BRIEFINGS PODCAST: A Jolt of Uncertainty

A Jolt of Uncertainty

NOTE: While this transcript has been reviewed, it may contain errors. Please review the episode audio before quoting from this transcript.

Jill Wiltfong:

Tariffs. Few people in the supply chain world have seen anything like this in their lifetime.

Seth Steinberg:

A lot of it is breaking something, at least in your head, before it's actually broken.

[Ashton Kutcher in the ‘Jobs’ movie]:

So, fix it!

Jill Wiltfong:

Talk about the psychological approach to making good decisions faster.

Edel Holliday-Quinn:

Moving from reactive thinking to adaptive thinking. If you're waiting for 100% certainty, you're just moving too late.

Jill Wiltfong:

This current jolt of uncertainty.

[Announcer]:

It's time to play "Leadership Snap Decision." Our two company leader contestants have mere seconds each to make the right snap decision in the face of uncertainty. Can they, do it? Let's find out. Leader number one, there were 25% tariffs on your business, but they just got removed. How do you shift your business strategy?

[Contestant]:

I, uh, well, I, uh, whop. Well, I, uhh,

[Announcer]:

Yikes! Looks like your decision wasn't snappy enough. It's all down to you contestant number two. There are plans to impose heavy tariffs on your company's products within the next week. What's the right decision here?

[Contestant]:

Okay. I reach out to my nearshoring partners to reup our contracts. Use AI to appropriately forecast demand and shift delivery timelines accordingly at our warehouses.

[Announcer]:

That's right. Now that's a leader who knows how to make snap decisions.

Jill Wiltfong:

Hi, I am Jill Wiltfong, Chief Marketing Officer for Korn Ferry. And this is "Briefings." Our deep dive into topics that corporate leaders need to care about.

Tariffs. Just in the past few months, they've been levied, and unlevered, and threatened to be levied again at any moment. You can imagine the fits that leaders of many companies are having with all of this. And whether it's tariffs or a host of other global issues, it's all forcing leaders, whether it's the CEO or a manager, to make a lot of key calls much faster than they're used to. Of course, leaders have always had to deal with uncertainty and making calls quickly. That's why as the saying goes, they get the big bucks. But the way things are now with government moves and markets changing so rapidly, it feels as if just one day it'd make the difference between a leader's decision looking brilliant or foolish. So today, let's spend some time finding out what smart leaders can do to make more of the right calls for themselves, their teams, and their companies as they navigate this current jolt of uncertainty.

Before we start, if you're watching us on YouTube, please be sure to like, subscribe, and leave a comment to let us know your thoughts on this topic.

I am joined today by Seth Steinberg, a Korn Ferry Senior Client Partner in the supply chain practice. A key concern around terrace is of course, how companies should deal with potentially massive supply chain disruptions. It's one of those critical calls leaders now have to handle fast. So, Seth's deep knowledge in this space is just what we need today. Seth, thank you for joining me today.

Seth Steinberg:

Thank you for having me.

Jill Wiltfong:

So let's get some context here, regarding tariffs specifically. You've said that few people in the supply chain world have seen anything like this in their lifetime, but at the same time, the COVID Pandemic actually prepared them somewhat for this moment. Tell me more.

Seth Steinberg:

The COVID-19 pandemic was a bit of a paradigm shift. Some would call it a black swan event, Jill. And so, companies were forced to rethink their entire approach to supply chain management. And so, because of the ongoing tariff related uncertainty, there is a bit of a playbook, and there are some lessons learned from COVID-19.

Jill Wiltfong:

You've also outlined a protocol that leaders should be looking at when it comes to maintaining a smooth supply chain operations, even when facing these unpredictable things like tariffs. Can you briefly take me through that?

Seth Steinberg:

Many of our clients have invested in what we call the Integrated Supply Chain. You can see that they have more suppliers. They've invested in backup sources rather than having all eggs in one proverbial basket, they're making investments in reshoring or nearshoring to local and regional production facilities and distribution points. And then they've been going through this process of double clicking on their cost management structure. And then last but not least, technology, they are making the big bets in their infrastructure and investing heavily in progressive tools and tech.

[Dustin Burke]:

The media talks about how from this point forward, companies can and will make their supply chains more resilient. And this is good advice, but the question I keep asking myself is, why haven't more companies taken this advice? The reason is that it doesn't stand up against competing priorities, and steep competition that occurs between the crises and shocks.

Jill Wiltfong:

That's global trade expert Dustin Burke, talking about how even when companies know what to do to prepare for supply chain disruptions, they still don't always take action. Seth, you've said part of the issue stems from supply chain leaders not having sufficient bonds with executive leadership within their companies. How do you recommend creating that really all-important cohesion between supply chain and company leadership? What do you do to build those bonds?

Seth Steinberg:

Great question. So first and foremost, it's being able to demonstrate value. And in order to do that, it takes a proactive supply chain leader, one who is willing to spend the time and really seeking to understand. So, showing that the supply chain organization at large is not just about compliance or penny saved on the dollar, but that supply chain understands the particular P&L, or whatever issue in front of that chief functional officer, and what the impact is of the overall business.

Jill Wiltfong:

The constant push and pull of tariffs, of course, is only added to what you've called a state of permacrisis that leaders find themselves in. And you've mentioned being self-disruptive as a key leadership trait right now for being able to deal with these rapid shifts in business that we face. What do you mean by self-disruptive?

Seth Steinberg:

I would best describe the self-disruptive leader as those leaders who can really look around corners and anticipate. Some of that is through scenario planning. A lot of it is breaking something at least in your head before it's actually broken.

Jill Wiltfong:

Seth, let's end on a positive note to kind of balance out all this talk around uncertainty, which we're certainly deep into, you have helped so many leaders through supply chain difficulties. Do you have an example of one who successfully steered their company through a difficult patch? I'd love to know how they did that.

Seth Steinberg:

We worked closely with a senior supply chain executive who worked for, works, present tense, a large retailer. And as a large retailer. You know, this particular client imports a lot of goods in volume from overseas. In order to navigate the issues around the current tariffs, they've done a really good job through this leader and his team of leveraging their global buying power to negotiate better deals with suppliers and forming win-win partnerships with their supply base. They've diversified a lot of their sourcing out of one particular country in the region to other Southeast Asia and low-cost regions. Thirdly, they, this leader has worked very closely with the Chief Technology and Chief Information Officer of his entity to invest, and really bring through to reality the supply chain digitization efforts, which is really giving their supply chain the visibility that they need, allowing it to adjust faster. And so, you know, the outcome, and the net, is the client has helped keep prices for their consumers relatively stable versus their peer group and industry.

Jill Wiltfong:

All right. Well, Seth, thank you for coming on and sharing your insights with us.

Seth Steinberg:

Appreciate it. Thank you very much.

Jill Wiltfong:

We've looked at the practicalities of addressing supply chain disruptions. After the break, we'll talk to a leadership psychologist about how leaders can deal with the emotional impact of such rapid change on both themselves and their teams. Stay with us.

Rupak Bhattacharya:

Hi, and welcome to This Week in Leadership. I'm Rupak Bhattacharya. And here's a quick look at what else is happening in business. Compensation plans. Half of companies have made a significant adjustments to their compensation plans recently, and 60% expect to do so over the next two years. According to the latest Korn Ferry Global Total Rewards Pulse survey, the driving factor in these pay shakeups appears to be a push from governments for more pay transparency.

[Announcer]:

The coaching industry is thriving.

Rupak Bhattacharya:

The US life coaching market is expected to grow by nearly 5% annually between now and 2030. Experts say life coaching may prove beneficial given today's increased awareness of mental health issues, but certified executive coaches may be more helpful when it comes to achieving career goals.

[Announcer]:

What are AI agents?

Rupak Bhattacharya:

So-called AI agents capable of autonomously handling complex tasks can now apply for roles on their own dedicated job site. Experts say, even though AI is still many years from replicating critical human skills, a future may not be far off in which AI agents handle a wide range of high-level tasks better than humans do. For more insights on business and leadership, head to kornferry.com/insights. Now, back to Jill to end our episode

[Ashton Kutcher in the ‘Jobs’ movie]:

Somehow we managed to design a word processor that doesn't have thoughts. And it can't happen again. So, fix it!

Jill Wiltfong:

We're back talking about the pressures leaders now face to make good decisions quickly. I'm joined by Edel Holliday-Quinn, Founder of the Center for Leadership Psychology. She spent her career helping countless leaders deal with tough, emotional, and psychological challenges. Edel, it's really great to have you with us.

Edel Holliday-Quinn:

Thank you for having me.

Jill Wiltfong:

That last clip was from the movie "Jobs" where Steve Jobs played by Ashton Kutcher loses emotional control with his team amidst the mounting pressure of an upcoming product release. We spent the first half of this episode talking about how the current tariffs are forcing leaders to make tough snap decisions. In your current work with them, talk about the psychological approach to making good decisions faster than maybe they used to.

Edel Holliday-Quinn:

One of the most effective psychological strategies in helping leaders move is moving from reactive thinking to adaptive thinking. So, when we're under pressure, our brains, they tend to default to things like being risk avoidant, and making binary choices. We go into fight, flight, or freeze. But really good decision-making in these high stakes, these fast-moving situations, they require cognitive agility. So, you know, when I work with leaders, I look to build what we call metacognition. And that's the ability to notice their own thinking and be able to shift between those modes. So, you might be moving from a gut reaction into a decision-making scenario planning, and you might do that in a matter of minutes. So, when we talk about speed and speedy decisions, it doesn't have to mean recklessness. It can mean training your brain to assess, to prioritize, and really act under uncertainty but doing that with clarity.

Jill Wiltfong:

What gets in the way is people are trying to kind of navigate, you know, what state of mind they're in? Are there things that kind of consistently get in the way of leaders taking this kind of decisive quick action?

Edel Holliday-Quinn:

Absolutely. There's a few key blockers that come up again and again. We've got fear of reputational damage, things like analysis paralysis, and also what psychologists call negativity bias. And that's our tendency to overweight potential downsides. So when leaders are kind of unconsciously influenced by what they call legacy logic, the belief that what has worked before will work again, even when that environment has completely shifted. So, it's really important, this idea of informed momentum that we use in psychology, and that's knowing that you have enough insight to move forward even if it's not complete. So, I often talk to leaders about the 70% rule. If you're waiting for 100% certainty, you're just moving too late.

[Gene Hackman]:

Forget about the crowds, the size of the school, their fancy uniforms, and remember what got you here. Focus on the fundamentals that we've gone over time and time again. And most important, don't get caught up thinking about winning or losing this game. If you put your effort and concentration into playing to your potential to be the best that you can be. I don't care what the scoreboard says at the end of the game, in my book, we're going to be winners.

Jill Wiltfong:

That's a scene from the movie Hoosiers, where the late great Gene Hackman plays a coach inspiring his basketball team to victory. Company leaders similarly have to not only manage themselves but also rally employees through sudden change as it comes up. What's the best approach to guiding a team around uncertainty in these big pretty massive shifts in business?

Edel Holliday-Quinn:

I think the best leaders are anchoring people in purpose and not just process. So, when this change is swirling, this change is happening. Teams, individuals, they crave meaning. So, leaders who are able to articulate why a shift is happening and then connect that to the long-term values or client needs, they're going to be much more effective at maintaining trust within their team because psychologically, you know, people can tolerate a lot of uncertainty once they feel safe, once they feel seen, and heard, and part of a much bigger mission.

Jill Wiltfong:

I'd love to end on a key trait that you say define successful leaders in today's unpredictable business environment, which is intellectual curiosity. It seems like such a hard thing to be curious during apparent chaos. Why do you feel that that trait of all things out there is so critical right now?

Edel Holliday-Quinn:

For me, the difference between a great leader and an exceptional leader is one who has real intellectual curiosity, even amongst crisis, chaos, huge change. And really, because the playbook is kind of gone now. You know, we're in a world where deep expertise alone, it doesn't make someone effective. What we need is to be asking much better questions, challenging assumptions, exploring new ways of thinking, and doing that fast. So curious leaders are going to stay open to feedback, they're going to listen across boundaries, and therefore they're going to adapt faster. You know, in neuroscience, we know that curiosity activates reward pathways in the brain, and that makes people much more receptive to change. And that mindset itself is contagious. If you think about a time where no one has all the answers, and the best leaders are really the ones who are still willing to learn, and that curiosity also fuels resilience in that context.

Jill Wiltfong:

It's great, great thinking. Be curious. I love the notion that that's contagious as well. So really great to get your take on all of this today. Some good advice. Thank you.

Edel Holliday-Quinn:

My pleasure. Thank you.

Jill Wiltfong:

The Executive Producer of "Briefings" is Jonathan Dahl. Today's episode was produced by Rupak Bhattacharya, Nadira Putri, and Teresa Allan. And it was edited by Jaron Henrie-McCrea. It contains reporting by Russell Pearlman, Arianne Cohen, and Peter Lauria.

Our video segment contains original artwork by Frazer Milton, Hayley Kennell, Jonathan Pink, and Sasha Kostyuk.

Don't forget to read our magazine, available at newsstands and at kornferry.com/briefings. That's it for Korn Ferry “Briefings”. I'm Jill Wiltfong. See you next time.

♪ Is it me you’re looking for ♪