No ordinary crisis: Leading in the toughest time
The global economic and social disruption we are presently experiencing is different to any crisis in a century or more. There is no template for how to lead at a moment like this.
In this blog I share thoughts on the qualities most needed to steer enterprises through the systemic shock caused by the COVID-19 pandemic and consequent global lockdown. I suggest that they are different to the qualities that take businesses through an “ordinary crisis”.
There has never been a tougher time to be a business leader. The lockdown resulted in business being suspended and revenues drying up for most companies. Worse still: the market, jobs, morale and business confidence have been damaged like never before. This alone creates the worst business environment in living memory. The additional overriding complication is that no-one knows what happens next in South Africa or internationally.
We usually emerge from a severe crisis by going through some clearly identifiable steps.
Survival: We do whatever we need to do to cope with the immediate crisis. (For example, a small business loses its main customer and revenues fall rapidly. Survival might entail raising new finance, negotiating with creditors, taking pay cuts, and even retrenching staff).
Consolidation: We put our head over the parapet, adapt to new conditions if need be, and prepare to return to “normal”, even if that normal is a little different to what it was before. (The small business looks for new customers, tries to grow its business with existing customers, and re-organises for greater efficiency with fewer staff).
Renewal and growth: Both are important. (As the business recovers, full salaries are restored, workloads reduced by taking on new staff, debt is reduced, profits restored and “business as usual” resumes).
There are many versions of this story, depending on the nature of the crisis. One could write a similar script for a family coping with death or divorce, and for an individual losing an arm in a car accident.
The survival -> consolidation -> renewal pathway suggests a straightforward (or at least linear) movement towards a known end: a re-invigorated company operating in a familiar ecosystem.
The difficulty this time is that so much is uncertain. How does a business consolidate and prepare for a future that is impossible to foresee in a way that is profoundly different from normal market volatility? The fabric of the business environment is frayed and unravelling in ways that are still unpredictable.
We simply do not know, for example when tourism will resume or the extent to which international trade will return to normal. We have no idea whether future spikes in infection rates will lead to further lockdowns, or whether individual businesses will have to close for a time whenever one staff member is found to be infected. There may be substantial changes in public transport that could complicate staff getting to work and increase the cost to the company and the individual.
Certainty is what business leaders and investors crave above all else. How then do we consolidate our businesses for renewal and growth when almost nothing is certain?
The only answer we have is that it must be done because there is no alternative. The uncertainty, like the virus, is out there. We will find a way to live with it or we will perish.
In this context Thornhill would like to suggest some leadership qualities or practices that will help businesses to survive and thrive in the future.
The first is acceptance: Things will not go back to normal. Resentment, anger and blame are distractions. Your business, your employees, and your customers need you to work with the situation as it is. It confronts almost every business on the planet. Your ability to be calm and move on may be a competitive advantage for the company, compared to those whose leaders long to get back to the way things were before all this happened. They will be climbing a very slippery mountain. There comes a time when one has to acknowledge that a good thing has come to an end, and the only way of stepping forward to the next good thing is to let go of the past good thing.
The second is agility: This is really two qualities – the first is devoting enough energy to understanding what is happening and how things are changing; the second is the flexibility to respond quickly and appropriately to new threats and opportunities. Some fortunate companies have obvious opportunities to repurpose for the production of goods and services directly related to coping with the epidemic. For others, moving services online, or finding new ways to entertain and earn money, or to produce locally what we previously imported are some of the avenues that may open up to those who recognise that we have to go forward, not back to normal.
The third is long term resilience: You may need to take your company backwards and forwards between survival, consolidation and renewal several times as the global and local response to the pandemic changes. Business culture has come to value short-term growth and profitability above all else. A mindset focused on longer-term sustainability is generally going to serve business leaders better. This is probably not the time to put the company at risk by taking on mountains of debt to finance growth, or to pay large dividends to investors.
The fourth is empathy: Your business is hurting, and you will be tempted to squeeze whatever you can out of your colleagues and staff to keep things afloat. You could just break them in the process. Your colleagues are also adrift on this sea of uncertainty, and in fear of losing their jobs, losing friends and loved ones, and perhaps of losing their own lives. As with your business, everyone’s life is suddenly different, the future is unpredictable, and people are scared. They need you to understand this and to support them as best you can, under these difficult circumstances.
The fifth is honesty: Board members, shareholders and above all your employees need to know how things are going. Information is the best antidote to uncertainty, even if the information is troubling (for example, that there will be salary cuts and no performance bonuses). For most companies, things are going to be difficult. If you can share this honestly with your stakeholders it will prevent them from fearing that things are even worse and will bolster their trust in you.
These qualities are part of the mix we find in most leaders, and do not replace other important leadership qualities such as being decisive, building an effective team, defining a vision and goals, and giving your staff the freedom and the support to achieve great things and then holding them accountable.
However, they could be particularly helpful in navigating this once in a lifetime rupture in our lives.
Thornhill is available to help business leaders think through what behaviours will be most helpful in their specific context, and to adapt our existing evaluation tools to help you get feedback on what really counts right now in your organisation.
For more information on Thornhill’s various products and services for all levels within your organisation, please contact us on firstname.lastname@example.org