Optimizing Team Performance in a World of Volatility

Most of us have come to expect volatility in our day-to-day lives, which teaches us to adjust to changing situations. However, volatility is becoming increasingly more common and complex—making it harder to adapt in an uncertain world. 

The reason for this is the drastic societal, economic, and governmental changes caused by the pandemic, which only added to the anxiety-provoking volatility of our personal and professional lives. Business exits exceeded historical levels in the first year of the pandemic, with roughly 200,000 more U.S. establishments closing shop than in years past. Today, one in seven renters still haven't been able to catch up on rent, and the unemployment rate rose from 2.5% in February 2020 to 5.9% in June 2021.

Naturally, that volatility elevates anxiety and stress levels, and increases uncertainty about financial wellbeing, job security, and social interaction. As a result, people's ability to perform at a high level has suffered during the pandemic, affecting both basic job functions and decision-making abilities. 

To help ease the stress on the workforce and deliver value to customers, companies have to be more agile than ever. Here are three things leaders can do to manage the volatility and ensure their team performs well.

1. Help your team understand changing landscapes. 

Right now, volatility is having a deep impact on peoples’ sense of security—and is shaping consumer and employee behavior in a major way. 

Governments all over the world are experimenting with unconventional currency printing, making people anxious about a potential global recession. In fact, Accenture reported that consumers are more fearful of the economic impact of COVID-19 than their own health. On top of this, changes in mask mandates and pandemic-related regulations can shift abruptly and alter how companies operate.

Consider the home improvement space, for example. Lumber prices skyrocketed over 300% due to factory stoppages during the pandemic. However, within the last month, they've dropped by nearly 50%. That type of volatility can completely change how a company operates. Employees could be put on leave or laid off, only for a company to have to rehire a month later to meet demand. And with that uncertainty looming overhead, former and potential employees might feel inclined to stay at home if they receive comparable government benefits. 

The anxiety these volatilities instill leads to frustration, anxiety, and stress—all emotions that can inhibit performance and, ultimately, the health of your employees. No matter what’s happening, or whatever outcome could happen, companies need to prepare for different scenarios. And that starts by accounting for and communicating about the constantly changing landscapes. 

2. Equip people with the right tools and information. 

In a volatile world, employees need to have support from leadership. The best way to show that support is through clear communication and ensuring people have the tools they need to do their jobs. 

Some companies use whiteboarding and open discussions to communicate. Other companies take it a step further by implementing strategic execution solutions and change management training to help employees work through the challenges volatility brings. No matter what method you choose, it’s crucial that all teams are fully represented in meetings, discussions, and training to avoid confusion or ambiguity around how to operate through change. The goal is to create a cohesive execution plan, which can be designed through various frameworks such as scenario planning.

The past 18 months have shown that the worst case scenarios are no longer theoretical for a lot of businesses. While unfortunate, it's also an opportunity for companies to share what actually happened, talk about what they would do differently next time, and plan initiatives based on different scenarios—each with plans for how it affects execution, direction, hiring, and more. That way people feel confident and equipped to handle change next time it arises.

During each scenario planning session, leaders should define the tools their team needs to handle the change and implement strategies around how to use them appropriately when the time comes. 

3. Help your team continuously adapt.

Businesses are always opening and closing, but the various forms of global volatility is preventing companies from the so-called "return to normal."

According to a study released by the Federal Reserve, the United States experienced a business exit rate of about one-quarter to one-third above normal—many predicted to be permanent. The businesses that didn’t shut down completely had to pivot to survive. Some companies, like the furniture manufacturer TOV, permanently changed operations due to increased online orders, higher demand for certain products, and other pandemic-driven factors. Fortunately, TOV saw an increase in business after an initial loss. 

The lesson here is clear: knowing how to adapt can't be a theoretical exercise anymore. Instead, managing change needs to be prioritized, practiced, and proactive. This could mean training people for new skills, creating guidelines if Scenario A, B, or C happens, and revisiting your plan to see if it's still appropriate for the current landscape—whatever is necessary for your company and employees to adjust as smoothly as possible. 

Change will always be difficult for companies and employees. But if leaders understand what forces are affecting their teams, they can put a plan in place to handle change. So when the next wave of volatility comes, everyone at the company will have the confidence and communication channels to adapt and continue performing at a high level.

Akhil Kohli is the CEO and founder of MindStrength, the preeminent initiative execution platform for Fortune 500 and mid-size companies. MindStrength's Initiative Platform enables companies to execute against strategic initiatives at scale and with accountability at all levels of the organization.