Navigating the slippery slopes of uncertainty

Navigating the slippery slopes of uncertainty
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Rani Salman is the managing partner at Caliber Consulting, a UAE-based boutique consulting firm

As the evolutionary biologist Charles Darwin once said, “It is not the strongest of the species that survives, nor the most intelligent; it is the one most adaptable to change.” Contextualising his theory to the current business environment, this level of change has reached a zenith in the past few years with unprecedented socio-economic, political, medical, and technological disruptions impacting the globe at large.

The recent global disruption brought on by Covid-19 caused most businesses to face a level of uncertainty they had never accounted for, putting them, and particularly startups, in a unique position. On one hand, startups can be more agile than their larger and heavier corporate counterparts, yet on the other hand, they often lack the deep pockets, experience, and resources needed to make power moves, especially during tough times.  Often, however, the real difference-maker boils down to critical decision-making and the levels of agility embedded in that organisation’s DNA.  

Although the onset of Covid-19 was an unprecedented phenomenon, out of everyone’s control, startups in a natural steady state struggle to deal with internal and external realities. Even In a stable economic environment, they are prone to financial instability because the business model is not yet typically concrete and funding could be dependent on investors and capital ventures. Having a playbook to navigate the business landscape is crucial for startups and can help them either sink or swim when uncertainty reveals itself.  

Uncertainty can be a blessing in disguise, as it offers opportunities for businesses to reimagine their strategies, business models, and operating models to gain competitive advantage and propel growth in customer share.

The playbook revolves around four key steps and guiding principles, which when adopted effectively, help, and increase an organisation’s chances for success.

  1. Sense: Ensure your organisation’s antennas are high-powered and can sense a change in internal and external environments. This entails building a capability to see around corners and signal to detect risks and opportunities before they unfold, or before it is too late.

  1. Strategise: Quickly frame the strategy and business model once a trigger for change has been sensed.  Business model innovation revolves around entering new customer segments, business lines, product categories, or value chain integration. A good example of this was the first mover gin makers in Europe who quickly set up new production lines for hand sanitising alcohol on the onset of Covid-19.

Another key component of strategising involves scenario planning and laying out the various potential strategic options that could unfold and how to tackle them.  Creating a playbook for each of the scenarios keeps the team prepared for once the uncertainty becomes a reality.

Furthermore, hedging risk is often a good approach and ensures all your eggs are not in one basket, by having a diversification strategy focusing on multiple customer segments, business lines, and/or channels.

We can see the example of Airbnb, the decision-makers mobilised the product and took it to different customers in different regions, hence globalising efforts made Airbnb a tourism giant. This way when one market is unprofitable there are other channels that help sales and grow brand identity. Airbnb made a crucial decision to use the online platform to connect with customers and give them a comfortable traveling experience.

  1.  Select: Place your strategic bets and begin mobilising and implementing the needed strategic changes. However, in a world of uncertainty and dynamism, the implementation cannot be with a “big bang,” approach, and it is preferable to take a pilot, test, learned, adapt, and scale approach.    

Take for example Groupon, a feature in the startup app originally called ‘The Pointe’ which was essentially a crowdfunding site that allowed users to raise money to support causes that resonated with them; however, the website saw more traffic being generated by ‘Groupon’ than any other feature. The management took a decision to pivot when they realised the business was making a loss and launched Groupon as a standalone business venture.

Moreover, Snap bar, a small business that offered on-ground event services was particularly hit by the lockdown, however, they were quick to pivot and launched themselves as a gift box company that collaborated with local businesses. Snap bar is one example of a company changing quickly and adapting to the current environment. The lesson to be learned here is that management needs to strike strategic partnerships to build a sustainable business model when the opportunity arises.

  1. Sustain: Build true agility into your DNA by injecting it into all parts of your operating model i.e., the key components of your organisation like structure, people, management systems, technology, and most importantly culture.  Once your operating model is agile, this gives you a supreme advantage in adapting to uncertainty.  



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Globally there is a pall of uncertainty brought on by the political unrest in the West, due to this, many startup CEOs must adopt a conservative approach to get through a tough financial crunch. Startups rely on funding especially for the first few years until the business model starts generating steady profits. To ensure the business does not run out of money, startups can shift to the cash preservation approach, to make sure that the company survives until new and better fundraising opportunities arise. Tough but crucial decisions include: 

  1. Halting investments in new projects/products and services may have to be undertaken along with hitting a pause on expansion into new markets. 

  2. Dropping marketing and advertising costs, especially for on-ground initiatives which require a handsome monetary budget. Companies should consider moving to digital advertisements and leverage strategic partnerships that will help build the online presence and brand identity of the company (consider barter transactions). 

  3. Startups have a great opportunity to build an online presence and move away from the traditional ‘brick and mortar’ business setup – this saves costs of rents and utilities as well as allows companies to expand their geographical presence.

  4. Cultivating a culture of honesty and transparency in tough times is crucial as leadership will have to adopt efficient policies that minimise time wastage and give stricter targets which must be achieved in a shorter time frame. 

  5. Considering the option of paying for services with shares which will help with the current cash flow, this approach can also be taken to pay key employee salaries.

  6. Reworking job roles in the company and identifying vacant positions that do not need to be filled and allocating that budget elsewhere. 

  7. Last and perhaps the least favourable approach would be to strategise the company for downsizing and redesigning the organisational structure. 

Whether it is geo-political crises, global viruses, economic recessions, or other less significant changes; uncertainty now has become the norm.  Startups are in a unique position to flourish in this new normal as they can often be quicker to adapt and pivot. However, a playbook and guiding principles should be kept in mind for ultimate success.


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