Strategic leadership in the age of COVID-19

COVID-19 RESOURCE HUB  |  Financier Worldwide

STRATEGY & LEADERSHIP

With varying degrees of success, governments, institutions and businesses have scrambled to cope with the uncertain and rapidly evolving landscape caused by the COVID-19 pandemic. The crisis has exerted extraordinary pressure on business leaders across industries and jurisdictions. It has been a generational test of leadership and character.

According to a Boston Consulting Group (BCG) survey of business leaders, almost half said they expect their company’s profits to decline by more than 20 percent as a result of the crisis. Ninety percent of businesses are planning company-wide cost-reduction programmes.

At times of crisis, employees and other stakeholders look to senior management to lead the way and bring the company back from the brink. This, of course, has not been easy.

Effective leaders have tapped into existing crisis management plans, activating cross-functional response teams to react to the outbreak as it developed. But many others were caught short, forced to improvise a response by introducing temporary and more permanent measures ‘on the fly’. Such measures included sudden work from home policies and necessary adjustments to typical business processes, for example.

Emerging from crisis mode

If companies are to prosper in the ‘new normal’ created by the COVID crisis, it is vital they take on board the lessons learned during the first half of the year, and fill any gaps.

Organisations cannot remain in ‘crisis mode’ indefinitely; they must adapt to the new normal. For some, this means accelerating digital transformation, adopting artificial intelligence and machine learning, upgrading their remote working infrastructure, or streamlining other operations.

Seeing these plans through will require effective, strategic leadership from the top. Employees need to buy into the company’s journey, and leadership must set the tone to reinvigorate them.

In addition to the usual challenges leaders face, myriad new threats surround employee health and business operations. As businesses move from the ‘respond’ to ‘recover’ phase of the crisis, strong leadership will be required to drive growth while managing risk.

With a COVID-19 vaccine and a ‘return to normality’ a long way off, corporate leaders must prioritise business continuity. Prospering in the post-COVID-19 world will require senior leaders to make far-reaching decisions to make their companies more resilient in key areas, such as supply chain management, for example. But according to BCG, less than 30 percent of surveyed business leaders said that they plan to reimagine their supply chain structures.

Communication is key

It can be difficult to cut through the noise engulfing the pandemic. So much information and speculation is being disseminated through innumerable channels – from traditional news sources to social media platforms – that leaders may have trouble sifting through the content to provide staff with appropriate guidance.

According to the Center for Creative Leadership, at times of great uncertainty and stress, leaders should focus on communicating to stakeholders essential information only, embracing brevity and honesty.

Of course, given the unprecedented nature of the crisis, no one is expected to have all of the answers. One the best ways to cope and learn valuable lessons for the next crisis is to improve communications networks within organisations. By setting up clear, two-way communication flows, employees can focus on their day-to-day activities and help the company move through the recovery period.

Senior leaders will have many difficult choices to make. This requires calm, decisive and strategic leadership, as well as empathy with employees as they struggle with personal and family issues. For example, many employees have shifted their priorities away from work toward health and safety. It is vital that companies take steps to safeguard workers’ physical health and mental wellbeing. Emotional intelligence should always be demonstrated as the human aspect of the crisis remains significant.

Rocky road

Although we can only guess at the shape of the ‘next normal’, the road to get there will be rocky. Companies must assess the impact of COVID-19 on their short- and long-term objectives.

Those that experience extreme distress may consider appointing a chief restructuring officer (CRO) or other form of interim management. According to Deloitte, a CRO or interim management team can help companies: (i) regain control and stabilise performance; (ii) implement cash management processes to preserve available financial resources and maximise headroom; (iii) provide independent assessment of available options; (iv) rapidly execute solutions including capital raising, disposals and operational change; and (v) gain input from a wide array of relevant experts and hands-on support.

The need for strategic leadership has never been greater. For the safety of employees and the long-term survival of organisations, it is vital that senior management set the tone from the top, execute crisis management plans and communicate clearly and effectively with their stakeholders.

© Financier Worldwide

BY

Richard Summerfield