In Russia, continued sanctions and falling oil prices force leaders to answer existential questions: do we cut costs to survive the short-term (and hope the good times come back again soon) or do we accept that today’s business climate is the new normal and adapt?  

Perhaps unsurprisingly to those who’ve been doing business in Russia a long time the bias is towards the former.  Yet the longer the ‘lock-down’ goes on the sooner someone will take the snake by the tail and start to exploit disrupted industries to their advantage.

In reality this is already happening and those who wait too long to react will get left behind.

Whilst not traditionally a core driver of Russian business HR has been placed under extraordinary pressure in recent years to prove it’s more than just a cost centre.  It must also do this with less resources than ever and it’s currently ill-prepared to cope.

In an excellent book looking over a decade of research as to what drives real, top and bottom-line performance two McKinsey partners highlight how the same old questions leaders ask of HR are often at fault for producing the same old answers:

1. How can we quickly improve our performance?
2. How can we avoid known pitfalls as we transform ourselves?
3. How do we create a culture that lets us constantly adapt to a rapidly changing world?
4. How do we ensure these performance improvements last?

If these questions sound familiar your organisation might be in more trouble than you think!

The need to measure everything as a form of scientific proof has led HR to develop tools and processes that ape the work the hard functions like finance and operations do. But humans are not resources like capital and goods: they are irrational and unpredictable but also versatile and creative; the very skills now needed to pull organisations out of trouble.

HR must discover a way to work with the way people really are, rather than how they want them to be to unlock new answers to old questions:

1. To sustain high performance, don’t make performance your primary focus for an organisation’s health—its ability to align, execute and renew itself—is equally important
2. The “soft stuff” can (and should) be managed as rigorously as the “hard stuff” for the old maxim that ‘what you can’t measure, you can’t manage’ is wrong.  ‘What you can’t measure must be managed’ and radical new tools exist for precisely this
3. Copying best practices can be more dangerous than helpful for “best practices” are specific to a certain group of people at a certain time and place - you have your own recipes, with your own unique ingredients to work out
4. Common sense will often lead you astray because as much as we might like to think people are rational, predictable resources - they aren’t. You must deal with it!

Sanctions have been extended and the oil prices have dipped back to three month lows. So, what are you (and your organisation) going to do next?

Do you cut again - or did you already strip away some flesh with the fat last time and now risk going into the bone?

Short-term survival is of course key to long-term prosperity, but how can executives balance the needs of an uncertain tomorrow with the real threats of a volatile today?

While evidence-based reasoning - defining problems, breaking them down into parts, analysing information and solving them - got the executive this far, today’s increasingly uncertain and unpredictable world resists such logical approaches.  

What then must leaders do?

Leaders must add another bow to their quiver - taking a radically new approach to addressing issues of volatility, uncertainty, complexity and ambiguity.

Over the summer we’ll be blogging in preparation for a major autumn event that will widen leaders’ lens on their landscape to discover the real issues they must prioritise.

We will be introducing a radical leadership model: Data - Insights - Perspective - Action to help businesses make sense of the challenges they face, so they act more effectively.

Stay tuned for updates on how to:

1. Address your toughest business challenges
2. Collect data that unlocks fresh perspectives
3. Discover opportunities (and threats) quicker than rivals
4. Rapidly and cost-effectively test new ideas
5. Impact the bottom line through new competitive action

For more information contact me at: marcusguest@narrativeinsights.com