While the medical and scientific communities are dealing with the medical pandemic, leaders of businesses need to help their customers with the impact on the business environment throughout whole supply chains. For over 20 years, Telos Partners have worked with senior decision makers in businesses to deliver long-term and sustainable success.
Businesses focused on sustainable success will have track records of dealing with crises. Many of them have been around long enough to have overcome world wars, countless recessions — including a depression and a financial crash — so we know that it is possible to survive these ‘black swan’ events.
From his experience of supporting businesses through exceptional events and discussions with CEOs over the past few weeks as the crisis has grown, Founder and Chairman of Telos, Peter Ward, sets out:
The stages that are likely to be evident as businesses come to terms with the pandemic and
The actions that can be taken to assure the recovery of businesses post pandemic.
1. Initial stage: confusion and immediate reaction
There may be an initial denial, but there are no medals for indecision.
Pressure to make decisions and the need to protect the current financial position will lead to immediate reduction in cash commitments: Enforced unpaid leave and redundancies; Elimination of discretionary spend; Elimination of investment spend whether revenue or capital
Focus on protecting cash, less regard for profitability
2. Second stage: informed choices
Coming to terms with the situation and thinking about lasting impact
Modifying initial actions to take account of new facts
With more of a sense of how long the threat will last, planning for the interim
Still focusing on cash, but starting to reflect on profitability
3. Third stage: reflection
The usual shortage of leadership time to reflect has been overcome!
Senior executives now have time to think more deeply about the future and whether or not the organisation is worth saving and what might need to change for it to do so.
Coupled with a hint of boredom with ‘just’ cutting and managing costs, attention turns to the future and acceptance of the challenge of getting back up and running.
Focus on the future and how to get back to a new ‘normal’ and more quickly than the competition and accelerate the growth rate
Draw on the knowledge of others in the organisation to harness their collective wisdom
4. Fourth stage: planning and early implementation
Re-engagement of key people
Focus on the ‘new’ business essentials
Activate agile teams to test and learn ‘new’ ways of working
Monitoring the market and piloting the ‘new’ way of operating
It may not be obvious that the stages are separate and there will be many who will see all four as part of one process, but the way people react will differ at each stage:
First stage: meeting cancellations, deferral of activity, reluctance to engage
Second stage: reaching out, not for support, but affirmation of actions being taken
Third stage: enquiry, openness to ‘sounding board’ input
Fourth stage: need for resource to assist re-engagement of key audiences and support for changes envisaged.
So what do businesses need to do to get through the stages and focus on recovery quicker and with a steeper trajectory than others?
Actions to assure recovery
These can be divided into two categories
1. Avoiding (often counter-intuitive) actions that can damage recovery
Resisting hasty initial actions without considering medium term impact
Honouring the core ideology of the organisation. Understanding the principles that guide decisions in good times and bad [see functions of leadership below]
Investing in communicating intent
Ensuring that the pain is evenly distributed
Dealing with the issue as a unit, rather than a collection of individuals
2. Advancing the development of the ‘new’ way of operating
Ensuring that the ambition is clear and owned by a leader; someone who will be identified as owning the future and prepared to hold the ideal
Making sure that there is a team that will be prepared to support and develop the ambition into a lasting enterprise
Focusing on the core ideology and using it to engage a wider audience to invest time and energy in re-energising the organisation
Being clear about the near-term vision and strategy for its achievement. Longer term will be needed, but later; now it is about restoring confidence in the business model
Extending the engagement activities to a wider internal audience (all employees), customers and other stakeholders.
And when you are through the crisis, remember to write down the lessons learnt. This is unlikely to be last virus we have to deal with. There may also be some adjustments made to the ‘old’ business model to reflect these learnings.
How you act in a crisis defines who you are and what you stand for. Customers and your people will value this and the rewards and loyalty will follow.
Functions of leadership in a crisis
There is always the possibility that the uncertainty will continue beyond current expectations and it may still threaten ongoing sustainability of an organisation.
But it’s worth remembering that in the Chinese language, the word crisis is composed of two characters: danger and opportunity. A clear view on the immediate danger the virus poses, as well as the opportunity that will arise afterwards, will see your business survive and thrive.
DEALING WITH THE BUSINESS PANDEMIC
HOW TO STOP WORRYING AND COME OUT OF THE CRISIS QUICKER AND STRONGER
Written by Nigel Borowski, Senior Consultant at Telos Partners 21 Mars 2020