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Now we are living in a new abnormal, how does a board equip itself for unknown unknowns?
In the early days of the pandemic there was a lot of talk that life, as we knew it, might be about to change, perhaps forever. People talked about the new normal. Three years on, it seems the more apt expression might be the new abnormal.
Each passing month has brought a fresh shock, a fresh upheaval, something new to upend the smooth order of things: a global pandemic, a war in Europe, geopolitical tension in Asia, weather events, earthquakes and cyber threats. Each has to some degree had an impact on our people, our customers, physical assets, and our ability to do business. In an increasingly globalised and interdependent world, there is almost no such thing as significant change that will not affect your organisation.
And each passing month seems to bring more. We know climate change and adaptation, technological disruption and a rebalancing of the work environment are certainties. They are the known unknowns, to use the Donald Rumsfeld formulation.
But the unknown unknowns – the ones we haven’t yet thought about – may bring the largest convulsions. For a board, they stand to demand the most of all: the most adaptation, the most agility.
How does a board equip itself for unknown unknowns? A relevant articulation, credited to Charles Darwin but probably not his words, is this: “It is not the strongest of the species that survives, nor the most intelligent. It is the one that is most adaptable to change.”
In this new state things, in this new abnormal, what will make a board most adaptable? How does it develop the agility necessary to adapt to constant change? Let’s consider some possibilities both for preparation and for execution.
At least half of the challenge is mindset. There will be challenges and upheavals you simply can’t yet anticipate. You need to know your board will have the competence and capacity to deal with them. In assessing your preparedness, you might ask the following questions:
“Boards need perspective that can’t be achieved if you are in the weeds. Your role is to identify the issues that need decision, the information you need to make them and the levers to ensure decisions are implemented when they are made.”
When change does come, and it will, how do you respond? Even a well-prepared board will face challenges it did not expect. What you do now matters. Here are some key considerations:
It used to be often intoned in political and economic debate that business craves certainty. That may still be so, but we can no longer expect it. In this new abnormal, these issues have become more than what a good board should do. Expecting, and being prepared for, the most unexpected has now become basic best practice.