Over the last few weeks, I’ve left the cocoon of my home and have ventured out into the world. I’ve flown commercially, stayed in hotels and eaten in restaurants. My most significant ‘ah ha’ moment through those experiences is the realization that a Covid-driven ‘new normal’ won’t become real for consumers until they directly engage with businesses and the community.
To this point, considerations of what the new normal should look like as we work to reopen our economies has been largely theoretical, driven by teams of decision makers gathered together via Zoom or Hangouts. But scenario analysis and what-if planning can only take your business so far. It’s only when consumers begin interacting live and in-person with your business that the true variability and diversity of opinion and behavior becomes evident.
You’ll notice I’m not using the phrase ‘post-Covid world,’ as a vaccine is not yet available and general societal acceptance of increased health risks is still largely in question. We will be living in an uncomfortable, transitional state for some time – likely well into 2021.
As we all grapple with how best to lead our teams through this transitional phase, I want to share some thought-starters for leaders to consider as your business ramps back up during the Covid transition:
• Philosophy: What do you want your business to stand for during the Covid transition? In my travels, I’ve seen a wide variety of approaches, from highly conservative to wildly liberal. From this consumer’s perspective, there is a balance to be struck between the two in which you show your business cares about the health and safety of its customers and desires to get itself and the economy moving again. If your philosophy is too conservative, your business will appear unapproachable and difficult to do business with. Too liberal and you’ll send a strong message that your business doesn’t care about the subset of your customer base who’s opinion bends toward safety and security. Those customers are likely to leave you for other alternatives.
• Communication: Your clients, employees and partners want to know your philosophical stance. They want clarity regarding how they should engage with your business as you begin to reopen. This is all against the backdrop of a very fluid environment of rapidly changing regulations, healthcare advice, and public opinion. I’ve seen businesses communicate with their customer base once or twice since early March and assume that’s enough. My recommendation is to invest in more communication across multiple channels to keep your message fresh and relevant so your customers know what to expect when they interact with you. Remember that your customers need to interpret many different messages from myriad business and government leaders. Yours needs to stand out.
• Agility: In March or April, you probably measured the sentiment of your employees and customers about return-to-work and doing business with you during the Covid transition. While that data may still have some relevance, I’m confident there are many consumers like me who won’t truly know how they will behave until they move from the cloister of their homes and back out into the wild. While it’s a well-known fact that consumers dislike being over-surveyed, this is not the time to pull back on your efforts to seek to understand rapidly-shifting consumer behavior in new and creative ways.
• Employee Engagement: Your employees are humans with the same shifting opinions and emotions regarding what a Covid transition means to them as your consumers. Some of them are scared, some want to move forward like nothing’s happened. While there are a wide range of opinions that exist amongst your staff, they are all emotionally drained and some will exhibit signs of emotional exhaustion. This means the amount of discretionary energy your people have to give your business is low relative to what it would be under normal operating conditions. Your people likely want to work hard and do a good job to keep their jobs, but the distraction of a 24 hour news cycle and the constant threat of a silent killer is weighing heavily on them.
• Policies: Since your employees will not be performing at peak levels during the Covid transition, ensure you’re setting them up for success by creating clear goals and policies. My recent interactions with a national hotel chain and a rental car company put this issue into full view. In both cases, it was clear that management had not carefully thought through the new procedures that were necessary for efficient processing of guest interactions and had left too much decision-making in the hands of very junior staff members with little to no training. This lack of clarity created both customer and employee dissatisfaction that was displayed publicly. The brand damage that results from looking disorganized and sloppy is difficult, if not impossible to repair.
• Technology: I recommend making investments in lightweight, touchless technologies to eliminate direct customer contact whenever possible. For the last few years, I thought that the QR code was dead, but it’s made a surprising resurgence. Another silver lining of the Covid crisis is that the U.S. may finally catch up to the rest of the world in the adoption of tap-and-go payment systems. In traveling across the globe, I find it embarrassing how far behind we are in the use of these technologies.
The next eighteen months will be an incredibly difficult time for all of us. In addition to Covid, we’ll be navigating through a presidential election cycle, economic challenges and continued social unrest brought about by systemic racism and police brutality. To ensure your business is set up for long-term success, focus on the above points will help guide you through the Covid transition.
In the many conversations I’ve had with CEOs over the last month-plus, most have expressed a concern about their teams. Chief executives I know in healthcare are simply doing everything they can to provide resources, guidance and emotional support to their staffs. In other industries, as organizations have pivoted to remote operations, the lack of a physical boundary between home and work is creating an environment where the workday feels like it never really ends. Telling employees to pursue work-life balance during the current pandemic can be a stressor in itself—they may try to disengage from work while still feeling obligated to, for instance, open their inboxes after hours to check email. Additionally, those that live alone feel even more isolated and those living with their families can feel familial overload stresses.
The long-term effect is employee burnout, an organizational issue that CEOs were already wrestling with before the onset of COVID-19. The Mayo Clinic defines job burnout as “a state of physical, emotional or mental exhaustion combined with doubts about your competence and the value of your work.” Take a temperature check and see if this applies to those on your team. Moreover, does it apply to you?
Gallup estimates that roughly two-thirds of workers experience burnout occasionally or frequently. In a survey of healthcare leaders conducted by WittKieffer before the pandemic, four-fifths (79%) felt that burnout was negatively affecting their organizations. It’s reasonable to assume that the percentages have increased in the face of the global health crisis we’re currently experiencing.
Clearly, burnout is a challenge that leaders must accept and address for themselves, their employees and their organization as a whole, especially during times of severe disruption such as now. The following are ways that CEOs can make it happen, even from afar.
For leaders and their team:
1. Look in the mirror. Many CEOs see it as a badge of honor to work the longest hours and to bear the greatest burden, yet you can’t effectively lead others if your tank is empty. Ask yourself, “What am I doing right now to take care of myself in this time of extreme stress?”
According to Mandy Ginsberg, who recently stepped down from her post as Match Group CEO to prioritize her own health and wellness, the first step to combatting burnout is leading by example and “[changing] this antiquated notion that there is no place for personal priorities in the C-suite.” She adds, “We should view people who make good choices for their health as good employees,” executives included.
If at all possible in these challenging times, keep your priorities focused, preserve energy where possible, and whatever inspires you besides work, make time for it. Your work will benefit as a result.
2. Delegate with trust. One of the most important roles of the CEO is building the right team through diverse and empowered resources and letting it do its job. If the CEO needs to be involved in every decision, especially now, organizations can’t be nimble. While delegating to others often runs counter to our natural inclinations as leaders, doing so is an excellent means of empowering others. Besides, if something isn’t mission-critical, do you need to weigh in personally?
3. Listen to your people. If your workplace is or has become burnout-prone, ask your team what specifically it is that is wearing them down. Survey them. Chat with them on Zoom. Practice the virtual alternative to MBWA (management by wandering around) to get a true sense of employees’ stressors and challenges in their new situations. While you want your team to step up in a time of crisis, they will only do so if you show empathy and listen to their needs and concerns (which are numerous right now).
4. Understand your employees are likely experiencing the crisis different than you. CEOs and senior teams are working on adrenaline to address the organization’s response to the crisis. It is an all-consuming event that tests the leadership team’s skills, stamina and cohesiveness. Many of those outside the C-suite are actually experiencing a slowdown in work and the stresses of not having enough to do professionally. CEOs should look for ways to engage this newfound capacity to reimagine how the organization will emerge from the crisis.
For the organization:
1. Practice company hygiene. Do employees have what they need to do their jobs and do them well? “Burnout happens when presupposed features in our day-to-day work lives are missing or taken away,” writes workplace expert Jennifer Moss. Work to identify what your team is lacking or in need of (e.g., staff, technology, data, time) in their new work situation and check in regularly regarding remote resources.
2. Promote organizational mindfulness. Just as personal mindfulness has grown into a mainstream phenomenon, the idea of an organization encouraging mindfulness and being aware of its own culture, habits and behaviors is catching on and is now particularly relevant. Our brains don’t like feeling out of control, so focusing on maintaining control over how we perceive, process and talk about work – and doing so as a collective – has a positive impact on how we ultimately feel and act.
It is the CEO’s responsibility to prioritize employee health and well-being, especially now – and taking care of oneself is the best place to start.
The COVID-19 pandemic, though devastating, is a surprisingly useful lever for improving a company’s resilience in the face not only of infectious disease, but also of other more common shocks, including cyberattacks, floods, fires, hurricanes, earthquakes, economic downturns and climate change.
For CEOs, the deadly coronavirus has instilled valuable lessons in risk management and continuity planning. Let me share seven that I’ve learned:
1. Focus on supply chains. As we’re witnessing, unexpected events can knock out operations in large geographical swaths, dealing tremendous blows to companies that lack a plan B, whether it’s having backup facilities, alternative suppliers or big inventories. Where you’re doing business matters: Although a pandemic knows no geographic boundaries, certain countries have more resilient business environments than others, foretelling which regions may be best positioned for rebounding faster as the pandemic wanes. FM Global ranks nearly 130 countries by the resilience of their business environments, overall and separately, according to 12 resilience measures like inherent cyber risk, natural hazard risk, economic productivity, supply chain visibility and control of corruption. Consider geographical resilience as a factor in your pandemic recovery strategy as you decide where to site facilities, build supply chain redundancy and cultivate markets.
2. Quantify risk. Business risk assessment is a science and it involves looking at your entire operation, determining which functions and facilities contribute most to profit, analyzing the threats to each, and shoring up the most glaring vulnerabilities first. Much has been written on institutional denial and the deceptive gut-level calculation that a catastrophe “probably won’t happen during my tenure as CEO.” Another misconception is that loss in a catastrophe is more or less inevitable. In fact, the majority of loss is preventable. The bottom line is it’s far better for your company to prevent a loss than to experience one. Suffering an avoidable loss can have permanent impact on your profit, market share, growth, investor confidence and overall value. Invest in prevention when and where you can.
3. Plan for shutdowns. Takeoffs and landings are the riskiest parts of aviation, and so it can be for business shutdowns and restarts. Although you as a chief executive won’t get mired in the details of shutdown planning, understand that one of the biggest and potentially costliest hazards is waiting too long in the throes of a catastrophe to cease operation. This institutional reluctance to halt production (and revenue flow) even as, say, rising floodwaters are buffeting the walls of the building is another form of denial. Many millions have been lost by waiting to abandon production until it’s too late. Make sure you have a decision tree for shutdowns and a loss-prevention culture.
4. Keep watch on vacant or idled properties. When everyone’s working from home, make sure your operations team has essential personnel in all your geographies doing daily rounds for criminal activity, signs of smoke or new property damage. Ensure they keep fire protection equipment activated. It’s also a great time to commission overdue maintenance.
5. Prepare carefully for restarts. There are several big business continuity risks around resuming normal operations. Many a restart has triggered a disruption leading immediately to another shutdown. The classic case is maintenance equipment left in pipes, vessels and machines or improper reassembly after inspection. Be especially careful if your facilities have switched over to pandemic-related production (e.g., distilleries making hand sanitizer). The coronavirus is also throwing the business world a curveball on staffing: Rare is the company restarting with the same personnel levels in the same configuration. Social distancing will likely require significant modifications. Other planning considerations: Do you have sufficient inventory to restart? Will your suppliers be ready when you are?
6. Formalize and execute. All of these considerations should inform a carefully crafted business continuity plan that will spell out ahead of time procedures for emergency response, evacuation, business recovery, IT recovery, crisis communications and supply chain continuity. Ensure the plan covers the entire company and all its operations; too often, companies plan in silos and aren’t ready to coordinate during a crisis. Also plan for worst-case scenarios: It’s common to plan for 30- to 60-day disruptions, but the worst case—say, a building that burns to the ground—can disrupt an organization for a much longer period. Make sure your enterprise risk team has done all it can to ensure the resilience and readiness of key suppliers.
7. Appoint a business continuity team. Ensure that members of the team embrace the continuity plan and train on a variety of scenarios – including cyber attack, fire, natural disaster and infectious disease. When operations are back to normal, have them perform that testing on the tabletop and in the occasional drill. Refine the plan as test outcomes indicate. And don’t forget to study your role in the plan.
While the current pandemic has delivered an exogenous shock to many businesses, it is teaching valuable lessons to help you prepare your organization for the next disruption. And that’s worth considering given that a hurricane season predicted to bring above-normal activity is in the offing and other natural hazards are ever present. One thing is for certain: Your company’s stakeholders will be watching. Observe the lessons, learn from them and be the most resilient business you can be.
It will pay off.
The worldwide containment effort to halt the spread of COVID-19 has had far-reaching impacts on both the world economy and local communities.
Our lives have been significantly altered and the economy has been severely impacted, as reflected in the Dow Jones Industrial Average, which was down nearly 30 percent before partially recovering recently. In addition to our 401ks quickly shrinking, job losses have accelerated over the last two months with real unemployment now over 20%, levels not seen since the Great Depression.
There is no doubt that the coronavirus pandemic qualifies as a crisis, and that it has and will cause many hardships for people. But a crisis also creates opportunities for leaders. President John F. Kennedy said in a speech in 1959, “The Chinese use two brush strokes to write the word ‘crisis.’ One brush stroke stands for danger; the other for opportunity. In a crisis, be aware of the danger—but recognize the opportunity.” While Chinese language scholars have since explained that this interpretation might not be completely accurate, his point has never been more relevant: a crisis is an opportunity to lead.
Leaders vs. managers
Functionally, managers and leaders apply different approaches in pursuit of different outcomes. Managers get people to follow rules and procedures in an effort to reduce risk and deliver predictable outcomes. Managers view variability as a threat to be reduced as much as possible. A crisis creates change that often overwhelms most management systems.
Leaders, on the other hand, rouse others to take risks and challenge the status quo in an effort to achieve something new and better. Leaders view variability as an opportunity to achieve results that others think are impossible. A crisis is an incredible leadership opportunity.
Companies are filled with managers who have good intentions but are often unable to convince themselves to take a risk. They’re part of a culture that rewards hitting your goal, not taking on challenges that might be hard to solve. They accept boundary conditions for what they are—limits on what’s possible. While this structure works well when the objective is to maintain some semblance of the status quo, it often fails in times of crisis. Since crises don’t resolve themselves, somebody has to step up and find a solution to the new set of circumstances.
During times of uncertainty, a simple truth reveals itself: You can’t manage your way out of a crisis; you have to lead.
Crisis creates leaders
In the early 2000s, William Clay Ford Jr. was the CEO of Ford Motor Company and great-grandson of company founder Henry Ford. During his tenure as CEO, he tried to focus the company on making great cars instead of remaining mired in internal politics and infighting, but without much success. Then the Great Recession hit in 2007. Ford had to convince his family members, who controlled almost 40 percent of the company voting shares, to allow him to pledge the trademarked blue Ford oval as collateral for a financing package to help the company survive the downturn.
Saving the family legacy became more important than the internal politicking that had plagued the company in the past. This gambit created a renewed sense of focus and willingness to take risks that allowed the company to break through the decades-old management barriers and enabled the incoming CEO Alan Mullaly to make real changes.
Ford is an excellent example of how a crisis creates incredible opportunities for business leaders. It creates an environment that, under normal circumstances, is nearly impossible to replicate. A crisis shifts the organizational mindset in three important ways.
1. An increased appetite for risk. During normal times, business decisions are based on some type of risk/reward analysis. Is the potential gain enough to outweigh the risk of failure? In practice, the fear of failure almost always overrules the argument for change. As a result, most organizations are inherently risk averse.
But in a crisis, the dynamic shifts dramatically. When everything stops working as expected, risk becomes less risky. Change becomes not something to be feared, but rather a strategy to possibly make things better. These new ideas may not work, but they become much better options when the status quo is failing. When an organization realizes that there’s almost no downside to taking a chance, then everything starts to become possible and the real risk becomes doing nothing.
A crisis creates an opportunity for leaders to convince others that it’s in their best interest to embrace change and take risk.
2. A renewed focus on what really matters. Most organizations evolve over time to become good at managing competing, and sometimes conflicting, priorities. For a variety of reasons, once something makes the list as important to do, it becomes almost impossible to stop doing it. As a result, organizations allocate resources across a range of priorities, even though some are clearly far more important than others. By default, this reduces the focus on the best ideas.
However, a crisis fundamentally shifts this balance. When your back is up against the wall, the only priority becomes survival. You have no choice but to direct all of your attention to the problem that really matters. This focus is an extremely powerful tool that can give ordinary people the ability to do the extraordinary — especially when people’s jobs are at stake.
A crisis enables leaders to focus everyone on what really matters and to eliminate distractions that might otherwise get in the way of the goal.
3. A reevaluation of mindset. According to the consulting firm McKinsey, 84 percent of executives agree that innovation is critical for their business, but only 6 percent are satisfied with their performance. It seems that the more people try to implement processes to be more innovative, the less they actually do it. The problem is not the process, but the people following it — and more specifically, their mindset. But someone’s mindset does not easily change on its own.
When an organization faces a crisis, the people inside it are forced to reevaluate how they think about their work. This opens the door to shifting the entire mindset of the organization. Values may change from collegiality to brutal candor, from compliance to rewarding initiative, from valuing learning more than being right. If you’re satisfied with how things are, you will never motivate others to overcome a crisis — because innovation requires a mindset to pursue the impossible, and that mindset starts with the leader.
A crisis forces leaders to reevaluate their mindset and create an environment where success is the only option.
Perspective is a choice
You have a choice in how you view this crisis. In fact, the opportunity actually lies in your perspective. As John Wooden, the legendary UCLA basketball coach who won 10 national championships in a 12-year period once said, “Things turn out best for the people who make the best of the way things turn out.”
A crisis is the perfect time for people to take more risks, focus on what really matters and embrace the opportunity to lead.
As the Covid-19 pandemic shakes the global economy and disrupts the way we live, work, and conduct business, leaders are scrambling to manage the immediate fallout. But, as history proves, it’s also necessary to prepare for what’s next.
The authors suggest (1) dedicating about 10 to 20 percent of your time on a weekly basis over the next few months to exploring and envisioning where you want your organization to be when the crisis passes; (2) laying out a path from your long-term aspiration to the mid-term (your post-crisis focal point), and from there to today, while reverse-engineering a series of benchmarks and milestones at regular intervals along the way; (3) pivoting and learning along the way; and (4) rallying your team around your vision.
As the Covid-19 pandemic shakes the global economy and disrupts the way we live, work, and conduct business, leaders are scrambling to manage the immediate fallout. But, as history proves, it’s also necessary to prepare for what’s next. Visionary leaders like Abraham Lincoln, FDR, Winston Churchill, and Nelson Mandela didn’t simply react to the most imminent threats confronting them; they also looked beyond the dark horizon. They were guided — and guided their people in turn — by their vision for a better future, after those challenges had been overcome.
Vision is especially urgent during a crisis as global and systematic as this one. Inflections that you might have had five years to anticipate in a normal environment might unfold in a matter of weeks or months. Trend lines, such as those towards telecommuting, telemedicine, online shopping, and digital media consumption, are suddenly much steeper. Global supply chains are broken. Healthcare delivery is likely to change in ways that will make the last decade’s adoption of Obamacare look trivial. Many of your B2B customers may be shut down; millions of consumers are out of work. Some of the fundamental assumptions underlying your current business model may have been (or may soon be) upended.
In short, the business environment that you land in when the pandemic comes to an end — which could be one to two years from now — may be very different from what it was before the crisis began.
You need to begin preparing for it now. And to do that right, you need to have a longer-term vision of what you aspire to become in five or even 10 years — a north star that will focus and help shape your thinking about the short and the mid-term. It may be hard to see now, but the seeds of the next great growth industries are taking root now. Think back to Apple 20 years ago, which famously envisioned and started to plan for the iPod and iPhone as its computer business came under enormous strain during the dotcom crash.
Of course, nobody has a crystal ball (even Steve Jobs didn’t); if such a thing existed, we wouldn’t be in this fix. But while you can’t predict what’s coming with perfect certainty, you can develop much more clarity than you might imagine about what you could and should become, create a plan to live into it, and then set it into motion. Here’s our process, as detailed in our new book Lead from the Future, for doing exactly that.
Spend time envisioning your future. Ideally, you should dedicate about 10 to 20 percent of your time on a weekly basis over the next few months to exploring and envisioning where you want your organization to be when the crisis passes. This aspiration, of course, should be consistent with your longer-term vision.
Given the urgent demands of the present, some leaders may be tempted to delegate the responsibility for this kind of thinking to others, but it is critical that the CEO, CFO, CSO, and other key line leaders — the people who sign off on major resource allocation decisions — do this work themselves.
Interrogate what is likely to change about your customers, markets, and operating environment, and what isn’t. Focus on what your customers will require, how you’ll meet their new and evolving demands, the resonance of your products and services, and your overall capabilities.
Ask how resilient your core businesses will be in the light of these changes. Consider both threats and opportunities, and pinpoint elements of your portfolio that may no longer make sense and that will need to be sold off or shut down, as well as opportunities to accelerate new growth offerings.
Develop a strategy to walk back your envisioned future to today. Working backwards, lay out a path from your long-term aspiration to the mid-term (your post-crisis focal point), and from there to today. Reverse-engineer a series of benchmarks and milestones at regular intervals along the way. The reason to start in the future and “walk” backwards is that (1) it allows you to “clean-sheet” what you could become without being overly constrained by the way things are today; (2) it forces you to think concretely and in terms of dollars and cents, which (3) helps you decide which investments should be given priority.
To give you an example of how this works, suppose you are the president of a university. You know that online learning will be a major part of your future and anchored in new models that seamlessly blend online and in-person offerings. That future – already burgeoning before the crisis, and now being rushed into prime time – has accelerated. Step back from the mad dash to move this year’s courses online (an admirable feat, no doubt) and imagine what you’ll roll out at the start of the new academic year in the fall of 2021.
Then ask yourself what would have to be true, and by when, for it to happen in the best possible way. Systems will have to be in place, curriculum locked down, integration with conventional offerings worked out, people trained and hired. Perhaps you can meet all your benchmarks if you create the program internally, or maybe you need to partner with a developer or buy something off the shelf. The fall 2020 semester, starting a few months from now, will be a prime opportunity to pilot key elements of your envisioned program.
Be prepared to learn and pivot. Given the rapidly changing environment that you are working in, make sure to measure, monitor, and formally review your progress. Initially, you will be working off assumptions. As you test them in the real world, you will have more data and experience to prove or disprove them. Based on what you learn, adjust both your vision and your strategy.
As you work toward your mid-term and long-term goals, you must be attentive to both the strong and faint signals you receive. That requires a certain degree of humility, as you will likely have to surrender some of your certainties after they are tested against reality and fail. Speed and agility are key; you must learn quickly, constantly pivoting and adjusting. In doing so, you’ll also revisit your vision and continue to shape it.
Rally your team around your vision. Your people and stakeholders will have to make sacrifices, so you want them to believe in your view of the better future that they can achieve. Ideally, you already have a long-term vision of what you want to be which is inspiring, imbued with purpose, and relatively stable, compared to the roller coaster you are on today. While a business can succeed without having an explicit mission, there is a close association between missions and margins.
In 2019, our firm Innosight identified the 20 global companies that had achieved the highest-impact transformations of the decade. A newly strengthened sense of purpose, we found, was their common denominator. Siemens, for example, had recently embraced an explicit mission to serve society. China’s Tencent had announced a quest to create “tech for social good”; while Denmark’s Ørsted transformed itself from a struggling natural gas business to a cutting-edge wind energy company, increasing its net profits by some $3 billion per year. Ørsted’s long-term vision of itself as a green company not only inspires its people to perform, it helps its leaders keep its strategy on target.
It is impossible to overestimate gravity of the present crisis. Many of you are wrestling with existential challenges; virtually all of you will have to adopt what amounts to a wartime footing. You may feel that you simply can’t afford to carve out the time that it takes to set a vision and build a strategic path to it. But the leaders who manage the day-to-day and lead with vision will emerge from the crisis with companies that are stronger and more resilient than they were before.
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