Leadership | Sep 4

How to lead through uncertainty

Leadership | Sep 4

How SME leaders can make better decisions, adapt strategy, and build resilience when the future is unclear

Ian Wylie Journalist, broadcaster, educator

Reading Time 5 minutes

Closing an award-winning café and restaurant while it was still successful might seem unwise. But Hayley Wilkes, owner of Arbroath-based pie maker WEECOOK, could see in 2024 that economic and operational pressures were building across hospitality and decided that waiting for certainty carried its own risk.

‘I didn’t want to wait until those pressures left us with no choices, so we made the difficult decision to close while we were still in a position to change direction,’ she says.

WEECOOK already had award-winning pies and sausage rolls, an established reputation, and loyal customers. But Wilkes shifted towards production, markets, catering, and events instead. ‘We didn’t know exactly what the new WEECOOK would look like, or how customers would react to the change, but we knew we had something worth building on.’

For SME leaders in all kinds of sectors, that ability to act without possessing all the answers is becoming increasingly important.

Accept you can’t predict everything

Paul Hughes, Chair in Strategy at Lancaster University Management School, distinguishes between measurable risks and genuine uncertainty. Risks can be assessed using tools such as forecasting, scenario planning, and ‘what if?’ analysis. True uncertainty involves events whose likelihood cannot realistically be calculated.

‘The starting point for SME leaders needs to be that you can’t predict everything… and nor should you,’ says Hughes. Rather than endlessly seeking more information, leaders should concentrate particularly on strategic issues: the longer-term decisions that determine resource allocation, competitive positioning, and the direction of the business.

Hughes warns that becoming absorbed by operational problems can create an illusion of progress while distracting leaders from threats or opportunities that could fundamentally affect their businesses.

Know what shouldn’t change

Uncertainty doesn’t mean abandoning everything that has previously worked. Wilkes found it helpful to distinguish between what was fundamental to WEECOOK and what was simply an established way of operating. The restaurant could close without abandoning the products, reputation, and values underpinning the business.

‘I think the key is being prepared to change without losing sight of what makes your business valuable,’ she says. That also meant resisting pressure to chase immediate growth. ‘We’re not trying to recreate the old WEECOOK. We’re building the next version of it, and at this stage sustaining the business and getting the new model right is more important than growing too quickly.’

Treat plans as starting points

Knowing when to stick with a strategy and when to abandon it is one of leadership’s hardest judgments. Hughes says persistence has advantages. Businesses learn by repeatedly doing things, while sticking with a strategy can provide direction and allow companies to exploit existing strengths. But persistence can also lead to ‘strategic drift’, where a company’s approach gradually stops fitting the world around it.

Warning signs include falling competitiveness or market share, competitors moving faster, and deteriorating resources or capabilities. The answer isn’t to dispense with planning. Instead, Hughes recommends viewing plans differently. ‘Planning isn’t everything and plans are jump-off points from which you can improvise or build from,’ he says.

Strategic improvisation, he stresses, isn’t simply ‘winging it’ or ‘living on a prayer’. Having an existing strategy gives leaders a point of departure when circumstances demand rapid decisions, redeployment of resources, or a significant change of direction.

Build your ability to adapt before crisis arrives

Businesses can also prepare for events they cannot predict by increasing their capacity to respond. Hughes argues that leaders should create conditions that allow their organisations to improvise, remain agile, and adapt. That includes being prepared to redistribute resources, abandon established approaches, and explore new ideas.

Leaders should listen throughout the organisation, seek help, accelerate feedback, and encourage people to speak up. They should also avoid becoming excessively lean if removing apparently redundant resources leaves the business less resilient when something unexpected happens.

‘Leaders need to become comfortable with the unknown, with an absence of information, with acting under pressure,’ Hughes says. ‘You can’t escape it.’

Be honest when you don’t know

Uncertainty also creates a communication challenge. Employees naturally look to leaders for reassurance. Yet pretending to possess answers that don’t exist can undermine trust.

Wilkes remembers telling her team that WEECOOK’s café was closing. ‘It broke my heart because these were people who had helped build WEECOOK and make the restaurant what it was,’ she says.

She couldn’t tell employees exactly what would happen next. Instead, she explained why change was necessary, acknowledged the risks, and described what they would try to build.

‘You don’t have to pretend you have all the answers,’ she says. ‘You need to be honest about what you know, what you don’t know, and what you’re going to do next.’

Her team subsequently adapted to new roles and ways of working and helped implement the new business model. Looking back, Wilkes regards closing the café as one of her best business decisions. The company didn’t escape the pressures facing hospitality. But it changed early enough to navigate them differently.

SME leaders cannot eliminate uncertainty, however much information they gather or planning they undertake. What they can do is build organisations capable of responding to it.

Better ‘to try and be on the front foot’, says Hughes, than to bunker down and hope for the best.

Ian Wylie Journalist, broadcaster, educator

Ian Wylie is a journalist, editor, and broadcaster for the Financial Times, Guardian, BBC, Monocle, and others. For 16 years he was a staff writer, feature writer, and section editor at The Guardian newspaper. He also teaches on Newcastle University’s undergraduate and postgraduate journalism programmes.

View profile