By Gabriella Rosen Kellerman, below, Chief Innovation Officer, BetterUp
Uncertainty and volatility have hit SMEs hard. 83% of UK SMEs are struggling to plan beyond 2023, as nearly two-thirds believe there is a risk they will have to close their business because of the cost-of-living crisis. How can businesses plan in order to avoid those negative outcomes, even in the midst of constant change?
Prospection is the uniquely human ability to imagine and plan for the future, even in the midst of uncertainty. Prospection is an essential skill SME leaders need to develop to ensure their workforces pivot, perform and ultimately thrive through a looming crisis.
Dr Martin Seligman and I recently released Tomorrowmind: Thriving at Work with Resilience, Creativity and Connection–Now and in an Uncertain Future, a guide to navigating the modern workplace. Amidst volatility in the world and at work, Tomorrowmind uses behavioural sciences to outline the key skills needed to drive forth organisational change amongst workers within large enterprises or small and medium businesses.
As part of the launch of Tomorrowmind, we recently hosted an event in London with business leaders and workplace press to discuss how these key skills apply in a corporate setting to empower workers. At that event, we spent a lot of time on prospection.
What is prospection and why is it important for SME leaders?
Prospection is our ability to imagine and plan for the future. It’s not about predicting but rather about preparing for a range of reasonably likely outcomes and using those to make an informed decision.
In situations of stress, business leaders who lack prospection may react with fear, and shift the part of the brain more connected to emotion and the fight-or-flight response. This may lead some business leaders to make decisions which may not be the most beneficial for their overall business outcomes.
As SMEs face rising costs and increased chances of burnout, prospection becomes an important skill for managers to both possess and build into their workforce.
The phases of prospection
Prospection happens in two phases. Phase one includes generating a variety of widely divergent future possibilities or scenarios that your business may encounter. Allowing for optimism and embracing the motivation that comes from imagining hopeful futures is key here. Practitioners should stay in this phase a little longer than comfortable.
A recent survey found that despite the uncertainties facing SMEs, many are optimistic. In fact, 58% anticipate growth– although curiously, they are unclear of where this growth will come from. Maintaining optimism, assuming the optimism is realistic, is advantageous for us in times of challenge and can motivate leaders to keep trying.
However, optimism alone is not enough. It must be coupled with a plan for reaching strong, results-driven goals.
This is where phase two comes in. Phase two of prospection is slower, more evaluative, and more realistic. Managers should select the most likely of the divergent futures, along with one or two unlikely possibilities that require a very different stance in the present. This allows them to imagine potential obstacles and work backwards to minimise setbacks. Think of this as a portfolio of possibility. Align resources to the most likely among them, while planting seeds of investment at the periphery for high-flier, less likely but highly consequential possibilities.
How can SME leaders put prospection into practice?
It may be easier said than done for small business leaders to tackle multiple challenges at once. Picking a very concrete piece of the puzzle to begin with rather than a nest of interwoven challenges may be a good first step. However, it is important to remember that for each piece they take on, leaders should honour both phases of prospection.
For the most likely scenarios, determine what changes you need to make to your business’ positioning and investments in order to be well positioned should each of these scenarios occur. Then, figure out what triggers will signal you to shift into the assumption that any given possibility is the one that will occur.
For example, if you are launching a new service with the potential for delays in the supply chain, create plans for alternative suppliers at key points in the chain. Create a communications plan to notify stakeholders, customers and clients of adjusted timelines, and figure out which projects can be expedited if needed to continue the growth of your business’ portfolio that quarter.
And for the unlikely possibilities? Make very small, thoughtful, high-impact resource investments to help position you for them.
For example, if you are focused on a hiring plan, and one highly unlikely possibility is that business will triple this year due to a sudden need for one of your products, you might ask your network for recommendations on recruiting agencies that are known for speed. Sending these requests will take you maybe 1-2 hours. But it will take time to hear back from your network, time you will be saving yourself in the very time-sensitive future you are preparing for.
By fostering prospection, SME leaders can prepare for a variety of unknowns and help their businesses pivot, problem solve and thrive in an uncertain economic environment.
Prospection builds strength in your people and your business
In times of uncertainty, it can be easy for managers to fall into certain traps when thinking about the future. Some may be unable to imagine optimistic futures because they may be used to simply reacting and spending time fending off the worst.
Prospection is a skill which needs to be developed and nurtured within a workforce. Investing in coaching for key players and people managers is a great way to help leaders foster these mindsets and skills to understand where they are strong and where they may get stuck in each of these phases. They can then engage in exercises to help them overcome these barriers.
Research has found that cultivating this one key mindset can help entire organisations be more effective at planning, all while quantifying potential risks. BetterUp data shows that those who harness prospection, report lower levels of anxiety (-34%), are more hopeful, are more productive and have greater life satisfaction than those with low prospection skills. These leaders also have higher-performing teams, ones with increased agility (+25%), engagement (+19%) and innovation (+18%).
Prospection offers a competitive advantage that leaders simply cannot ignore as they are future-proofing their organisations and teams. Leaders across every industry are experiencing unprecedented, uncertain times. It’s more important than ever for SME leaders to foster prospection.