How Strategic Leadership Can Help Businesses Survive Market Changes?
Market changes are increasingly unpredictable, businesses need to adapt. The law of the jungle applies, those who can adapt will survive. Those who can survive are inseparable from the role of strategic leadership in their business operations.
Strategic leadership plays an important role in navigating an increasingly dynamic market. Every leader, whether at the managerial or top executive level, needs to implement it. Strategic leadership helps leaders direct their organizations towards a big vision and inspires everyone in the organization to move together towards that big vision.
Strategic leadership is not only for large companies, even UMKM level businesses need to implement it. There was a research conducted by students of the Bandung State Polytechnic on a population of 557 restaurants and cafes in Bandung Wetan Regency to test how the role of strategic leadership implementation affects the competitive strategy of UMKM restaurants and cafes.
The results of the study on 50 UMKM samples from 557 UMKM restaurant and cafe populations showed that there was a positive correlation between strategic leadership and competitive strategy. Strategic leadership has an influence of 16.08% on the competitive strategy of UMKM restaurants and cafes.
MSME businesses have started to improve themselves by implementing strategic leadership in facing market changes. Has your business started implementing it? The following will explain how the role of strategic leadership can help your business survive amidst dynamic and unpredictable market changes.
Business Challenges Due to Market Changes
Do you still remember how your business survived when COVID-19 paralyzed many businesses? However, on the other hand, there are businesses such as digital businesses that are actually growing. From COVID-19, there is a big lesson that businesses need to be prepared for all kinds of factors that can shake the market. Not only preparing, but also adapting in order to survive.
Moreover, with the current conditions, the change in government leadership has made many policies that have an impact on the people's economy. It is still fresh in the memory, how the budget efficiency policy for many ministries also has an impact on the people's economy because budget efficiency means reducing state spending so that it can have an impact on MSMEs or companies that usually partner with the government.
Market changes will always exist and businesses cannot avoid them. The factors that influence it vary from social, economic, political, technological factors, to changes in market preferences.
Market changes can cause a business to lose its relevance in the market. We can learn from Kodak's bankruptcy. Who didn't know Kodak in the past? Kodak has been a market leader in photography. However, as technology has developed, Kodak has been late to innovate. The market already likes digital photography, but Kodak still sticks with its products that have not utilized digital technology. So that its products can no longer be relevant to the market and are abandoned.
Not only does it make a business irrelevant, the implications of market changes are very large for businesses and become challenges that need to be conquered. Here are some challenges that need to be addressed from this dynamic market change.
1. Uncertainty and Business Risk in Sight.
Market changes often come with high uncertainty, such as regulatory changes, economic fluctuations, or rapidly changing consumer trends. This can cause confusion in decision making and risks that are difficult to predict.
2. Delay in Responding to Market Changes
Companies that do not have strong strategic leadership often struggle to respond quickly to market changes. This can leave them behind competitors who adapt more quickly. 3. Loss of Competitiveness
Market changes cause shifts in consumer preferences, new technologies, or industry regulations that can make a company’s products or services less relevant.
4. Decreased Productivity and Efficiency
When markets change, companies may find it necessary to change their operating models. Existing processes and systems may no longer be efficient or effective in dealing with new situations, which can lead to decreased productivity.
5. Loss of Focus on Long-Term Vision
Companies can get caught up in short-term efforts to survive in a changing market, losing focus on their long-term vision and goals. This can lead to a loss of direction and an unintegrated strategy.
6. Decreased Employee Motivation and Morale
When market changes cause uncertainty or confusion, employees can feel anxious and less motivated, which impacts team morale and performance.
7. Challenges in Resource Management
Market changes can affect the demand for certain products or services, causing imbalances in resource management, whether in terms of labor, raw materials, or capital.
8. Difficulty in Maintaining Customer Satisfaction
Changes in customer preferences or competitor innovations can make it difficult for companies to maintain customer satisfaction and loyalty.
9. Difficulty in Collaborating with Business Partners
Market changes can affect a company's relationship with business partners or suppliers, for example, due to uncertainty in supply or shifts in product demand.
10. Difficulty in Managing Organizational Change
When the market changes, companies often need to change their organizational structure, internal processes, or work culture. These changes can trigger resistance from within the organization.
How Strategic Leadership Plays a Role in Adapting to Market Changes
Like a ship sailing the ocean, sometimes the captain will be faced with ocean conditions with calm, moderate, to stormy waves. As long as the captain already knows the destination he is going to, he will do everything he can to sail the ocean. A clear goal will move the crew to help him navigate the ship so that it arrives safely at its destination.
Leading a business is like the captain of the ship. The main characteristic of a leader who has strategic leadership skills is that he has a strong vision and passes on the spirit of achieving that vision to the people he leads. A strong vision becomes the mainstay when market changes occur. If there is a change, the leader can navigate to take another path so that he can still achieve that vision. So that the vision that is formed is not a short-term vision, but a long-term one. In the previous section, we have seen how market changes impact the existence of a business. The impact not only affects the amount of income received by the business, but also affects how the business operates. Therefore, here are some roles that you can take over to implement strategic leadership so that businesses or companies can continue to survive in the turmoil of market changes.
1. Preparing for Change and Adaptation
A leader who has strategic leadership skills will have the sensitivity to be able to predict market trends and consumer needs that change dynamically. Because they are always used to thinking about long-term visions, their view of the market is not only focused on the present, but also predicts how the market will be in the future.
The sensitivity of a person with strategic leadership will navigate their company to try to adopt new technologies, build a culture of innovation in their company, or adjust their business model to adapt to market changes.
2. Making the Right Decisions in Times of Crisis
Market changes are unpredictable from year to year, even market trends this month can be different from next month. When change is already visible, you as a leader need to be responsive, fast, and precise in making decisions.
Decisions taken in the near future should not be careless. Because making the wrong decision will take the business in an undesirable direction.
3. Increasing Organizational Agility and Flexibility
Rigid bureaucracy makes business slow to run. This is common in large corporations, making the organization inflexible to respond to change. Businesses need to build an agile organizational culture, where teams can quickly adapt to changes and new challenges. This includes adjusting business processes, product development, or even changes in the way they communicate with customers.
Businesses can adopt the startup method in developing their business models and products. Startups will usually test whether their products sell in the market by creating an MVP (Minimum Viable Product) or a simple version of their product but still functional. From the MVP, they will get feedback from consumers for further development.
4. Inspire Innovation and Creativity
Innovation is the absolute key to surviving market changes. Innovation doesn't always have to create something new. Innovation can start from updating what already exists. For example, updating how to use it or something like that.
You need to grow a culture of innovation as a leader to the team. Provide open space for the team to express and convey their innovative and creative ideas without any justification. An environment that supports innovative and creative ideas can support creative experiments and solutions, which can lead to the development of new products or services that are relevant to changing market needs.
5. Building Strong Relationships with Stakeholders
Business is not just about you, your team, and your customers. Business is an interconnected ecosystem. There are investors, customers, employees, suppliers of raw materials, business partners, and even the surrounding community. One of the things that keeps a business going in an era of dynamic market changes is because of the close relationship between the business and stakeholders.
Leaders who have strategic leadership will ensure a more transparent and mutually beneficial relationship with business partners, and collaborate to find joint solutions in dealing with market changes. Effective leaders can maintain open communication and manage their expectations well, which in turn will strengthen the company's position in the market.
6. Focus on Long-Term Vision and Mission
Having a long-term vision and mission allows businesses to determine what steps need to be taken to achieve that vision and mission. Even if market changes occur, they can flexibly adapt in other ways as long as the vision and mission are long-term visions and missions.
A long-term vision and mission make you as a leader not only focused on short-term profits, but more on the sustainability and growth of the company in the longer term.
It's Time to Prepare Leaders with Strategic Leadership Early
Market changes will continue and never end. Never be satisfied with your current business. Leave room to continue to innovate and adapt to market changes that are often unpredictable.
In the business world, there is no definite key to survival because everything is dynamic. The main key lies in the leadership milestones in the business itself. In order for your business to remain relevant and survive and even thrive in a dynamic market, business leaders need to have strategic leadership skills.
Leaders who have strategic leadership skills can provide clear direction and ensure that the company can adapt quickly to external changes such as technological developments, changes in consumer preferences, economic fluctuations, and global competition.
Has your business implemented this strategic leadership? If not, there is no right time to start it other than now. Don't wait for the right time. Because the right time is now.
Learn strategic leadership from those who are experienced, such as following a program from Prasmul-Eli who has experience handling national, BUMN, and multinational company clients.
There is a short program from Prasmul-Eli on how to become an effective leader for those of you who want to hone your strategic leadership skills in terms of creating strategies to achieve organizational goals and how to mobilize teams to work together towards those goals. If you want a program that can be personalized to your company's needs, you can request a corporate program service from Prasmul-Eli. This corporate program service will be specifically designed to meet your company's needs.
