ReThinking Uncertainty: Individually, in teams, and in organizations
ReThinking can help us escape uncertainty. Ironically, uncertainty makes ReThinking hard.
By Noam Bernstein
As the world began grappling with the dire effects of the COVID-19 pandemic earlier this year, we created the ReAct ReSpond ReThink framework to help decision-makers navigate the distinct phases of the crisis by applying an appropriate mindset. You can learn more and download the framework for free here.
Through webinars and workshops we have hosted worldwide, Designit has identified, tracked, and made sense of the many similarities in how businesses around the world have been experiencing the crisis.
Borrowing from Tomas Pueyo’s “Hammer and Dance” model, in the “Hammer” phase of the COVID-19 crisis, the ReAct ReSpond ReThink framework mirrors the actions companies need to take, in the following ways:
- ReAct is about identifying urgent solutions during the restrictive policies; speed and reliability outweighed cost.
- ReSpond is about balancing cost-cutting with quick-fixes to capture a shifted or a new demand.
- ReThink is about preparing for the “new normal”, whatever that might be.
These distinctions between mindsets helped us tailor offerings to phases, and they helped our clients define their needs. Interestingly, this pattern of similarities remained true after restrictions were eased and the lockdowns were released. Even then, different regions displayed trackable, time-shifted patterns of optimism and challenges.
As the crisis began to manifest as an economic slowdown, cross-nation similarities faded, as did the correlation between mindsets and phasing. The ReAct ReSpond ReThink framework was used to refocus on mindsets. Naturally, economics are more complex and multi-variate than epidemiology. The policies of New Zealand, Germany, Sweden, Israel, Spain, the UK, and the USA (locales of some of our offices) have been so different that nation-level similarities seemed to narrow down to the underlying epidemiology.
Yet, at the single company level, a pattern still seemed to emerge. The challenges companies have been facing were all driven by underlying mechanisms of government policy, industry structure, local ecosystems, and culture driving the interactions between these factors. In turn, culture and these factors affect the mindsets of individual company decision makers. The localized action-response-loop between external environment and internal reaction reminded me of Michael Porter’s The Competitive Advantage of Nations:
“In a world of increasingly global competition, nations have become more, not less, important. As the basis of competition has shifted more and more to the creation and assimilation of knowledge, the role of the nation has grown… Difference in national values culture economic structures institutions and history all contribute to competitive success… Ultimately, nations success in particular industries because their home environment is the most forward looking, dynamic, and challenging”
Of course, Porter could not have predicted COVID-19 when he ran his research between 1986 and 1990. In the 30 years since then, the world became digital and whole new industries were born; some countries experienced pandemics while others have not. Yet, the core ideas in Porter’s work — such as local ecosystems and cross nation synergies — are definitely worth revisiting at national and industry levels following COVID-19.
Even as national economic policies diverge, business leaders increasingly share a common factor of uncertainty.
At this moment, the vast majority of the world is suffering from uncertainty. This begins with the uncertainty of the virus contagion, but is unintentionally exacerbated by unpredictable quarantine restrictions, and inconsistent government support. Businesses are affected because their customers and their suppliers are. Faced with uncertainty of an unknown duration, customers are driven to reduce spending and conserve more to persist through this recession. Factored through entire value chains, this reaction to uncertainty is a huge force in slowing down investment and economic recovery at large.
In this uncertainty, the ReAct ReSpond ReThink framework helps business leaders shift between mindsets and stay creative.
Navigating future uncertainty is nothing new to business leaders; they normally take immediate action based on limited information. Switching mindsets is also a known skillset. In a single day, a leader may find herself moving from meetings impacting today, tomorrow, and months from now. Managers are adept and agile at switching mindsets.
However, heightened uncertainty combined with economic slowdown drives even the most capable of managers to anchor in short-term “ReAct” and “ReSpond” mindsets that don’t always benefit their organizations in the long term. This is especially when the long term requires creativity and experimentation. The ReAct ReSpond ReThink framework provides a terminology that we’ve found to be intuitive for business leaders to understand and integrate into their work.
We have observed the ReAct ReSpond ReThink framework at four levels — individuals, teams, processes, and organizations.
On an individual level
The ReAct ReSpond ReThink framework is an opportunity to become aware of your own mindsets and take control of them. Some individuals are inclined to want to take action even when more research might be needed. Others tend to think long term, even when immediate action is required. Recognizing your own and your peers’ mindset tendencies can help you understand their rationale, which facilitates conversations and collaboration.
Moreover, mindsets are an opportunity to expand creativity in strategy. Instead of tying ReAct mindset exclusively to short-term planning and ReThink mindsets exclusively to long-term strategy, it is meaningful to realize that the ReAct mindset has a place in long-term planning, and the ReThink mindset has a place short-term thinking. Once we shift from one-dimensional thinking to the two-dimensional thinking in which mindsets are perpendicular to horizons, we can see new ways of planning, which combine the short term and long term.
On a team level
ReAct ReSpond ReThink mindsets are an opportunity to form mindset-aligned teams. A team charged with short-term execution can be assembled from people who tend to ReAct or ReSpond. A team charged with the strategic experimentation could be composed of people with ReThink mindsets. Consider also mixing up teams with individuals who break the mindset tendency mold as devil advocate or creative challengers.
On a process level
Different work practices are governed by different mindsets. Mindsets are embedded into the most minute decisions such as team size, hierarchy, inclusiveness, approvals, and iterations.
In the beginning, this crisis required safeguarding employees and re-hauling systems. Leaders had to be decisive and act in broad strokes. As the situation evolves, managers should reevaluate if these policies, guided by ReAct or ReSpond mindset, hinder or enable the changes required of the organization. In The Competitive Advantage of Nations, Porter reflects on how effective leaders should guide changes in mindset:
“Too many companies and top managers misperceive the nature of competition and task before them by focusing on improving financial performance […] Today’s competitive realities demand leadership. Leaders believe in change; they energize their organizations to innovate continuously […] Most important, leaders recognize the need for pressure and challenge […] They are prepared to sacrifice the easy life for difficulty and, ultimately, sustained competitive advantage. That must be the goal, for both nations and companies: not just surviving, but achieving international competitiveness. And not just once, but continuously”
At an organizational level
Within organizations, uncertainty can be managed on different levels with different mindsets. Some parts of the organization may need to be in ReSpond mode for the foreseeable future — banding together to surmount a lengthy, uphill journey. Other parts of the organization may need to be deeply creative and experimental, to provide a new offering driven by an emerging customer need, the strategic pivot, or the internal disruption that was required but previously too risky (compared to the alternatives). Managers who are aware of mindsets can allocate teams that are optimized to the diverse needs of the organization.
Thinking ahead
ReThinking the future creatively while enduring uncertainty is not an easy task. It is natural for individuals, teams, and organizations to be ReActing or ReSponding in order to survive with short-term savings and quick fixes. But a shift to ReThinking, at team or organization levels, is crucial in order to identify growth opportunities and emerge from this global health and economic crisis poised for success.
