According to Forrester’s (Nasdaq: FORR) report, How To Thrive Through Volatility, business and technology leaders need to quickly adapt to current economic uncertainty. This year has been marked by unpredictability and volatility — new tariffs, trade wars, outages, cyberthreats, supply chain disruptions, and geopolitical tensions are all contributing to global market instability. As a result, business leaders may have an impulse to pause planned initiatives and spending and wait to see how things play out. Yet with no end in sight to this volatility, leaders should double down on investing in areas that position them for future growth while proactively optimizing costs, pivoting resources, and scaling back on non-essential projects.
As competitors retreat, market opportunities will emerge for those poised to take control. For business and technology leaders to thrive through volatility and come out ahead, they will need to focus on four critical areas. These include:
- Fiercely optimizing tech investments and simplifying technology. This is not the same as ruthless cost cutting, which, when done reactively, often undermines long-term value. Instead, it’s about identifying opportunities to streamline — such as eliminating redundant software and renegotiating to drive greater efficiency and savings. It’s also about reprioritizing — not pausing — modernization plans to be more nimble, secure, and prepared to make the best use of AI and other game-changing technologies.
- Reaffirming brand value and prioritizing customers. Understanding and prioritizing which customer segments to serve will help leaders adjust their brand’s value proposition to reflect volatility shifts.
- Excelling at leading change. To successfully adapt to volatility, leaders must provide confidence and clarity to their organizations. Along with building bidirectional listening strategies and communicating transparently to employees, leaders should cultivate a culture of continuous learning and upskilling.
- Proactively managing risk. More than 40% of business and technology leaders cite economic uncertainty as the systemic risk that they are the most concerned about. While leaders can’t stop volatility from happening, they can manage it by taking a continuous, holistic approach to risk. Forrester recommends managing three sources of risk — enterprise risks tied to their strategy and factors fully within their control; ecosystem risks they can partially control arising from third-party relationships; and external risks they can’t control, including tariffs — and creating scenario plans for addressing each risk type.
“Five years after the pandemic, the business world, in many ways, feels even more tumultuous and unpredictable,” said Sharyn Leaver, chief research officer at Forrester. “Unlike five years ago, when the source of the disruption was a single, unknown pathogen, today’s volatility comes from a myriad of forces beyond leaders’ control. Yet there is opportunity in disruption — even in times like these. By taking charge and refocusing on tech resource and spend optimization, change leadership, and risk management, leaders can prevail where their competitors can’t — unlocking new areas for innovation and growth.”
- Brands and consumers
VP principal analyst Dipanjan Chatterjee:
“These tariffs are going to take a bite out of consumers’ household income — and the lower the income, the bigger the chunk. In response to this income hit and the continued fog of uncertainty about their future earnings, consumers have already begun to take several steps to manage the implications for their pocketbooks.
“People are stocking up because they know prices will rise. This is somewhat futile, however, as it’s not entirely clear which categories will be hit hardest. More importantly, there isn’t a pantry large enough to accommodate years’ worth of trade policy chaos.
For brands: “Do the homework on your customer segments. Apply a financial resilience filter before you react in haste, because not every person and category will experience the economic effects in the same way, and a shotgun approach to giving away margins will unnecessarily deplete profits. Look before you leap — chances are that you will have to leap, but at least you will be going in the right direction.”
You can read more about the impact the tariffs will have on brands and consumers in this blog
- Apple
VP principal analyst Dipanjan Chatterjee:
“Apple is one of the few major tech companies with a significant hardware business, making it much more exposed to the tariff situation. As tensions escalate with China, it jeopardizes one of its major markets for iPhones, where it’s already struggled to grow in the face of fierce competition.
“As a company with lucrative margins on its devices, Apple can absorb some of the tariff-induced cost increases without significant financial impact, at least in the short term. Apple is also uniquely positioned to pass on a reasonable chunk of the price increase because it has built a price moat around itself with exceptional brand equity and customer experience. The brand commands better loyalty than its competitors, and it is unlikely that a manageable price increase will send these customers fleeing into the arms of Android-based competitors.”
“Apple has announced plans to invest $500 billion in the US over the next four years, but I predict they will adopt a wait-and-watch approach, hedging their bets and saying more while doing less. The primary reason for this is the extreme volatility surrounding these policies. In such a volatile environment, Apple will be loath to take drastic action that is hard to do and harder still to undo.”
