After much delay, and even more talk, the world is getting its look at the proposed tax bill the Republicans in the U.S. House of Representatives have in mind. But the reality is corporate leaders will still have only a hazy picture of what their own future will look like.
Indeed, with weeks if not months of congressional debate to follow, the questions will likely remain open for some time: Will the corporate tax rate go down? Will foreign partnership need to change? How will tax credits and business deductions work? But the biggest question, of course, for organizational leaders is how to plan ahead amid such uncertainly.
In business terms, experts call this the challenge of ambiguity, and it comes just as many organizations are planning their own budgets and strategies for the coming calendar year. “You better learn fast, you better be open,” advises Kevin Cashman, a Korn Ferry senior client partner in the firm’s CEO and Executive Development practice. “If you think you have it figured out, you probably haven’t.”
Still, savvy leaders have been here before, of course. Here are some steps they follow:
CEOs have always had to deal with ambiguity, of course, and tax plans come and go. But this plan arrives while many leaders are already dealing with uncertainty over immigration, technology disruptions and regulatory overhauls. But a hallmark of great leadership is the ability to make concise decisions amidst all that uncertainty and inspire confidence in colleagues and employees. “Leadership is always messy,” says Cashman, “If there is no ambiguity, then no leadership is required. It is precisely in the courageous engagement of ambiguity and complexity that breakthrough ideas are born.”
Don’t Get Distracted
Don’t get consumed by the byzantine debate about repatriation rules, corporate tax rates, and deductions. Bob Rozek, Korn Ferry’s CFO, will put a little energy into checking out the latest tax news, but then pass it off to the firm’s tax experts. Rozek has other things to concern himself with, and he won’t let the tax debate become be more than a fractional part of his day. “The job is to have an adequate amount for shareholders and employees,” Rozek says. “We’d follow the same approach with or without any tax law changes.”
It Could Be Free Money
Ultimately, tax changes are out of the hands of even the most powerful CEOs. Although most must have teams that continue to assess different scenarios, many leaders will simply view the prospects of positive tax changes as free money not including in their budget. In a recent interview with Korn Ferry, Chris Killingstad, CEO of Tennant Co., a major cleaning products and solutions firm, explain his outlook. “We manage as if the status quo will remain the same until it gets better,” he says. “We’d welcome any change but don’t expect it.”