When you’re under pressure, where do you turn?

Although we have all got used to volatility and unpredictability over the last few years, it feels like this year has been quite exceptional.

Geopolitically it has been highly turbulent, mainly due to conflict in the Middle East and the US/Israel war against Iran with all its ramifications for supply chains and oil prices. With the White House pursuing a very active and assertive agenda (including trade tariffs), it has been difficult to predict what might follow from one week to the next.

Domestically meanwhile, we have also seen political upheaval with a new Prime Minister recently installed. The hope must be that now we enter a more productive period where the new administration can set out clear policies to support growth. The Autumn Budget will be an important focal point. Economic conditions remain challenging due to inflation and a low-growth environment, with high costs and squeezed margins putting many businesses under pressure.

And then there has been the climate: five heatwaves so far this year and widespread drought conditions. Due to El Nino, there are now predictions that the autumn will be wet and stormy – swinging us from one extreme into another and potentially creating service challenges for a whole series of organisations including utilities, transport and infrastructure providers and others.

In times like these, when what’s coming next is so hard to predict, it can be difficult for business leaders to know where to turn. I understand this myself as a CEO and fully empathise. However, I have started to see two trends that worry me and which I wanted to take the opportunity to discuss here.

Bring human intelligence to AI outputs

The first of these is a growing trend to lean on “what the AI is telling us”. We all have a range of sophisticated AI tools at our disposal and reams of data that can be fed into them. My concern though is that there is a danger of taking AI’s analysis of a given issue or scenario at face value – to accept it without reflecting/standing back or applying the “does this make sense?” test. While AI and other data analytical tools can certainly take us a long way to gaining strategic clarity, there is also the risk that they effectively just give us new ways of admiring a problem – just cutting the data differently or, if we don’t ask the right questions, taking us down the wrong path.

My advice here is that leaders and operational managers should always bring their own experience, knowledge and ‘nous’ to any such analysis. What’s your gut feel? Is it broadly in line with your expectations as a seasoned professional and what your instincts are telling you? Crucially also, how does it align with the wider purpose, values and goals of your organisation? Challenge the outputs of AI and data analysis, bring your own thinking to them and always try to see the big picture. One of the things I always say about being a leader is if you’re uncomfortable about something, don’t do it. There is a danger that organisations increasingly defer to artificial intelligence – when it’s human intelligence that really brings that wider appreciation of nuance, context and the specific factors that sit behind an issue.

Don’t just chase the numbers

Secondly, there is a related trend in challenging times of increasingly following another form of data: the numbers. Of course, it is important  to ensure financial performance is strong and when conditions are uncertain and tough we all seek to manage costs more tightly. All decisions must be taken with a clear view of the financial implications, but if the numbers start to dictate everything with a short-term view, this often creates longer term issues to contend with.

An excessive short-term focus to hit numbers at all costs often leads businesses to pursue a reduction in the workforce or in ‘human capital’, a business term that can betray a worrying objectification of what is any organisation’s greatest asset. But this is likely to lead to a dislocation of what I call the ‘balanced scorecard’ between the needs of customers, staff, investors and supply chain partners that any business must maintain if it is to operate effectively and sustainably. If any one of the elements falls out of balance, there will be negative impacts for the company.

Taking a rounded view

So, what do you turn to when the pressure is on? My counsel is to include the outputs of AI and the raw financial calculations in your thinking – but as parts of the consideration, not the whole. You need a rounded view, which will come from a variety of sources: your experience as a human leader, the knowledge you have accumulated through your career, your discussions in the boardroom and with trusted colleagues (and sometimes outside the organisation too), the strength of your convictions that come from a clear strategic purpose and vision. These are the key components of leading an organisation and taking business decisions – now, and as they always have been.