As we inch back towards normality, the real test of the COVID-19 pandemic is beginning for many business leaders. Some key attributes will be needed.
For many companies around the world the COVID-19 pandemic has become an existential threat and successfully navigating our way out of it may prove to be the most significant leadership challenge for a generation or more. This applies to corporate executives as well as public sector leaders. Here we suggest ten priorities for senior executives – the Ten Cs if you will – for managing through a crisis and for leading the way out of COVID-19.
During a crisis, rank-and-file employees look to senior executives for guidance and reassurance. It is incumbent upon the leadership team – especially its senior members – to maintain calmness and to project a sense of confidence. Senior leaders need to signal that they have control. This sense of confidence is not to be confused with inappropriately calibrated overconfidence, let alone arrogance or ignorance. Maintaining calmness and projecting confidence is, of course, a tall order while running on empty batteries. Senior leaders, thus, need to manage their own energy levels accordingly.
Major crises can quickly turn into existential threats for employees and their families when risks to health and loss of employment become possibilities, let alone a reality. Senior leaders need to acknowledge these fears. They also need to show genuine empathy and do everything in their power to protect employees and their families from harm. This duty of care also applies more broadly to customers and other business partners. Formal employment and thereby health insurance coverage should be maintained for as many employees as possible and for as long as possible.
During a crisis, particularly a fast-moving one, transparency is of the utmost importance. Company responses to new developments should be disseminated in a clear, consistent and timely manner. Unclear, inconsistent and untimely communication gives rise to uncertainty and speculation. Responding to fast-moving developments requires employee initiative. This is generally best enabled by explaining the underlying rationale for company decisions and not just advising of the decision itself. Different communication channels and formats, especially digital ones, should be used while remaining sensitive to cultural preferences. Similarly, other key stakeholders such as owners, customers, suppliers, and local communities need to be engaged appropriately.
In the best of times, one of the most important assets a leader possesses is credibility. This is even more so during a major crisis. Senior leaders need to protect this critical asset by maintaining a commitment to staying honest and fact-based. In most organisations, omniscience is not a prerequisite for achieving and maintaining credibility with the workforce and other stakeholders. However, making appropriate use of experts and expertise whilst acknowledging the limits of one’s knowledge usually is. In a crisis situation, giving false hope in a cavalier manner rapidly undermines credibility, with potentially irreparable consequences.
In a crisis, especially one that is characterised by ups and downs such as the current COVID-19 pandemic, senior leaders need to avoid giving false hope. At the same time, it is important to recognise that maintaining positive energy is much easier when there is the prospect of seeing light at the end of the tunnel. This is particularly important when a crisis is likely to be prolonged. In these circumstances, senior leaders need to signal their conviction of purpose and confidence in the future. When reminding employees that the crisis will be over one day, it is usually worthwhile to highlight that post-crisis recoveries often present new opportunities for companies and employees alike.
In most circumstances, certainty and reassurance are at the heart of personal comfort and organisational cohesion. Certainty and reassurance, in turn, often are functions of regularity and structure. In a fast-moving, unpredictable and confusing crisis, certainty and reassurance becomes even more important. Leaders need to establish new rhythms and routines for their teams that serve as anchor points in turbulent times. Such rhythms and routines could include regular all hands updates at the same time each week or recurring rituals during each meeting even if they are online, as they generally have been during the COVID-19 pandemic. Regularity and structure are key.
There is an adage that companies do not go out of business in the short term because of incurring negative earnings but because they run out of cash. In a prolonged economic crisis, not running out of cash becomes paramount. Senior leaders need to move fast and to take decisive action to protect liquidity. Measures to be taken can include postponing or cancelling major capital expenditure projects, minimising stock buybacks or cutting dividends. Senior leaders should tap any source of cash that will help their company survive including government funds.
During a crisis, a company needs to ensure continuity of leadership and continuity of core operations. It needs to protect the ability of its senior leadership team – including the C-suite and Board of Directors – to make decisions and the ability of its core team to maintain operations. This might entail preparing for the worst case and giving special protection to ‘designated survivors’. In the same spirit, senior leaders need to pay extra attention to protecting their company’s IT infrastructure and to ensuring continuing availability of mission-critical suppliers.
In a major crisis, temptations to prioritise the short-term over the long-term can be strong. However, senior leaders need to remember that a crisis will be over one day. At that time, senior leaders and their organisations will be judged by their conduct during the crisis. Senior leaders would be well advised to be responsible and helpful members of their communities. Most companies command considerable resources – human, technical and otherwise – that can be deployed to support crisis management within the larger community. At the very least, companies should make sure not to exploit and not to be perceived to exploit the crisis by predatory pricing or other exploitative business practices.
Navigating a fast-moving crisis requires decisiveness, often in reaction to imperfect information and frequently under tremendous time pressure. In these circumstances, it is of utmost importance that senior leaders put in place decision-making structures and processes that allow contrarian voices and the best advice – regardless of seniority – to be heard and considered. Even with these efforts, errors in judgment are likely to occur. Senior leaders need to beware of target fixation and need to maintain the willingness to decisively correct decisions whenever necessary.
Effective leadership makes a difference in the best of times. However, it becomes a matter of organisational survival during a major crisis such as the COVID-19 pandemic. After all, existential threats tend to separate the wheat from the chaff when it comes to leadership. Navigating the current COVID-19 crisis and successfully positioning one’s organisation for post-crisis recovery might be the most significant challenge in the lifetime of today’s leaders in the private and public sector. The Ten C’s for leading through the COVID-19 crisis are meant to be a helpful aid for senior leaders tackling this challenge.
Read more about Marc Szepan's work on his Saïd Business School page.