Learned Resilience in Choppy Waters

By COO and Partner Justin Moser

Ask Treasury Secretary Janet Yellen what to expect in 2023, and you’ll get a slightly better outlook than most suggest. While acknowledging past mistakes. Yellen’s take encourages cautious optimism, with a near-term inflation cooldown.

Many would disagree, and regardless, less severe forecasts don’t mean businesses are in the clear. China’s growth slowdown and Covid surge along with Europe and Asia’s geopolitical volatility continue to provide hefty stones in the pockets of the global economy. And as the Federal Reserve looks at less aggressive rate increases near-term, markets are perhaps prematurely optimistic on the pace of inflationary cooling and recovery.

HighPoint Associates (HPA) holds an outlook that’s both realistic and pragmatic, preparing for whichever form of ‘landing’ in the 2023 economy.

What we consistently see is this: With the right planning, focus, and commitment, winning businesses, and their leaders, have demonstrated “learned resilience”, and are better equipped to roll with the economic punches.

Rough seas make strong sailors (and organizations)

As the name suggests, learned resilience is not innate, but rather one of the more profound pandemic by-products – both on a personal and business level – for successful entities that have thrived. Three years of turbulence, re-acceleration, and pivoting have given businesses opportunities to develop capabilities many may never have previously flexed, capabilities that are transferrable to both future crises and growth events.  

By definition, resilience is the quality of successfully withstanding, and recovering quickly, from difficulties, demonstrating a positively elastic nature.  

There are 1) resilient leaders, who create resilient cultures, and more broadly, 2) resilient firms, which benefit from these resilient leaders and cultures, while pursuing resilient strategy

Let’s discuss the first – resilient leadership. HPA has seen leaders thrive through the last three years with the following characteristics:

  • The ability to project calm, and relate with emotional intelligence:  Communicating in a way that speaks to people’s own anxieties, and addresses the ‘what does it mean for us and me,’ is at a premium during a crisis
  • An ongoing intellectual curiosity about the way things will evolve, even in down times:  Business inquisitiveness is not simply for times of growth adjacency expansion. It is equally important in downtimes
  • A willingness to engage one’s own network of counselors: Confronting volatility is not an individual mental exercise, and leaders benefit when they’ve built a mutual group of advisors
  • The capability to assess and pivot direction, with a narrative that appropriately socializes that change:  Certain strategic ambitions of necessity took a back seat in early 2020, and then re-accelerated, but with constantly changing conditions. Keeping one’s teams abreast of these changes to near-term strategic choice, and the underlying rationales, is central
  • The aptitude to align the organization around a shared purpose, even in change:  Purpose-driven organizations generate greater organizational commitment

Simply put – Resilient leaders improve the culture and adaptability of their organizations, even before the development of resilient strategy.

Firms will also benefit from resilient strategy, with greater agility in pivoting, as well as greater selectivity in key near-term choices.

Resilient strategy is individualized to a firm’s situation, including its financial well-being and industry characteristics. That said, resilient strategy is:

  • Intensely choiceful in the near-term, as a reflection of near-term conditions,
  • While still building adaptive capabilities for likely evolutions in the medium-term,
  • Ensuring financial stability,
  • While building more variable organizational resources,
  • All while reinforcing customer-centricity

Change is inevitable. Resilience is learned and intentional.  And leadership and strategy resilience has proven to ensure businesses build an edge that lasts, no matter what the sailing conditions.

If you’d like to build both individual and firm resilience, reach out to us at HighPoint Associates for a conversation.  

Justin Moser is Chief Operating Officer and Partner at HighPoint Associates. Prior to joining HighPoint, Justin spent over 20 years in general management, finance, strategy, and marketing leadership, first as a senior consultant with Bain & Company, and then in progressive responsibilities at Mattel, Inc.  Most recently, he served as Group CFO and Senior Vice President for Mattel’s Global FP&A, Investor Relations, Commercial Finance, Brand Finance, and Investment Finance organizations.