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Crowe Global’s Art of Smart content aims to inform and inspire business leaders to make smarter decisions. It is founded on four pillars: boldness, growth, innovation, and diversity. The quartet of business factors is under threat in this post-pandemic era, where geopolitical issues, supply-chain challenges, and advances in artificial intelligence collide against economic uncertainty. So the insights offered here could be business-critical.
“Polycrisis” is a term popularized by Adam Tooze, an economic historian at Columbia University, in 2022. The following January, the World Economic Forum’s Global Risks Report 2023 explained how “present and future risks can also interact with each other to form a ‘polycrisis’ – a cluster of related global risks with compounding effects, such that the overall impact exceeds the sum of each part.”
In addition to dealing with a polycrisis, the dark clouds of a global financial crash are looming, so it’s understandable that leaders’ anxiety levels are rising. But are this pace of evolution and the multitude of crises likely to decrease any time soon? Indeed, as historian Niall Ferguson said of the concept of a polycrisis: “It’s just history happening.”
Crowe LLP’s Executive Outlook Study, published in April in collaboration with Forbes, surveyed over 1,000 executives from organizations with at least US$500 million in annual revenues, and almost half—43 percent—reported that disruptions and market volatility had weakened their business.
According to the research, the leading source of volatility among executives was overall economic change—inflation and the threat of a global financial crash—with 40 percent. Currently, supply chain (38 percent), talent (37 percent), financial risk (35 percent), and geopolitical change (34 percent) were next on the list.
However, by 2025, the executives expect the leading sources of volatility to be different: financial risk (45 percent), overall economic change (44 percent), talent (43 percent), geopolitical change (42 percent), and supply chain (41 percent). Notably, all sources rise in percentage, meaning greater volatility is expected.
Clearly, business leaders must embrace volatility, drive innovation, balance short-term needs with longer-term planning. First, a calm, growth mindset is required to lead in a world where change is the only constant in these uncertain times.
Leaders could learn from the opportunism of John F. Kennedy. The 35th president of the United States knew plenty about handling pressure in uncertain times. JFK commanded patrol torpedo boats during World War II, was at the helm during the Cuban Missile Crisis, and signed the first nuclear weapons treaty a month before his premature death.
What would the youngest-serving U.S. president have made of modern-day pressures, not least the advancement of artificial intelligence in the post-pandemic world? Kennedy’s observation that “the Chinese use two brush strokes to write the word ‘crisis’” is perhaps apposite. “One brush stroke stands for danger; the other for opportunity,” he explained. “In a crisis, be aware of the danger—but recognize the opportunity.”
Traditionally, business leaders have run organizations on instinct, personality, and a lack of adaptability. Now, though, those at the helm have to plan for change and disruption, not for perfection. Leaders should recognize that looking forward and planning for the future is more critical than dwelling on past performance. Old working methods are unsuitable for a successful organization in 2023 and beyond. What worked yesterday will unlikely work tomorrow.
Thanks to its extensive research and expertise in this area, Crowe LLP can help leaders reveal business value in volatility—explore more here.