8 Strategic Filters CEOs Can Use to Evaluate Tariffs and Other Complex Situations
If you’re a CEO looking out at this volatile business landscape and wondering, “What’s going to happen next?” then you’re asking the wrong types of questions.
Instead, run your company’s most pressing issues through these eight strategic filters. You’ll arrive at answers that you can use to identify the best course of action and lead decisively.
As a case study, let’s use this strategic framework to assess specific ways that tariffs could affect your company and build actionable plans to neutralize weaknesses, flip challenges into opportunities, and keep Making BIG Happen.
1. Impact Filter: “What’s at Stake?”
Money, sure. But look beyond your bottom line. Clearly define the financial, operational, reputational, and strategic stakes involved. Clarify what could be lost or gained from the situation to broaden perspective and prioritize actionable solutions.
Questions to Ask:
- What is our best-case and worst-case scenario?
- How significant is this decision’s impact on our revenue, profitability, market position, and reputation?
- Are we adequately considering both short-term pain and long-term consequences?
Tariff Action Items: Once you’ve run the BIG numbers and determined the true impact of tariffs, zero in on the smaller leading KPIs you can manage to keep your company progressing in the right direction. If your material costs are too high, look for new links you can add to your supply chain. If your margins are too thin, consider moving into a new market, broadening your customer niche, or upgrading tech and talent to improve efficiency.
2. Time Horizon Filter: “How Urgent? How Durable?”
Some crises are more urgent than others, and more impactful in the long run. Use this filter to evaluate if time is a luxury you can afford.
Questions to Ask:
- Is this situation likely to be resolved soon, or could it persist indefinitely?
- Does this decision require immediate action, or can we “wait and see”?
- How long would it take to unwind this decision if circumstances shift?
Tariff Action Items: When assessing the long and short of tariffs, your conclusions will probably fall under “yes, and” rather than “either, or.” Use clear communication to all company stakeholders so everyone knows you’re taking the situation seriously. Call a leadership meeting where you can debate and commit to a short-term action plan that will keep you in the black; schedule a follow-up once your AI and analytics teams have had a chance to game out all long-term scenarios.
3. Reversibility Filter: “Can We Undo This?”
In unpredictable business environments, the ability to maintain strategic flexibility is key. Clarify the degree to which your potential decision is reversible. And if you’re leaning towards a choice that could permanently change your infrastructure, core competencies, culture, or geography, make sure it’s the right choice.
Questions to Ask:
- If we get this decision wrong, how easily and quickly can we reverse course?
- How flexible or adaptable are we if the geopolitical landscape changes dramatically?
- What investments or commitments would lock us into an irreversible path?
Tariff Action Items: U.S. tariff policy could change overnight with the stroke of a pen. That new factory you’re thinking about building, that agreement you’re negotiating with a new supplier, or that C-suite candidate you’re thinking about hiring won’t be as easy to reverse. Stay flexible, and beware short-term fixes that could jeopardize your long-term path to BIG.
4. Strategic Alignment Filter: “Does This Fit Our Vision?”
Reacting and planning are not the same thing. Every decision a CEO makes should align strategically with the company’s long-term goals, core values, mission, and competitive advantages.
Questions to Ask:
- Is this decision aligned with who we are, what we do, and how we want to do it?
- Are we making a tactical reaction to a short-term disruption at the expense of long-term objectives?
- Does this decision strengthen or weaken our competitive position in the market?
Tariff Action Items: Many companies will react to tariffs with obvious quick “fixes” like price hikes and layoffs. In some cases, these moves may be unavoidable. But you can plan for them via compassion and empathy rather than cold cost-cutting. And while realigning your supply chain and deliverables to the U.S. might raise your costs, raising your quality of service and refocusing your narrative on sustainability and job creation might ease sticker shock for your customers.
5. Stakeholder Filter: “Who Else Is Affected?”
Broaden your perspective on the true scope of the problem and evaluate the wider impact on all relevant stakeholders: customers, employees, suppliers, regulators, shareholders. Any move you make to satisfy one group could have negative repercussions for another — and for you as CEO.
Questions to Ask:
- Who else, internally and externally, is impacted by this decision?
- Have we fully considered and communicated to key stakeholders the consequences or benefits of our approach?
- Could stakeholder responses (regulatory, customer, competitor) change the feasibility or success of our chosen course?
Tariff Action Items: In the immediate aftermath of tariffs, the focus has been on Wall Street (shareholders). If the tariffs stand for a quarter or two, focus is going to shift to Main Street (employees, customers, and local economies). Your battle plan needs to maintain balance and resolve tensions between these stakeholders. Stay on top of all the little details that could have a BIG impact on your company’s across-the-board performance: customer satisfaction numbers, relationships with your suppliers, potential regulatory issues, and internal and external communications. Act with integrity and you’ll maintain trust.
6. Assumptions Filter: “What Must Be True?”
Take off your blinders and challenge all baked-in assumptions about your business. Anything you’re taking for granted could have unexpected consequences in this volatile environment.
Questions to Ask:
- What assumptions are we making about geopolitical events, market responses, competitors, customers, and regulations?
- If these assumptions turn out to be false, how significantly does that alter our decision?
- Are there ways to test or validate our assumptions before committing substantial resources?
Tariff Action Items: Are you assuming tariffs are temporary? Permanent? You could be wrong either way. A smaller first step, like reshoring a portion of your supply chain or test marketing a new product, might make it easier to build out contingency plans. A third-party advisor — like a CEO coach — might also see warning signs that you and your C-suite are overlooking.
7. Optionality Filter: “Does This Preserve or Expand Our Choices?”
Your company can be BIG and nimble at the same time. The narrower your path forward right now, the easier it will be to trip or get stuck. Investigate multiple pathways and sketch on-ramps towards each.
Questions to Ask:
- Does this decision preserve, limit, or expand our strategic options going forward?
- How might conditions evolve that would make flexibility particularly valuable?
- Are there alternative paths that create fewer constraints for our future decisions?
Tariff Action Items: The pandemic should have taught CEOs the value of broadening supply chains, customer pools, and technological competencies. Adding a few extra domestic links could be a long-term advantage whether tariffs are permanent or not. Investing in more robust AI data collection and analysis could also help you anticipate and prepare for your next pivot.
8. Competitive Advantage Filter: “Do We Win or Lose Competitively?”
Don’t stop trying to win just because the game became harder. If you retreat, you’re just handing your competition more options and potential advantages.
Questions to Ask:
- Does our proposed response enhance or weaken our competitive position relative to our industry peers?
- How might our competitors respond, and how can we position ourselves ahead of their reactions?
- Can we exploit uncertainty by moving faster, smarter, or differently than our competitors?
Tariff Action Items: Stay on the offensive. Strengthen your supply chain where competitors are weak. Identify acquisition targets whose long-term value might be depressed by short-term inability to cope with tariffs. Show disgruntled industry all-stars that your company is sticking to a dynamic vision and offer them a place in your BIG future.
Keep Making BIG Happen
Great CEOs spend their time working on just 5 things: Vision. Cash. Relationships. People. Learning.
Tariffs aren’t on that list.
Neither was COVID, the last market correction, the last social media firestorm, the last election, or the last hurricane. These things are just variables. They will only define your company’s future if you let them.
Find the inspiration and the courage you need to stay true to your vision. Tariffs may change your path forward, but with proper strategic planning and execution, they shouldn’t stop you from Making BIG Happen.
If you don’t have a coach and want one to help you prepare your business during this quickly evolving landscape, fill out the form below to take us up on a complimentary 1:1 coaching call.
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