Making Strategic Decisions In Times Of Uncertainty

In this episode:

In this episode of Learning In Action, host Bryan Benjamin sits down with Dr. Andreas Schotter, Associate Professor of General Management and International Business at Ivey Business School, to discuss the challenges leaders face when making strategic decisions in times of uncertainty.

Throughout their conversation, Andreas offers valuable insights on how leaders can navigate ambiguity and strengthen their decision-making confidence. He emphasizes the importance of leaders staying close to their teams, highlighting the need for authenticity, visibility, and open communication during times of change. The conversation also explores the importance of leaders remaining proactive and the value of embracing curiosity to uncover opportunities for innovation, rather than solely reacting to challenges during times of uncertainty.

Listeners will gain actionable strategies for building organizational resilience, adapting to rapidly changing environments, and making decisions with greater confidence and clarity. Whether you're leading through transformation or dealing with the unpredictability of today's world, this conversation offers valuable perspectives for staying agile and focused.

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What is Learning in Action?

Hosted by the Ivey Academy at Ivey Business School, Learning in Action explores current topics in leadership and organizations. In this podcasting series, we invite our world-class faculty and a variety of industry experts to deliver insights from the latest research in leadership, examine areas of disruption and growth, and discuss how leaders can shape their organizations for success.

The Ivey Leadership Certificate Podcast Mini-Series

Learning In Action presents a special six-part series: the Ivey Leadership Certificate Podcast—designed to equip emerging leaders with strategic insights, practical frameworks, and the mindset to thrive at the executive level. In each episode of this mini-series, Bryan Benjamin sits in conversation with a professor from Ivey Executive Education to discuss timely challenges affecting leaders today.

Episode Transcript:

BRYAN BENJAMIN: Welcome back to the Ivey Leadership Certificate Podcast. My name is Bryan Benjamin, and this is the second episode in our six-part series on the critical dimensions of leadership. Today, we're focused on the challenge that every leader will face at some point making strategic decisions in times of uncertainty. Our guest today is Dr. Andreas Schotter a renowned expert in global strategy, international management, and decision making under ambiguity. 

Andreas is a professor at Ivey Business School and will be teaching a module on strategic leadership and decision making through uncertainty as part of the Ivey Leadership Certificate series. This module focuses on mastering the art of decision making in times of transformation, equipping leaders with frameworks and tools to lead effectively even when information is incomplete and the future is unclear. 

Today, Andreas will help us understand how leaders can strengthen their decision-making confidence and build resilience in their organizations to navigate ambiguity and ever changing environments. It's great to spend some time with someone who's got such deep expertise on a topic that I'm hearing tremendous amount of conversation around and questions around, and even apprehensions as leaders are navigating times of uncertainty. So let's dive in. Leading through uncertainty, truly, one of the biggest challenges that we hear leaders facing today. What are some of the key challenges that you see when it comes to making strategic decisions, in particular, in these unprecedented environments? 

ANDREAS SCHOTTER: When you look at decision making today, it's not new that we have to lead through uncertain times or uncertain environments. But today, there are so many dimensions of unpredictability that we need to first sort out which are the ones that are affecting us. And then build somewhat a timeline on which are the urgent ones, which are the ones that may have to be addressed in a mid and long-term approach. And also, this is not new. 

But the changes in dynamics around these uncertainties and the intertwining of these external effects is so critical to understand. So that is one piece. The other piece, what I think is really critical, is how do I make sure that my organization keeps on being aligned with these critical elements, and how, as a leader, can I make sure that I provide useful guidance moving forward, and also the ability to pivot back and forth if the environment asks for doing so. 

BRYAN BENJAMIN: Yeah. So a great frame. Actually, one of the first comments you're making was that around the prioritization. We're going to dig into tools and frameworks leaders can use. So prioritizing within the realm of what's important. But I also have to imagine moving away from those that might not be relevant, that could be distractions because there's just-- there's so much out there and so much that leaders are trying to process. So tools and framework that you'd recommend leaders can use when they're trying to navigate these uncertain times. 

ANDREAS SCHOTTER: I think the first one is a mindset that we have moved away from a world of scalable efficiencies to the world of scalable learning. So you've got to constantly learn and adjust and also be able to reverse your decisions. In the past, making a big decision, and this decision pans out eventually as being not as effective as another one, often has cost leaders at the senior mid-level their jobs, or heads, or their career trajectory. This today is a new normal. You have to be able to pivot and change. 

So the frameworks you're using need to be constantly monitored and adapted. And at one point in time, you use a decision based on that framework. New information come into play, then you may have to, or actually very likely, have to reverse it. So I call that reversible decision-making. Jeff Bezos, as one of the leaders, calls it one-way, two-way decision. So what is a one-way decision that actually closes my options? And what is a two-way decision where I can go back to? 

BRYAN BENJAMIN: I look back, and it felt like maybe there was longer periods of stability or certainty. And a decision I make today, six months from now, I might need to take a different direction because new information becomes available or things change. So from a leadership perspective, what new skills are needed to be able to embrace that more rapid changing or shorter cycles between decisions? 

ANDREAS SCHOTTER: So I call that having simultaneously a heads up and heads down perspective. The heads up perspective, understanding what happens in the long run. And heads down, really decisively executing on our plan at hand. That's the one dimension. The other dimension is a much tighter integration with your execution level from a top management perspective because uncertainty in the external environment may create uncertainty, or very likely, creates uncertainty within your organization. 

And then all of a sudden, you make a decision one day and say, we're going this way. You change directions. You know that you change direction. But that big ship underneath, they don't have the view from the bridge. They see what's going on all of a sudden. I don't understand anymore. It's not connecting. And then people start to disconnect. So having this ability, heads up, heads down at the same time, and then your authenticity and tools to move this down through the organization, not only through hierarchies but through leadership presence. 

BRYAN BENJAMIN: The view from the top. I like that analogy is, geez, I was dug in, and all of a sudden, I'm now being expected to go in different directions. So how do we keep those connections going? Longer-term view, shorter-term execution-- I'm hearing a lot of leaders say, I am really struggling with the longer-term view. I'm just so focused on today and whether I'm executing effectively, or putting out fires, or a little bit of both. Any advice on how leaders can get a little bit more longer term if they're more in the moment or if they actually are longer term driving more towards execution. 

ANDREAS SCHOTTER: So what I find often, I'm going back to the decision making that I said at the very beginning, being comfortable about making decisions under uncertainty is important. I have been using a megatrend framework now for a decade. Of course, these megatrends evolve. But by definition, a megatrend is something that develops over time and is not there all of a sudden. And scanning these megatrends that are outside of the executive's immediate situation is required by any leader today. And we are all ever so busy and more busy today and cutting out time to really understand that. Talk to people from other industries. Observe other industries. It's critically important, and change is constant. Change is not any more in intervention nowadays. And accepting this develops great leaders. 

BRYAN BENJAMIN: For leaders who are up for it, it's new and exciting challenges that they get to tackle. Decision-making confidence. I talked to a lot of leaders who-- especially when they're in situations, find themselves in situations where they need to make quick, rapid decisions, often in succession, sometimes second guessing themselves, sometimes, oh, I'm not quite sure I should move into execution on this. So one of the outcomes of your module is around helping leaders strengthen decision-making confidence. So how can leaders be more confident with the choices they're making? 

ANDREAS SCHOTTER: The first level is understanding what kind of leader are you. Are you a visionary leader? Are you a leader that needs to have a lot of control? Are you curious? Are you adaptable in a way, or are you not? Are you the other side? And there's nothing wrong. But understanding one's own leadership style and understanding what the organization expects from me or the members organization of expect from me brings you forward quite a bit. It's a big step forward in the process to be more effective and to be more confident. Confidence is nothing to do that I take a high, high risk decision and roll with it. It might be the case. But closing the gap between, my preferences, my competency, and the uncertainty that I cannot rule out and understanding when do I need to reverse a decision makes you, in the end, more confident. 

BRYAN BENJAMIN: Any advice for how leaders who find themselves in a situation where they need to either reverse or take a more significant change in direction and how they communicate that to those that need to know and are on their teams. 

ANDREAS SCHOTTER: Again, it's the authenticity of the individual. You cannot lead from the corner office only. You have to go down through the ranks. You need to talk to people. You need to show presence much more than it used to be the case, before hierarchies were built up. But we always talk about flattening hierarchies. And often, this is a measure for efficiency improvements. But if the leaders that are still within the structure do not bridge this gap, do not connect with these new structures, then you become ineffective. And in the end, people are like, the captain is off the bridge. Where's the captain? They want to see that. 

BRYAN BENJAMIN: Yeah, the authenticity, the visibility. And I could see different scenarios emerging. So one may be 100% data-driven. New information is available, and we need to change direction. What about a scenario where maybe I realize, as a leader, that I did not make the best decision for whatever reason. Maybe it is new information that became available, or maybe I just made a mistake. Authenticity clearly probably figures into a role. How do I-- how do I recover from that when that happens? 

ANDREAS SCHOTTER: So this is a tricky question. Because on one side, we encourage owning a certain decision. On the other side, if this is a decision that is really put people in our direction and they started running for you and then you say, oh, I made a mistake, turn around, how many times can you tell people to turn around? So it's a balance between owning and not overemphasizing the mistake, just acknowledging it's a mistake. Let's try to make a less impactful mistake. Next time, I can't guarantee it, perhaps, but this is very critical. I have seen that, that people just lose the confidence in their leader because we pivot from left to right, from left to right. 

BRYAN BENJAMIN: Yeah, a fair point. If I ran full steam ahead in one direction, I might not run as fast if I'm going in a different direction constantly. 

ANDREAS SCHOTTER: I'll give you an example. I just wrote a case about the global dilemmas of Volkswagen. On one side, their over-reliance on the home country and China. And then the rise of Chinese EVs and the huge capacities of EVs they have developed over the years and now pumping into international markets at a level that provides, potentially, even a better product than the incumbent firms in Europe or in North America. So Volkswagen is a leader who doubled down on China is losing. Every company is losing right now, every automotive company in China. 

But what do you do as a leader when you double down on a certain approach now on a sudden is wrong? And the current CEO, Oliver Blume, who came from Porsche, rockstar, and was considered a person that was very good with unions, with the employers, and so on, all of a sudden talks about closing three factories and doesn't take the union play on reduced work hours and so on considering that. 

So I'm making a decision before to align myself with doing the good times with the union, being approachable leader. Now, I'm giving them a hammer over their head and said, no, we are changing completely. We're closing three factories. And we are not just in a change situation. We are in a dramatic reconfiguration situation of the corporation. And he moved from being more visible on that one to be on an execution mode. We will see how this pans out. But just that he took this decision, for me, it's a great example of how you move away from a missed decision that was taken in the past to one that you have to take right now. 

BRYAN BENJAMIN: Appreciate that live example, and I'm curious to see where it plays out. I got to imagine there are scenarios where it could be painful in the moment as you reverse course or change direction. But sometimes, the delayed pain may be even greater if you hold on to a poor decision for too long. 

ANDREAS SCHOTTER: Absolutely right. And the biggest challenge here is how to remain leadership effective. That meaning with your people, what do you do? Do you all of a sudden become a more decisive leader in a way that you don't take information from others in anymore? That's not desirable. You still need the information. The people that are on the front line, they may bring something to you that's also embracing certain ideas. If you don't do this, you're losing the organization. I think a leader without an organization, king without pants. 

BRYAN BENJAMIN: That's it, is you look behind and go, wait a minute, I'm the only one here. 

[CHUCKLES] 

Let's build on this and talk a little bit about organizational resiliency and adaptability. So as leaders, sometimes we do need to make the decision ourselves. But often, it's not making decisions exclusively on our own. It's ensuring that-- how do organizations stay nimble and adaptable? I think the Volkswagen example was a really relevant one. So how do leaders implement strategies to help their organizations stay resilient and flexible in uncertain times? Maybe not even just in response to, oh, something is happening. How do they do it proactively anticipating ahead of something, maybe hitting them? 

ANDREAS SCHOTTER: So actually, I would like to flip this around. 

BRYAN BENJAMIN: Sure. 

ANDREAS SCHOTTER: So managing uncertainty is something that we need to do, but it has a very negative connotation. But uncertain times are also times of opportunities. 

And I often see this in leaders. They try to fix what is not going well without really opening up an opportunity for the future. For example, you're manufacturing a product or machinery whatsoever which ends up in a product of a client, compressor, whatever, on a refrigeration system. It's one of my former backgrounds. 

[CHUCKLES] 

So the company is really good at this, doing this product. But the market is changing. So all of a sudden, the market-- one step further, the market of the customer of my customer demands me doing system. So you have an organization that says, no, we never do systems. We're competing with our own customers. But the opportunity is here to build up more resilience by going into this market. You may at one point in time have to change your existing customer portfolio to a new customer portfolio, or making this opportunity basically real will help the company to be more resilient. 

So we're also forward looking. What new opportunities are out there? What do we need to do? If our model has been selling in person all the time and we are more personal and that's our real strengths, you still have to pursue online, for example. These decisions, you're losing, I think, the opportunity if you're just focusing on the negative side of uncertainty. There's lots that can be done. 

BRYAN BENJAMIN: It feels like the forest for the trees is if I'm too focused on addressing something, maybe I'm missing the opportunity that could be right in front of me to think a little bit differently. 

[MUSIC PLAYING] 

Innovation where does innovation fit into strategic decision making during uncertainty? And we think about maybe opportunity spotting or trying something new and different. 

ANDREAS SCHOTTER: So one of the largest drugstore companies in the world is AS Watson, headquartered in Hong Kong. And years ago, I worked with the then CEO, Malina Ngai, on a curiosity piece. So she wanted to-- she read something in a Harvard Business Review article and said, very short article, managing or leading with curiosity. And she sent that to me. And I said, I need to do for our top team a session. Can you do a day on leading with curiosity? I said, OK. Let me go back and basically deconstruct what is there. 

And this session was most likely one of the most transformative sessions for me as a leadership teacher. What happened out of this one is they unlocked innovation potential at the subunit. Before, innovation happened very much top-down. They were collecting ideas, but then the implementation came through head office to the individual subsidiaries. But they also have grown through acquisitions and haven't realized the innovation potential of the acquisitions. 

Through this curiosity exercise with the leaders, with the top team from around the world, they really unlocked this. And Malina is the one who's traveling around the world meeting these people and highlighting these kind of innovations all the time. I think that's a fantastic example of top leadership. 

BRYAN BENJAMIN: I think it's a terrific example, and it's empowering to see it's not one person that is solely responsible, is this one person actually created the space for others to come forward with ideas and innovate. So as always, our time flies. So I'm in a-- bring us to a wrap. The last question is always one kind of key takeaway when we talk about in this scenario, leading and making decisions in uncertain times. I'm OK if it's one, but I'm also OK if there are two or three final insights that you want to give. 

ANDREAS SCHOTTER: When I talk to leaders and give that takeaway, always they ask for a buzzword. 

BRYAN BENJAMIN: Yeah. 

ANDREAS SCHOTTER: And buzzwords in a way are good to remember what's going on. On the other hand, I give you an example. 15 years ago, we were all talking about change management. 10 years ago was transformational leadership. Today, it's leading in uncertain times. But when you look at the structure of some of the mechanics of change management, they are not different today. They are just applied differently because the context has changed very much. And the times and the uncertainty dimension and complexity has changed. 

So if I would say something to a leader is question your own frameworks. Don't walk down the same path because you know you're very good at that. Be proactive in having a heads-up and a heads-down. Probably more heads-up than heads-down approach to leadership. And remain close to your people. And this is not just a phrase. 

Today, with the talent pool we have out there, who are actually the young people who would quit a job because they don't necessarily see growth anymore without having a new job, is completely different. So the war for talent is actually addressed very much by the attitude, behaviors, and authenticity of the top leadership. And you have to ask yourself some tough questions. Who are you as a leader? 

BRYAN BENJAMIN: A great perspective, that toggle heads-up, hands-down. That one really resonates with me. And that closeness to people, physically close. You know what? I heard a lot more just close in terms of support, understanding, guidance. Because if you're not, you might look around tomorrow, and they're gone. And we didn't see that to the extent that we see it today 20 years ago, right? 

ANDREAS SCHOTTER: No, we don't. 

BRYAN BENJAMIN: Thank you, Andreas. Such a thought-provoking discussion, and I really appreciated the very tangible, practical live examples that you shared. So decision making in uncertainty can definitely be daunting, but the tools and strategies you shared with us today will certainly help leaders approach these moments with greater confidence and resilience. They're happening more frequently. They're happening at a quicker pace, and leaders are being tested in new and different ways. 

[MUSIC PLAYING] 

For those of you listening, I encourage you to explore Andreas' module on strategic leadership and decision making through uncertainty as part of our IV leadership certificate series. This module, along with the rest of the program, will equip leaders to navigate complexity and drive successful outcomes, even in the most unpredictable circumstances. Join us next time as we continue our series with an episode on leading collaboration in high performance teams, where we'll be discussing the importance of trust, communications, and leveraging talent to achieve exceptional results. 

[MUSIC PLAYING] 

About The Ivey Academy at Ivey Business School

The Ivey Academy at Ivey Business School is the home for executive Learning and Development (L&D) in Canada. It is Canada’s only full-service L&D house, blending Financial Times top-ranked university-based executive education with talent assessment, instructional design and strategy, and behaviour change sustainment. 

Rooted in Ivey Business School’s real-world leadership approach, The Ivey Academy is a place where professionals come to get better, to break old habits and establish new ones, to practice, to change, to obtain coaching and support, and to join a powerful peer network. Follow the Ivey Academy on LinkedIn.