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Managers’ Role in an Era of Wild Cards: Seeing Opportunities Even at Rock Bottom

Managers’ Role in an Era of Wild Cards: Seeing Opportunities Even at Rock Bottom

Organizing Committee of the Association of Managers Forum

Global economic trends that have emerged in 2020 have been reevaluated in the context of the pandemic and low oil prices. Businesses have reconsidered their windows of opportunity and potential threats. This is evidenced by a foresight study conducted by the Association of Managers of Russia and co-authored by Alexander Chulok, Director of the HSE Institute for Statistical Studies and Economics of Knowledge.

‘Our goal was to find out what threats and windows of opportunity businesses see today. In order to initially identify them, we used our advanced development—the iFORA big data mining system. We then conducted a survey of more than 230 large companies,’ Alexander Chulok, Director of the ISSEK Institute for Statistical Studies and Economics of Knowledge, told the HSE News Service. The questionnaire was completed by heads of HR, PR, FCOs, marketing directors, and other top managers. The research results were presented on September 15 at the Forum of the Managers Association called The Future of Management Professions: Beyond the Digital Age.

The report shows that a manager’s role as an individual increases significantly in times of change. This is largely due to the fact that we are moving from understandable and well-predicted external conditions and trends to wild cards—events with low probability of occurrence but large-scale impact.

According to Alexander Chulok, at the beginning of 2020, the majority of experts agreed that we were entering an age of new global trends, and HSE has played a direct and significant role in identifying these trends. They include various consequences of climate change, the personification of medicine, health promotion, immune response development, the emergence of antibiotic-resistant bacteria, the ‘smart city’, virtual and augmented reality, and industrial 3D printers. They also include, of course, factors such as total digitalization and socio-demographic trends associated with population ageing, the emergence of an entire class of products for elderly people, which, according to existing estimates, can create a trillion-dollar market for goods and services.

‘But then we were dealt two wild cards—the pandemic and low oil prices,’ says Alexander Chulok. In particular, it appeared that the world was unprepared for the pandemic despite several years of innovation investment growth and R&D. The expert is sure that the combination of these two wild cards will produce very strong structural and transformational effects. The survey of managers was conducted just at the time when ‘these two wild cards foiled all plans’, which makes its result ‘even more interesting’.

Top managers regard the following trends as windows of opportunity:

 the acceleration of total digitalization and the transition to smart systems;

 the transfer of at least one third of employees to remote work;

 the growing demand for customized products and services;

 the growing importance of companies’ internal eco-environment in order to ensure employees’ productivity and motivation;

the lessening importance of the office as a workspace; the transition to online education.

For example, experts are still actively discussing the effectiveness of remote work. Respondents were asked to evaluate the transition of at least one third of their staff to remote work, explains Alexey Chulok. 73% of them said that this format was not a threat, but a window of opportunity. Notably, the questions were asked of the management, and not of rank-and-file employees. 78% of the respondents mentioned their intention to impose more stringent requirements with regard to employees’ competence, including their ability to fulfill combined functional duties.

‘I am seeing a shift away from the traditional Russian managerial idea of ‘I'm the boss—you're the fool’ to the idea of partnership and conscious behavior,’ says Alexander Chulok.

As for threats to business, Chulok notes the following particular feature: purely economic threats are now viewed as the most dangerous ones for companies, while ‘in our numerous previous surveys, we observed that respondents primarily cited either ineffective government policy in one form or another or sanctions’.

In this case, about two-thirds of the respondents noted the pace of recovery of the global and Russian economy. Many respondents are employed by companies that do business abroad or export their products—that is, companies that are deeply embedded in international global added value chains, the expert adds.

Top managers deem the following trends as threats:

 A recovery of the Russian economy no earlier than in 2022;

 The decline in global economic growth;

 Complicated access to foreign markets; the strengthening of foreign policy factors;

 A sharp decline in large-scale investments in long-term projects;

 A drop in prices for feedstock and the likelihood of low prices to persist;

 The growing impact of epidemiological factors on business; the expansion of the role of the state;

 Increased cybersecurity risks;

 A reduction in the pace of innovative development.

Also of note is that when asked how the pandemic affected demand for products and services, about half of the managers answered that it either had no negative impact or no impact at all. Only 6% of the respondents said that the impact on business was very negative. According to the report, the sectors that have benefited from the quarantine restrictions include agriculture, telecommunications, and online platforms. The crisis had a negative impact on construction, metallurgy, and the energy sectors. At the same time, representatives of trade and pharmaceuticals provided mixed answers— 50/50, the HSE expert says.

What managerial skills will be in demand in the future? The interviewed managers noted the ability to see opportunities in complicated, uncertain conditions; complex multi-level problem solving; emotional intelligence; critical thinking; and the ability to develop a vision and to bring people together around that vision.

Alexander Chulok

Alexander Chulok

‘Please note that the competency that we called ‘the ability to see opportunities in wild cards’ now ranks first for managers. This is an integral competency. It implies both a managers’ global vision and the ability to put together a team, to listen to it and hear it. I believe this is a crucial result of the study. It shows that we now move on to a combination of hard skills and soft skills (nobody would doubt the need to have digital skills nowadays). As an HSE graduate, I can say that these are the very competencies of the future that our university gives its students.’

Companies with flexible management, a readiness to delegate responsibilities, and established teamwork structures achieve greater success even in the wild card era, Alexander Chulok says. ‘Based on the results of the survey, I am ready to suggest the following hypothesis,’ he says. ‘During the pandemic, a high-quality business model and management paradigm have no less impact on businesses’ efficiency than the economic sector to which that business belongs.’

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