Dmitry Leus, a financial expert and businessperson with many years of experience, tells about the development and strategies for doing business in times of crisis. Why does the crisis act as a chance and opportunity for some companies and as a death warrant for others? What lessons need people learn from the crisis? What to make a focus on? What is the business strategy for choosing and when to make adjustments?

The topic of the crisis has been increasingly raised and used equally to justify the lack of results and explain the phenomenon of the intensive development of personal market segments or companies for 5 years. Some people bemoan the complexity of the situation and ask for additional subsidy programs, and others find internal reserves, change their strategy in time and feed into the market at the leading positions. All that has happened and happens with many Russian companies now is a natural result of the growing market, with a low share of competition and unstructured approach to both company management and so-called situational management. In other words, the market level allowed many companies to be a coward but remained profitable at the same time, and the direction of risk management was more like a trend than a service tool in some companies.

When ‘this’ (crisis) had happened, it became obvious and understandable who was ready for this, and for whom this news was like a death. It would be right to make sense of the notion ‘crisis’ and decide when it occurs.

Our first question has been to comment whether it is possible to avoid a crisis.

According to Dmitry Leus, any development and reaching a new level are possible only through a crisis. No matter how it sounds, this is just the case.

Leus states,”The crisis never occurs unexpectedly. It is just necessary to learn to see the harbingers of the crisis and respond to them in time. This phenomenon that is supposed to be a crisis is called force majeure by amateurs and a regularity by professionals.

The saturation of the market and the appearance of major and system players on it activate crisis phenomena, i.е. they act as catalysts of the crisis for others.

Bad established internal business processes, insufficient or excessive bureaucracy, ‘overseeing’ top management, the lack of the understandable and manageable development strategy for the company, unbalanced price policy, the staff overage, a low internal culture, and an uncivilized approach are the components of crisis phenomena in many companies.

Leus says that it is necessary to notice that global trends and tendencies affect the business, therefore they should also be taken into account. This situation is comparable with a frog, which people placed in the cold water and began to warm it up slowly. Many companies are like a frog. Having been in a crisis, they begin to be ‘boiled’, but either do not realize it or calm themselves by the fact that it is necessary to sit tight. Here, it is right to recall the theory of business development where any changes and growth are possible only through a crisis. If this crisis is managed, then the company moves to a new level and gets a competitive position. If it occurs because of the lack of necessary anti-crisis or stimulating actions, then there is a high chance that this company will not be on the market soon.

Dmitry claims, “Analytics, synthesis and the flexible strategy, which have a highness of responsiveness and feedback, as well as the professional management, allow minimizing risks and reorienting business and products to meet current market needs.

The second question has been about the conclusions that are necessary to be taken out of the crisis.

According to Dmitry Leus, if the top management of the company looks at the situation honestly and objectively and gives a valid estimate of its own decisions and actions without shifting responsibilities on the masses, then such a company has a future.

It is possible to make mistakes, make wrong decisions, make revolutionary decisions and use innovative methods. The main thing in this situation is that every member of the company understands its course.

Dmitry says,”Publicity and fairness are the basis for the development of the company and for the creation of a strong and professional team. The team that often does the impossible.

He also claims that both the flow and balance are the trends that determine the presence or absence of the future of the company. It is about the flow in assessing the situation and making the important decisions, the flow of the implementation of changes and the staff development.

Figuratively speaking, the crisis is a kind of examination, which the top manager of the company must pass. If he or she prepared and worked on this discipline diligently, then success is assured. Although in this case, it is necessary that the individual take into account the global trends and changes.

The last question is about the choice of the right decision during the crisis.

Leus states that there is no single and correct recipe for how to act properly during the crisis.

If it could be possible to separate it in three points, then they would be the following:

  • A flexible and adaptive strategy with a planning horizon of 1-2 years with the mandatory quarterly checkpoints 
  • The publicity management position and a culture of feedback in the company, thanks to which the important information necessary for making strategic decisions rises to the analytical center very quickly
  • The diversification of risks and business directions, a competent and balanced policy of support, a multifactorial analysis and synthesis of managerial decisions, a professional management and a team that understands and shares all changes in the company

It’s a mistake to assume that taking action is the biggest risk. In many cases, the riskiest action is in fact inaction. The pace of change in today’s world means that standing still leads to falling behind current and emerging competitors. The way in which many companies make investment decisions blinds them to this reality. Most executives know that the present value of an investment comes from projecting its cash flows and discounting those numbers into today’s dollars. The general rule is projects with positive net present values should get funded, and those with negative ones shouldn’t. That assumes, however, that the base case is zero. If doing nothing leads to decline, projects with marginal projections actually are better alternatives than inaction.

It’s a mistake to believe that good entrepreneurs seek out risk. They don’t. Good entrepreneurs recognize the inherent risk of creating new businesses. After all, it’s well known that most new businesses fail, and that most of the ones that succeed do so in modest enough ways that the entrepreneur gets at best a modest financial return on his or her effort. As Noam Wasserman noted in The Founder’s Dilemmas, “On average, entrepreneurs earn no more by founding startups than they would have earned by investing in public equity – less, in fact, from a risk-return perspective.” What good entrepreneurs excel at isn’t taking risk, it is managing it. Working with partners, raising money from a syndicate of investors, building a team, scrappy ways to earn revenue are all examples of smart risk management.

It’s a mistake to celebrate failure to encourage risk taking. offers a reasonable definition of risk as “exposure to the chance of injury or loss; a hazard or dangerous chance.” There can be no innovation without risk, as innovation necessarily has uncertain outcomes, some of which can be bad. Encouraging risk taking, therefore, can help to boost innovation. However, that doesn’t suggest a blanket endorsement of failure. In many cases, failure is bad. Sometimes people fail because they didn’t do their homework. Sometimes they fail because they lacked skills or hadn’t practiced enough. These categories of failure should never be celebrated. Rather, executives should recognize that the path to innovation success is never a straight line, so fumbles, false starts, and, yes, sometimes failure are part of the game.

It’s a mistake to think that rewarding success will boost risk-taking. Innovation-hungry executives at large companies often gnash their teeth about the challenges of compensation, lamenting that their system simply won’t allow them to offer the unbridled upside that awaits entrepreneurs at unicorns (which, in reality, are an incredibly rare breed). True. But that’s not really what holds innovation back in most companies. It isn’t the lack of rewards; it is the presence of punishment. Execution-oriented companies are used to rewarding people who hit their numbers and punishing those who don’t. But the uncertainty that accompanies innovation means that sometimes people will do everything right and still have a commercial failure. And if that result carries stiff punishment, don’t expect anyone to ever take any risk. While it is well known that quick wins build confidence in change efforts, companies seeking to build their innovation capabilities should have a quick loss, where a project gets shut down and everyone celebrates rather than looking for a scapegoat. It helps to signal that the company is ready to think and act differently.

VUCA, volatile, uncertain, complex, and ambiguous, describes perfectly what is happening in the global business world today. Business is not running as usual. Leaders must deal with growing uncertainty, complexity, and ambiguity in their decision-making environments. CEOs have little idea what to expect in terms of health care policy, financial transactions, national security, and global trade—all of vital importance to themselves, their employees, and their stakeholders.

Managerial training in the classic techniques of control systems, financial forecasting, strategic planning, and statistical decision making have not prepared them for this amount of flux in the environment.

In short, these rapid-fire changes are putting extreme pressure on business leaders to lead in ways not heretofore seen.

Now is the time for authentic business leaders to step forward and lead in ways that business schools don’t teach. Let’s examine these different ways of leading comprising VUCA 2.0:

Vision – Today’s business leaders need the ability to see through the chaos to have a clear vision for their organizations. They must define the True North of their organization: its mission, values, and strategy. They should create clarity around this True North and refuse to let external events pull them off course or cause them to neglect or abandon their mission, which must be their guiding light. CEO Paul Polman has done this especially well by focusing Unilever’s True North on sustainability.

Understanding – With their vision in hand, leaders need in-depth understanding of their organization’s capabilities and strategies to take advantage of rapidly changing circumstances by playing to their strengths while minimizing their weaknesses. Listening only to information sources and opinions that reinforce their own views carries great risk of missing alternate points of view. Instead, leaders need to tap into myriad sources covering the full spectrum of viewpoints by engaging directly with their customers and employees to ensure they are attuned to changes in their markets. Spending time in the marketplace, retail stores, factories, innovation centers, and research labs, or just wandering around offices talking to people is essential.

Courage – Now more than ever, leaders need the courage to step up to these challenges and make audacious decisions that embody risks and often go against the grain. They cannot afford to keep their heads down, using traditional management techniques while avoiding criticism and risk-taking. In fact, their greatest risk lies in not having the courage to make bold moves. This era belongs to the bold, not the meek and timid.

Adaptability – If ever there were a need for leaders to be flexible in adapting to this rapidly changing environment, this is it. Long-range plans are often obsolete by the time they are approved. Instead, flexible tactics are required for rapid adaptation to changing external circumstances, without altering strategic course. This is not a time for continuing the financial engineering so prevalent in the past decade. Rather, leaders need multiple contingency plans while preserving strong balance sheets to cope with unforeseen events.

With external volatility the prevalent characteristic these days, business leaders who stay focused on their mission and values and have the courage to deploy bold strategies building on their strengths will be the winners. Those who abandon core values or lock themselves into fixed positions and fail to adapt will wind up the losers.

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