Wildcat strikes, economists competing with each other to come out with the most doom-laden projection, an unstable government, and even Dubai imploding. It's hard for any business person to feel confident at the moment.
But freezing in the face of threats will only result in being left even further behind. So how to plot a way through what seems like an insurmountable amount of uncertainty? The Guardian and IDEO decided to gather together a group of business leaders to find out how the current climate has altered their thinking.
In the week that bankers faced the Commons Select Committee and banking bonuses inflamed public opinion, our roundtable guests were in revolutionary mood as they mulled how to alter their corporate strategies to step one step ahead.
There was broad agreement with the idea that a recession forces a different way of thinking and thus can be viewed as the catalyst for change. 'Necessity is the mother of invention,' summarised one of our contributors. The objectives of that change varied a little around the table; one person described a push for innovation in streamlining systems in order to reduce costs.
But the majority of those present were from financial services companies and had one major priority - how to re-build trust. In the words of one; 'The public now understand us to be daylight robbers,' a statement which brought wry nods of recognition from others around the table.
The contribution economy
It isn't just consumers who are feeling less trusting of companies. With credit so hard to come by, responsibility for investor relations appears to have become the responsibility for a wider set of managers than previously. 'Investors are an emerging audience', comments one, 'they also need to trust us'. One contributor described the frustration of pitching well-researched proposals to financiers only to find that they are 'sitting on their hands, waiting for…what?'
Gaining the trust of consumers and investors is far from being just about reducing prices, however necessary this has been to keep the former group continuing to part with their cash. For the retailers in the group it's about maintaining a quality experience, spoiling the consumer but also keeping things simple.
Trust is also earned by being able to demonstrate that you are sufficiently close to consumers (or business customers) to be able to create and focus on relevant ideas. Facebook was mentioned as a rich vein of inspiration, research and marketing – 'I'm getting increasingly more believable sources of information from there', said one.
In the 'Contribution Economy' consumers/citizens now expect to be part of the conversation on all kinds of issues that are ultimately going to affect them, whether this is local planning debates or the creation of new products and services. 'Each time we ask them, they add value,' someone observed.
Ask difficult questions
Actively listening to your customers also makes it more likely that your own company structure and systems don't get over-burdened with the kind of complications that just weighs down the innovation process. 'We need to keep everything simple enough that all customers can understand it,' was one comment. 'We all love to over-complicate things. It makes us feel more important. I wonder if much of the current economic trouble was caused by people over-complicating things.'
But how can the almost inevitable bureaucracies of corporate life be mitigated? One contributor felt that if only everyone in the innovation process could be encouraged to ask more questions, at every stage, this would hugely improve the likelihood of emerging with strategies that work.
'In a period of uncertainty, asking questions and posing scenarios makes us feel more confident. It'll be the people that do this now that will create the companies or products that we'll all be talking about in five years' time.'
But, as all agreed, the problem is that human nature dictates that it is hard to be the one questioning voice – and the more senior you get in a company, the more difficult it is to question the prevailing wisdom. One brave soul admitted that 'in banking it's been about just meeting expectations – not exceeding them – so there's been little motivation to question things in order to achieve real change.'
Part of the problem is that on one hand the current environment means that speed is the priority when altering strategy to chime with the newly frugal times. But this need for speed acts against the kind of questioning consideration that should be applied – and the spread of a more risk-averse culture.
Make new mistakes
As one person observed; 'Our managers are now saying that they need to cut through the thousands of emails and give themselves some time out to reflect, to ask themselves the kinds of questions that perhaps hadn't previously been asked.'
But there is a paradox in wanting to maximise creativity by encouraging a culture that allows for time to reflect and ask tough questions, encourages the freedom to make mistakes and embrace risk and the current feverish need to find the most commercially successful and rapid solutions to shore up the bottom line.
'Most companies view error as failure and leading to the sack. But if you suppress errors you also suppress the learnings.'
'Always make new mistakes' was the response of one, commenting that more companies should encourage the notion of viewing ideas that don't ultimately come to fruition as a valuable learning ground.
Can a responsive strategy still allow for a questioning approach? One round-tabler thought that part of the answer lies in literally getting close to consumers – the practice of taking senior managers out onto shop floors, to actually observe how the theory meets practice.
Working the coal-face
Many in the corporate world are fully aware that they need to get closer to their customers and move faster to respond to their needs but are restricted by the processes that hold a large company together.
Contributors shared details of their various structures – from the entrepreneur with just a few staff, through the highly decentralised operation that gives local managers the maximum decision-making power, to the centralised large companies. All agreed that small companies have the kind of nimble thinking that they'd like to emulate.
But there was some disagreement about whether large companies could ever successfully artificially create a culture that apes SMEs by setting up divisions as self-managing businesses. 'We tried that – I had to close it down in the end,' said one. 'It's a huge challenge for companies that grew up in the control culture of the 80's and 90's'.
Bringing the entrepreneurial spirit into big business is, agreed all, far from straightforward. 'Can we ever change the fact that the market rewards scale?' asked another guest.
But change is coming. One contributor described the very flat structure adopted by her company, which gives much decision-making power to local management, with the result that all staff feel they have a real stake in the business's fortunes. 'Our strategy is changing every six weeks at the moment, and everyone, even the receptionist, is both aware of it and what their role is'.
A shift in corporate culture is necessary for British business to emerge from the recession. The need for top management to be plugged back in touch with the 'coal-face' was identified as an urgent priority, echoing the public furore over the lack of personal responsibility adopted by bankers.
'The customer-facing staff always have a better idea than directors what is going to work and what won't,' someone pointed out. John Lewis Partnership, GE and ABB were all mentioned as having tried, apparently successfully, to empower staff lower down the ranks.
The "mutual" model of building societies was mentioned – with some fond nostalgia from the financial services people present – as an admirable way of encouraging a greater
degree of responsibility and desire for involvement by employees.
Trees or ferns
One dissenter questioned the wisdom of putting a decentralised structure on too high a pedestal, pointing out that one example where he'd observed this put into practice failed because 'the staff felt like they were being abandoned. Many people actually like having boundaries'.
'But is this because this is all they've ever been used to?' asked another, arguing strongly that the traditional "command and control" organisational structure is no longer suited to today's world. 'Think of it in terms of trees and ferns. Trees have branches that can only survive if attached to the main trunk. But ferns sprout wherever they find their own nutrients. They're self-supporting.'
'If even the military have decided to empower small squads of soldiers rather than the old-style hierarchy, then surely businesses can adopt it? We have to get away from the idea that a climate of fear is a positive corporate attribute.'
The botanic analogy proved most inspiring, with contributors momentarily diverted by trying to work out which member of the plant family their organisation most closely resembled. One pointed out that social networking sites like Facebook were a perfect illustration of the growth of a more grassroots-led power structure and that this generation of twenty-somethings would naturally push this idea through the businesses they joined.
'But can we really change 5,000 years of cultural heritage?' asked one sceptic, believing that such huge change in the way companies are structured would take more than the advent of social networking and one recession to change.
Another contributor pointed out that the current climate of increasing regulation on business would interfere with any attempt to flatten their power structures. 'We're entering a new period of super-governance. I worry that that is going to inevitably reduce innovation.'
So what do you think?
Do we need to breed businesses that are more akin to ferns than trees? Is the era of big centralised business over? How are you decentralising power?
Delegates' thoughts to take away
'Always make new mistakes'
'Consider whether that pyramid power structure is still useful'
'We need to move from the greed economy into the contribution economy'
'Networked funding is a neat idea; bringing together groups of organisations who can share the risk of a project'
'Keep things simple'
'Today has shown me quite how difficult it is to question underlying assumptions'
'We need to make sure companies have a clear, articulated, purpose'
