The storm hit without warning. A key supplier went bankrupt, raw material prices skyrocketed, and analysts quickly declared that the company was in deep trouble. But inside the boardroom, the CEO was anything but panicked—she was preparing a response and considering all possible plan Bs. And trust me—there is always a plan B, which sometimes turns out to be even better than plan A. Sure enough, within weeks, new suppliers had been secured, operations streamlined, and pricing adjusted to maintain margins. What initially seemed like a setback became an opportunity to strengthen the company and explore new possibilities.
Market analysts often judge companies based on the assumption that they are always victims of external conditions, without taking into account how quickly CEOs and strong management teams can react. I mean, high CEO salaries don’t come out of nowhere. These salaries are paid precisely to attract leaders who are always ready to respond to changes and find silver linings in even the toughest situations.
Let’s look at a few examples: When inflation surged in 2022, many analysts predicted that Starbucks would struggle as consumers cut back on discretionary spending. However, the company’s management responded swiftly. They focused on high-margin product innovations, adjusted prices strategically without driving customers away, and expanded their loyalty program to increase customer retention. By the end of the year, Starbucks’ sales figures remained strong, proving that strategic responses from management carried more weight than analysts’ pessimistic forecasts. And sure—one could argue that a good cup of coffee is actually a necessity.
In 2023, Netflix faced slowing subscription growth, leading analysts to predict a revenue collapse. But the company acted quickly. It introduced a new ad-supported subscription tier, restricted password sharing, and improved cost efficiency in content production. These moves not only halted the decline in subscriptions but also reduced expenses. This was a clear example of how management wasn’t sitting idly by but instead took swift and intelligent action.
For years, analysts have focused on regulatory challenges and rising costs for Uber while often underestimating how the company has adapted to these challenges. When California passed AB5 in September 2019 – a law that could have classified drivers as employees – Uber immediately adjusted its app’s registration features to reinforce driver independence while maintaining its legal status. Similarly, when fuel prices soared, Uber modified fares and added a fuel surcharge to support drivers, ensuring both supply stability and service quality.
The Myth of the Sitting Duck
One of the biggest flaws in market analysis is the failure to account for management’s reactions, relying instead on static calculations and assumptions of inaction. Changes in fuel prices, interest rate hikes, or shifts in consumer behavior are often treated as if companies remain passive and do nothing to adapt. The reality, however, is that dynamic companies and strong leaders respond by adjusting pricing, operations, and product offerings.
Business markets are never static, and neither are corporate leaders. The idea that a company’s fate is sealed the moment external conditions change underestimates the role of management. CEOs and leadership teams are not spectators; they are active participants who anticipate changes, adapt to them, and often turn them into opportunities—with great success.
All of this comes to mind now as discussions about external business and market conditions grow louder. COVID-19 triggered massive disruptions, and management teams worldwide responded in record time. Now, tariffs are a hot topic, and I have no doubt that plan Bs are being developed and adjusted in nearly every executive office across the globe.
Photo taken at Mercato in Addis Ababa, the largest open-air market in Africa.