Don Sull of the London Business School spoke with me recently about his new book, The Upside of Turbulence: Seizing Opportunities in an Uncertain World. In the first installment of our conversation, Sull defined “turbulence,” and in the second post he discussed how Nokia took advantage of turbulence to redefine itself as a company. Today he explains how managers at all levels of a company can take advantage of opportunities that arise from turbulence.
BNET: The are other books out there about surprising event and how they can affect business, including The Black Swan by Nassim Taleb. What specific new angles does The Upside of Turbulence bring to the discussion?
The bulk of my book talks about “what do you do?” in turbulent markets. Taleb’s focus is: As an investor, how do you deal with turbulence? The focus of my book is: as an executive or a manager or an entrepreneur, how do you deal with turbulence? The thing about stock market trades is that you can reverse them overnight; there’s no stickiness. But imagine if you are, say, Micky Arison running a cruise line. Your cruise ships last 35 years. Your brand takes you decades to build. You can’t reverse your decisions so quickly. When you have long-lived assets like brands, technologies, patents, physical plants, and employees, it’s a very different dynamic.
There have been a lot of books about how you manage risk — how you cope with the potential downside of unstable markets. But I don’t think there have been quite as many that focus on the opportunities that arise from turbulence.
BNET: How can a midlevel manager — who can affect company practices but is not necessarily “helming the ship” — take advantage of turbulence he sees?
Sull: I wrote this book to make it scalable to folks at different levels of an organization. Some lessons are focused on people in the C-Suite, but there are a set of things that you can do if you are running a business unit, a function, or a region. One of the points I raise in the book is about the need for agility. There are three different types. The first is operational agility. Within your business unit there are steps you can take to seize opportunities to grow revenues and cut costs. The second type is what I call portfolio agility. That means pulling resources out of less productive or promising ventures and putting them in more productive opportunities. The third is strategic agility. Periodically the environment throws golden opportunities your way — to acquire a competitor or enter a new market, for instance — and you need to be able to see and seize those opportunities.
You see those opportunities at all levels of an organization. Even with portfolio agility, which some people say is a headquarters responsibility. But every manager is making portfolio decisions of some sort; they’re just smaller. And you’d be surprised at how mid-level folks can affect strategic agility. They can often start the ball rolling for some type of acquisition when they see, say, a competitor on its heels.
If you rely on only the CEO to drive agility in your organization, you are dead. You’re not distributing both the responsibility and the decision-making to take the actions to thrive in turbulent markets. And, if you’re a big, complex organization, you are dead.
When I teach these concepts in a boot-camp format, about one-third of the attendees are CEOs or managing directors of organizations — but two-thirds aren’t. You can apply these tools at any level of your business quite productively.
We’ll conclude our discussion with Sull next week as focus on how managers can adapt their organizations to take advantage of turbulence and the role of luck in business.
