Goodman: For strategy, it is a once-in-a-generation moment but it’s not strategy once-in-the-moment. Today, it’s all about being vigilant and intentional about strategy, evolving it sensibly over time—as opposed to going through a strategic reset once and being done.
Benjamin and Komlos: So, what does that mean for strategy now?
Goodman: It means several things. First, if you’re leading a multi-business organization, you have to scrutinize your corporate portfolio and ask if its make-up and weight of investment across businesses still make sense, with implications for where to invest, what to acquire, and/or what to divest.
Another is the requirement to understand and stay close to customers, their evolving needs, expectations, and habits—to understand what’s different about how they want to interact, what they want from companies, and the degree to which elements of safety have to find their way into value propositions. The pandemic created a forced break in customer habits, presenting complexity and opportunity around how to re-engage existing customers and acquire, serve, and excite new customers.
Third, is the necessity to integrate climate action into strategy. It’s foolhardy to say that you’ve got a corporate strategy separate from your leadership on, or response to, climate change. Corporate strategy and sustainability must be inextricably linked. The tying together of ambitions and purpose, the recognition of the expectations associated with de-carbonization, the building of sustainability into value propositions and supply chains, the investments to be made or foregone, stakeholder engagement on these issues—all of these have consequences now and cause real and complicated tradeoffs between investments that you make today and those expected by stakeholders in the future. No executive or board can pull these apart.
Fourth, it’s imperative to build dynamism and agility into your strategy. Saying “my strategy is to be agile” is an abdication of strategy. Building dynamism and agility into strategy is about being vigilant about the assumptions that underpin the choices you’ve made and are making. Do these assumptions still hold up to what you’re seeing and experiencing in the world? The best expressions of strategy are crystal clear about the assumptions that underpin choices. What’s more, the clock speed and enduring relevance of a strategy depends upon the pace of change in the industries or sectors in which you participate.
For me, all of this speaks to how vital it is to embrace and confront uncertainty in decision-making. As I have said before, it is critical to know what you know, know what you don’t and can’t know, and have the wisdom to know the difference.
Finally, a point on how to think about crises. People tend to anchor their thinking about the next crisis based on the previous one. But the next crisis—whether it’s rooted in shocks to infrastructure and security, a different type of financial contagion, or the jockeying for global supremacy between China and the US—likely won’t be another global pandemic. Embracing uncertainty means breaking from the anchoring bias of the past to imagine what events could massively impact your business in the future.
Benjamin and Komlos: Any parting thoughts?
Here’s my encouragement for executives and their boards today: Be clear about your assumptions, and confident in your choices. But always stay humble about your ability to know the future. In other words, the age of the occasional strategy is over; from here, strategy demands constant tending and care.
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December 13, 2021 at 06:00PM
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Implications, Pressures And Opportunities: 18+ Months Later, Your Pre-Pandemic Strategy Can’t Possibly Remain Intact - Forbes
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