This article was first published in Harward Business Review
Macroeconomic shocks and crises pose real, costly threats to companies, but so, too, does leaders’ overreaction. BCG’s Philipp Carlsson-Szlezak and Paul Swartz contend that without an understanding of the forces that drive disruptions, executives will have a hard time keeping their balance as economic conditions, and the narratives around them, seesaw violently.
In this article, the authors outline how leaders can better discern which risks—in the real, financial, and global economies—are genuine. They recommend letting go of prescriptive models and discounting doom mongering. Instead, executives should develop an eclectic economic perspective. By cultivating their judgment, leaders can see past the headlines to identify key causal narratives and respond with rational optimism.