In the first half of 2020, the business environment suddenly became undeniably uncertain because of the coronavirus. Companies have been forced to re-examine almost every part of how they operate: how successfully can the company’s business model and its current employees cope with the restrictions imposed by the pandemic? Do the products and services it provides meet the needs of the pandemic and post-pandemic market? Can its current employees adapt if the company has to pivot?
Many conventional management principles followed by leaders today were developed from looking at how companies succeeded in more stable and predictable business environments. So are these conventional management principles appropriate for an uncertain business environment?
Rethinking management principles
Companies using conventional practices are usually well adapted to a specific set of business conditions. This is great in stable, predictable times. Unfortunately, these companies are usually fragile in uncertain times: if the specific conditions to which they are well adapted suddenly change, the company cannot flex and adapt in response.
This kind of uncertainty and unpredictable change is increasingly common – and will become more so as the business environment becomes more complex and interdependent, and more susceptible to unexpected shocks… such as a coronavirus pandemic.
For companies to survive and thrive under uncertainty, current management processes have to change and adapt. They need to adopt a management approach which assumes that the world is at least partly unknowable and acts based on that assumption – what I call ‘the uncertainty mindset.’
- Redesign employee job roles to be modular (not monolithic)
- Set expectations that employee roles will continually change and evolve (instead of remaining static)
- Choose to pursue open-ended goals (instead of only clearly specified goals)
- Use well-designed concrete work to train employees (rather than only abstract training programmes)
- Motivate innovation work with carefully chosen sticks (not only with carrots)
- Design projects to progressively challenge employees and teams (instead of only allowing them to remain in their comfort zones)
Is your hiring process stuck in the 1950s?
Hiring in most companies goes like this: start by developing a very detailed job description, then recruit a lot of plausible applicants, then filter applicants carefully with tests and interviews. The goal is to eventually identify and hire the people who best fit the job description.
The result is teams of employees highly adapted to the particular demands facing their respective companies when they were hired. This worked well when business environments were stable and predictable – an employee’s roles and responsibilities were clear from the beginning and didn’t change much over time.
However, the hiring problem today is fundamentally different. Increasingly, the work that really matters is about being able to respond to unexpected demands and changes in the environment. The employee’s role isn’t fully clear at the outset, and it changes over time. Conventional hiring, bluntly, is unsuited for uncertain business environments. Yet this conventional way of hiring people is the default everywhere.
Negotiated joining is one way forward
One alternative to conventional selection-based hiring processes is what I call ‘negotiated joining,’ where each potential new member joins the company with part of their role left explicitly undefined and therefore partly uncertain.
They negotiate this undefined part of the role by testing – actually trying out – minor responsibilities. It’s explicitly understood that the role evolves over time, being built up through multiple successful tests instead of being predefined even before they applied for the job. The resulting employee roles change continually in response to changing demands on the company – they adapt naturally, and so the company adapts naturally as well.
While negotiated joining may sound chaotic, it is in fact counterintuitively simple in practice. Companies including ThinkFoodGroup and Google have been using negotiated joining in their most innovative teams for years.
The uncertainty mindset
I’ve seen firsthand how the uncertainty mindset helps businesses adapt and succeed in industries ranging from hospitality to high tech. Changing how hiring works to incorporate uncertainty is just one example of how adopting the uncertainty mindset can change management practices and create more adaptable and innovative companies. This unconventional, counterintuitive approach is what businesses need given the challenges that lie ahead.
Vaughn Tan is author of The Uncertainty Mindset and assistant professor of strategy and entrepreneurship at University College London’s School of Management