Adversity vs Opportunity: The Importance of Perspective in Business StrategyApr 28, 2022
Every business in any industry can point to unique challenges it faces. The era we’re in presents some of them, from inflation to the pandemic to the Great Resignation and all of their related issues. In this article let’s calibrate how adversity often presents a great opportunity – if you know where, and how, to look.
Part mindset and part skill set, the ability to overcome challenges in order to innovate and collaborate is what often sets the thriving organization apart from those that are just surviving.
Understanding Adversity in Business
Adversity can be a great teacher. It can teach us how to get up when we fall, how to overcome the obstacles that life throws at us and how to learn from our mistakes. Adversity in business is typically caused by unexpected events that happen outside of our control which create a challenge for the company or person involved. These events could be anything from natural disasters to economic downturns like recessions or crises.
When we think about adversity in business, we usually think about financial difficulties or a loss of revenue as a result of what we can’t control. While adversity might be a great teacher, it can an expensive one. So let’s unpack that idea of what we can’t control just a bit.
Consider a natural disaster like a flood or fire wiping out important documents or digital drives. The business may have no control over what created the adversity, but it does have some control over the impact a flood or fire could have. For instance:
- Important paper documents can be digitized
- Data can be backed up to off-site servers or to the cloud
- Disaster recovery solutions can limit and mitigate business impact
In any scenario, a natural disaster is a tremendous and serious cause for concern. But where some businesses may suddenly find themselves unable to do business, others will experience an inconvenient interruption.
We aren’t intending to minimize adversity and its impact. It’s hard for any business to adjust and overcome events like:
- Losing a key employee
- A competitor entering the market with a disruptive product
- A natural disaster destroying your manufacturing facility
- Changes in the tax law that make it difficult to compete
But herein lies the other side of this coin: Where there is adversity, there is also opportunity.
Finding Opportunity in Adversity
Businesses are always faced with adversity. It is a part of the business cycle. But it is important to maintain perspective. This means either not letting the business’s current state affect the long-term goals or objectives, or having the agility to innovate new goals and objectives.
One way that companies can turn adversity into opportunity is by looking at their current strengths and weaknesses and finding ways to leverage them. For example, if a company has trouble with customer service, this is an opportunity for improvement. They can invest in new technologies or hire more customer service representatives. Another way to turn adversity into opportunity is by using your competitors’ shortcomings as opportunities for your own company. If your competitor has a bad reputation among customers due to poor customer service, you can use this as an opportunity for growth by focusing on providing better customer service than they do.
There are two ways to think of finding opportunities: Proactive and Responsive
This approach examines your current state in anticipation of adversity, in an effort to limit it. First, identify what it is you’re unhappy with and why you’re unhappy with it. Next, brainstorm solutions and think about how each solution would affect the business or the people that work in it. Finally, take action on one of these solutions to create change.
Let’s go back to the flood that hit the records room. The proactive approach has the organization recognize, long before the rain starts falling or the pipe bursts, that having all these paper documents and files introduces a vulnerability. It explores the potential adversity such a vulnerability could introduce and puts together a plan to mitigate or limit that impact. For instance, digitization and disaster recovery plans. The organization took the opportunity to fix a problem before it became mission-critical.
Frankly, this is where many of us find ourselves right now. COVID-19 and its impacts weren’t something we could anticipate or make meaningful plans against. Inflation has caught us off-guard. Boeing recently acknowledged in an investor call that a fixed-price contract it agreed to in 2017 with the US government is a contract that, in hindsight, it probably shouldn’t have taken. Boeing pointed to supply chain and schedule delays, mostly caused by the pandemic, as being contributors to a project that it says is now over budget.
Boeing can’t do anything about the situation it’s in, except commit to managing the project as well as possible. They will certainly, however, more strongly consider such contracts in the future. Its opportunity is to be more disciplined about certain aspects of its business in the future.
Many companies innovated in the pandemic on everything from reconfiguring manufacturing processes to changing delivery methods or product offerings. We’ve discussed how inflation and The Great Resignation have created opportunities for companies to take stock of everything from their hiring practices to their benefits packages to their overhead and employee count.
Change Is Hard. Choose Your Perspective.
Ultimately, if you’re experiencing adversity or opportunity is a matter of how you look at the situation you’re in. Here are a few more insights:
- It’s a lot easier to see a difficult situation as an opportunity if you’re not in the midst of survival. Make sure your CFO and financial functions are managing cash flow and cultivating healthy banking or financing relationship. Whenever possible, have some breathing room.
- Most organizations have that key employee. An executive or a salesperson or operations manager who just seems to have it all down. Take the proactive opportunity to capture best practices from them that can be taught and learned. Don’t allow key high performance capabilities to reside strictly inside a person’s head!
- Ask others in your organization, especially those outside the C-Suite, where they see vulnerabilities or opportunities. It’s the employee who keeps having to dig through old files in giant cabinets who not only sees the threat a fire or flood would pose, but who might also recognize ways to improve inefficiency or save time (and money) with digital systems.
- Surround yourself with experienced, capable experts that are generally unfazed by adversity. At ProCFO Partners, for instance, there’s just not a lot we haven’t experienced and overcome. Seek dynamic partners that can provide levity and confidence in difficult situations and who are able to recognize potential opportunities along the way.