This blog first appeared on the Bradford University School of Management blog.

What are the key challenges for business in this economy? And what does that mean for managers and the skills they need to acquire and focus on?

This was the topic at an event that Bradford University School of Management held recently to launch our re-engineered Bradford executive MBA with guest speaker Keith Williams, chief executive of British Airways.

Here were the themes I looked at – and it would be interesting to know if you think we have these right and anything that is missing here?

1. Managing complexity and uncertainty

Whatever the economic climate, complexity is here and to stay. The new Boeing Dreamliner has more than 250 contractors, each making their own contribution. Boeing is unlikely to be the expert in every aspect of the supply chain – but it knows who is. Today’s managers must recognise that complexity means that there is no weakness in not knowing every answer (or even question). The weakness is not knowing who to ask. Take a look at www.innocentive.com – remote pick and mix solutions.

What is certain about the current economic climate is that we are all uncertain! Most of us grew up in times when you could plan ahead for five years and feel confident, with a bit of tweaking, that you could and would deliver most of your plans.  Now, the managers I meet say that they struggle to produce meaningful plans for six months or a year ahead because markets are changing so quickly.

This is not always a bad thing – managers are more flexible than ever (or need to be) and this means they can spot and maximise opportunities very quickly. But the key is, can they do so more quickly than the competition?

One of the toughest parts is working with staff in times of uncertainty. Redundancies can create guilt, rather than empowerment, among those still employed and mean they just keep their heads down and do not innovate – just keep their job.  Often the energy has gone from those left behind, they don’t believe platitudes from managers.

Managers need to communicate better than ever.  Rebuild confidence and energy in their teams, be very open and genuine about problems and involve employees in problem solving together.

2. Leaving the silos

It is an essential skill to be able to work across a whole business and understand the impact that will happen from a decision made in one part of the business on another very different area. But silos are the norm, not the exception. And many managers run silos within silos!

Here’s a good example. Supermarkets have introduced self-serve stations, which to one part of the business must have seemed entirely logical. They will reduce the need for staff, queues will move quicker, customers will be happy.

The reality has been very different – and you wonder the extent that front-line staff were involved in the decision and implementation of these. What actually happens is that customers can’t get the till to register the bar-code, when finally they do they put it in the bag and then the machine says something like ‘unexpected item in the bagging area’ making the customer feel like a criminal or stupid. How many times have you tried one of these machines and left feeling deflated or a failure? It’s not a great customer experience! It is a silo created one!

3. Risk-taking

Risk-taking is perhaps the most difficult at the moment. When do you need to be rational and when should you trust your instinct? There is interesting research in the School on this subject and it’s created heated discussions among our Bradford executive MBAs!

The big issue is the balance between making a ‘perfect’ decision, say over 12 months – by which time your competitors have leapt in and taken the market – or following your hunch, even if you launch something that will need refining over time, or might even fail.

Managers need to create an environment where there is freedom to follow your hunch – and empty your mind of everything that is stopping you from doing this because the biggest restriction to innovation is when someone says ‘prove it’.

How many times have you wished you’d followed that hunch?

If you can achieve a track record of two out of three hunches being right, that’s a pretty good achievement?

4. International empathy

Someone recently said to me that the UK is flat for the next five years. That being the case, every organisation needs to be comfortable with internationalisation – even if not selling overseas, almost certainly they will be buying and outsourcing abroad. And if they aren’t – they probably need to look seriously at their business activities.

The obvious international opportunities are still in BRIC countries but Africa is rapidly opening up. But Africa, or at least parts, is out of the comfort zone of many UK managers. But it’s not with those from many other “developed” countries. Managers need to ensure they get out of their comfort zone when prospecting for business and bring out the best from multi-cultural workforces.

5. Information age

Our digital age is bringing new ways of doing business and using information. It is also bringing new challenges in terms of protecting that information. The BBC and other media organisations are struggling to protect the information that they put out.

So managers need to work more creatively. Rock musicians accept they make little money from producing DVDs – but touring is bigger business than ever. Nothing can replace the buzz and atmosphere of live music.

6. Influencing and generation Y

Generation Y were born in the 1990s, are connected 24/7, are literate, technical, tend to have a strong moral stance and are pretty sceptical about those who got the world into such a financial mess. They are loyal to themselves rather than their employer and work-life balance may be more important than salary alone.

Managers can no longer shrug it all off. The Y Generation is the future – employees as well as consumers. Managers need to get into their zone. Employ strong motivational skills, involve and interest, give regular praise and understand that a great pension offer (if one exists!) at 22 is unlikely to be seen as any incentive.

Which of these challenges do you think are the hardest to manage – and have we missed any that you think are more critical?