​How To Thrive Through Volatility

When a global pandemic forced a global lockdown in March 2020, companies hoped the disruption would be a short-lived inconvenience. Those hopes were shattered as global supply chains buckled, the floodgates of cyberattacks swung open, and geopolitical conflict escalated. Five years later, there’s even more volatility. And this time, there’s no shared focus on containing an unknown pathogen and “getting through it together.” Volatility in 2025 includes massive global outages, cyberthreats, new tariffs, trade wars, divided and impatient customers — and, of course, economic concerns. Forrester’s 2024 data shows that economic uncertainty was the systemic risk most frequently identified by business and technology professionals as one of their primary concerns.

One obvious, but often misguided, step to deal with the chaos: cost cutting. Reactive, brute-force, unilateral budget cuts typically hurt more than they help, particularly in a volatile business environment, as they are independent of business strategy or well-planned scenarios. To prepare and come out on top, map proactive cost-optimizing responses — resource pivots, project cuts, timeline adjustments, and swift communication, for example — to potential scenarios like global or regional recession, demand surges, or regulatory shifts. And yes, this should also include possible investment increases in some areas because market opportunities will be ripe as competitors falter.

Target Opportunities To Simplify Technology

As you develop technology cost optimization scenarios, explore classic cost and resource levers with fresh eyes as the fast-moving technology market opens new possibilities. Examples include:

• Wring out redundant tools, abstraction layers, and third-party software. Likely candidates for rationalization include collaboration, CRM, and project management tools. Abstraction layers such as hypervisors, app servers, containers/Kubernetes, API gateways, infrastructure automation, and management platforms now create redundancies with native infrastructure platforms and can each cost over $1 million annually. The goal isn’t just less redundancy but creating a tighter, cleaner, composable tech stack that sets you up for data consistency, security, and AI readiness. Guide your rationalization journey by starting with classic yet effective application scoring. Next, leverage modern software asset management approaches, and use broader technology lifecycle management.
• Optimize your cloud costs. Hidden within your cloud bills is waste. Unless you’re an advanced FinOps shop, there is opportunity for immediate savings leveraging native cloud cost management tools or a third-party cloud cost management platform. These solutions help identify unused, untagged, ownerless, unattached, and poorly fitted instances that often yield an initial 30% savings (depending on how optimized your estate is today). A multicloud enterprise with $20 million-plus per platform may find 15–20% discounts during hyperscaler negotiations with additional incentives (e.g., dedicated FTEs, credit to fund migration services support), but you’ll need to prove growth, use of AI services, and credible alternatives in terms of spend on competitors to move the needle.
• Reprioritize your modernization efforts rather than delaying. Every company modernizes at different rates. You can’t afford to pause these efforts; instead, concentrate on the most critical initiatives. This can be a challenge, as tech debt exists at every layer: software, security, hardware, customization, skills, and suppliers. And static silos are equally problematic to modernize, making it difficult to execute on new initiatives. Where should you focus? Data management is essential to execute on AI and other intelligence efforts. Strangler patterns can help you eat away at legacy custom software. IT admins need to transition to SRE roles, if this is not already done. Mainframe modernization may need to wait; lower-priority initiatives may never move. Generally, integration approaches can breathe new life into legacy operational systems.
• Push hard on your contract negotiations; revisit where necessary. Reducing large contracts in the next six months can offer short-term relief through discounts, consolidation, or lower commitments. Requesting coterminous dates can simplify contracts and provide an opportunity to renegotiate and optimize your agreements. Microsoft, SAP, and Oracle deal with large enterprise contracts, and coterminous renewals are possible. IBM’s wide range of offerings makes coterminous dates useful. Economic hardship is a chance to revisit contracts for discounts. Use data and analytics to strengthen negotiations by showing value and identifying savings. Focus on high-value areas that are low-cost for vendors to deliver. Lastly, flexibility is more important than cost savings, even in hard times.

Reaffirm Your Brand And (Re-)Prioritize Customers

During periods of high volatility, customer obsession is more than a nicety; it’s a necessity. Don’t let shifting winds and currents blow you off course. Customer-obsessed leaders across both B2B and B2C industries: Analyze, prioritize, and reaffirm your brand and customers. Then, be bold — not rash. Implement scenario planning, get creative, and communicate brilliantly.

• Ruthlessly prioritize target customers. It’s time to review your customers — and the segments they belong to. This disciplined review of your customers will reveal whom you must serve and who isn’t right for your business — and will help you make tradeoffs. Those serving consumers: Analyze your customers’ discretionary spending capability, from big-ticket items to the incidental fees and subscriptions that add up. For B2B organizations, prioritize target market segments to improve buyer focus, drive greater cost optimization, and foster stronger organizational discipline. Rapidly assess potential impacts from market volatility by segment across geographies, industries, and customer types (e.g., enterprise versus small- and medium-sized business). Leverage existing partners and add new ones to influence prioritized-segment buying groups.
• Adjust your brand value on firm foundations. Brand strategy is a deliberate process involving significant rigor to segment customers, align portfolios, and craft meaningful, differentiated, and credible value propositions. It is very unlikely that the current volatility affects any of those fundamentals — hastily upending a carefully considered brand strategy will only come back to bite you once the volatility shifts or subsides. Instead, modulate your brand’s value proposition. Our value framework has four dimensions — economic, functional, experiential, and symbolic. For example, if uncertainty makes customers financially wary, then it’s time to dial up economic value, as McDonald’s has done by emphasizing its value menu.
• Double down on customer insights and communication. With your customer segments firmly in mind, mindfully govern customer communications across the business — don’t send out a survey to gather information that is already available from other sources. Lean on zero-party data for clearer insight into consumer interests, intentions, and personal context. Foster a spirit of empathy (as customers are also experiencing volatility), and make sure that frontline customer-facing functions prioritize listening. Proactively share insights in near real time, identifying processes that cause customer friction to drive improvements and greater resilience. Reallocate customer-facing resources when needed and continue to invest in communities to capture new insights. The more you make customers the pivot point for change, the more likely you will not just weather the storm but come out of it stronger.
• Tap market confusion to unleash creativity and profit. The time has returned to engage in low-cost innovation and fast experimentation. Remove persistent obstacles and endless debates in favor of trying, learning what works, and rolling it out. Use the “we are desperate to try anything” mentality and the fast-changing nature of business to your advantage and roll out new ideas. These could include ways of accessing new markets and customers, new educational materials that shed light on larger changes, or new tools to help your customers navigate uncertainty. Don’t neglect subtractive innovation, a mindset and process aimed at improving a company’s business through subtraction rather than addition — perfect for today’s cost-conscious environment.

At this point, most leaders are no strangers to turbulence and budget pressures caused by unstable market conditions, tariffs, and today’s changing customers. But today’s changes are rapid and global and have seemingly unending downstream effects. Plus, volatile change today can get reversed tomorrow. Do not blindly abandon long-term, future-proof strategies. But do prepare your leaders — at all levels in your organization — to meet change at a moment’s notice and keep a steady hand on the future.

• Be a model for change and a steadying force. Leaders must provide confidence and clarity to maintain stability despite conditions that most have never experienced. Trust in leadership is often low during times of change and financial hardship, though paradoxically, in 2022, during the worst of the pandemic, our global survey found that confidence in executives’ ability to manage disruption rose to unprecedented levels — this is because effective change leaders become their best selves in the face of adversity, demonstrated by clarifying vision, resolving uncertainty, identifying barriers, releasing resources, listening and responding, and celebrating successes.
• Balance your focus on process and people. Many change leaders make the mistake of over-rotating on process during turbulent times. But organizational change requires human behavior change. Adaptive organizations navigate volatility by becoming learning organizations that continuously engage and are conditioned for adaptivity. Your change management practice must give equal time to people and new processes in order to maintain engagement and productivity through times of continuous change. This means ensuring that you are measuring beyond milestones to keep your change on track. It means developing robust, bidirectional listening strategies to understand the impact of the change and adapt. It means leveraging leadership communication and storytelling to maintain cohesion and drive support for the change.
• Practice self-care to be at your best, and grant your people the same grace. When leaders are in constant firefighting mode, stress levels are high and remain high unless explicit action is taken. For example, effective mindfulness routines have been found to moderately reduce symptoms of anxiety and depression, two very common conditions for people to experience during immense times of stress such as a period of layoffs. Don’t make the mistake of believing that the highly productive people who you are relying on to steer your ship in a new direction aren’t also burning out, because you can be both burning out and highly engaged — and this includes you. Acknowledge that you and your employees experience change in similar and different ways, whether that be layoffs, business challenges, or even the barrage of news headlines. If leaders are struggling with mental stress during these periods, they will not be able to effectively lead their teams. Invest in yourself as a person and then lead by example through storytelling to help your people improve their mental well-being, which will lead to better outcomes for your business.
• Make continuous learning part of your culture. Organizations that survive and thrive in times of volatility do so by cultivating a culture of continuous learning, enabling teams to adapt quickly as new technologies such as AI — and new business challenges — emerge. Learning culture involves two separate but related disciplines. One is upskilling. Learning organizations actively provide time and resources for employees to develop new skills. The second is a portfolio of practices that promote process improvement. Things like after-action reviews, cross-functional information sharing, and transparency are hallmarks for learning culture. Leaders must foster a psychologically safe environment where individuals feel that they can speak up when they disagree or see a problem. By integrating learning into everyday workflows, you foster agility and keep your talent pipeline “future-ready.” In turn, this adaptive workforce can pivot more rapidly to evolving priorities, turning uncertainty into opportunity and positioning your organization as a driving force for sustainable innovation and transformation.
• Inspire and motivate employees at every step of the way. Employee satisfaction impacts customer and partner satisfaction, and volatility affects people differently. Some may thrive on the opportunity that volatility brings, while others may struggle to adapt. Employees may have family members and personal situations impacted by market volatility (e.g., tenured employees remaining in the workforce longer). They may have personal disagreements with changes in the governmental sphere that are contributing to stress on the business and employees. As a result, it is critical in periods of volatility to keep employees apprised of how the company is measurably responding to immediate business threats in their control while proactively adjusting to more likely long-term changes. Listen to employees closest to your customers and solicit ideas for potential company actions. Unify everyone by keeping them focused on the company’s brand promise and how the actions that the company is taking supports it.