Lead Effectively: Decision making during the Covid-19 crisis

by Vassiliki Vitaki, Member of the Financia Affairs Research Team

Introduction

“The ultimate measure of a man is not where he stands in moments of comfort,

but where he stands at times of challenge and controversy.”

 – Martin Luther King Jr

The coronavirus pandemic has placed extraordinary demands and enormous challenges on business leaders and beyond. Considering that the factor of uncertainty is included in this situation makes the “leadership challenge” even more complicated. Today, leaders face innumerable leadership dilemmas and conflicting requirements and most of them do not have a unique and simple binary answer. 

In particular, the existence of pandemic tests business and organization leaders in every field around the world. The consequences may persist for a longer period of time and present greater difficulties than one would expect. However, the existence of this prolonged uncertainty is another reason for leaders to implement the practices described in this article. 

As discussed in detail below, the implementation of the 5 simple steps will play a crucial role in creating or reinforcing attitudes and values that can support organizations and their communities during this crisis -as long it continues- and prepare them with the best possible way.

Leaders must combine traditional and new skills to efficiently manage their organizations into the future.

When describing the new digital reality for companies, it seems obvious that the latter should simply dial-up more acceleration and agility to seize an opportunity. However, this is not clear for all organizations. While it is maybe alluring to want to sustain their business at this point, that is on the well-known paths, this continuous state of crisis presents a great occasion to take a fresh look at their corporation and take the necessary measures to make it more resilient. 

Once they specify this turning point, managers need to take a new look at the landscape and take into consideration the lessons they learned from this crisis to carry out the commitments made to the employees. This is the ideal moment to regenerate their organization, so it is upon leaders to compose a well-informed decision regarding when to shift from crisis management to contemplation and preparation (Source: MIT).

Speed is not only a characteristic of a business organizational activity tied to a timekeeper. On the contrary, speed is a complex, performance-enhancing organizational capability that entails a holistic strategy for its growth and execution. Organizational speed relies on the following capacities: recognition speed (how quickly external factors are identified as an opportunity or a threat), decision speed (how quickly business decisions are made), and execution speed (how quickly resources, workforce, and business processes are prepared to maintain the organizational action). Speed simply enables corporate organizations to operate promptly only in an already established product market (Research Highlight, MckinseySpeed). Nevertheless, during a crisis, businesses must also demonstrate agility, an aptitude that empowers the organization to pivot to substitutes or completely brand-new product domains.So, how can these leaders provide what employees need at present? Five fundamental qualities of leadership distinguish, that they can obtuse the Covid-19 crisis’s impact—and enable your organization to make smart choices immediately and emerge stronger (Source: MITDigital, HBR).

A. The value of Transformative vision and Forward-looking viewpoint.

Providing clear vision and direction have been long-standing vital elements of leadership. In particular, after a research project was conducted by MIT Sloan Review and Deloitte (Research Highlight), it was revealed that the first most important leadership skill to dominate in a digital organization is a transformative vision, which encompasses the ability to contemplate markets and trends, make sharp business decisions, and solve severe problems in tempestuous times like the one we are experiencing. The second most remarkable skill, that is closely related, is being forward-looking, which incorporates having a precise vision, clear strategy, and foresight. Leaders with a transformative vision are equipped to provide a clearly defined purpose, combined with the necessary guidance. How is that even possible when you are facing an unpredictable future?

The answer is to provide the main business purpose, clear guiding values, and instructions to the employees rather than control. More specifically, it is an urgent need for the corporate staff to know what is expected of them and what they can require from others. At this point, leaders need to accept the fact that they cannot manage everything and discern which decisions are feasible while foregoing the temptation to do everything themselves (Source: HBS).

B. Appraise, predict, then act

Expecting a full set of data to begin before deciding what your next move is remains another typical misconception that leaders execute during crises. Because a crisis involves many undisclosed data and surprises, these facts may not become apparent within the necessary decision-making time frame. Yet, leaders should not resort to utilizing their intuition solely. Leaders can adequately cope with contingency by regularly accumulating data as the crisis deploys and observing how well their actions operate (Source: HBR,HBS).

Also, it is important to identify the following traps that most leaders fall into 1) taking a narrow view; 2) pursuing a micro-management strategy; 3)  forgetting the human factor.

C. The Network of teams

A small group of executives at the highest level of a corporate organization cannot collect a massive amount of information or make decisions quickly enough to react thoroughly effectively. Leaders can mobilize their businesses more efficiently by setting clear priorities and goals, while at the same time by outsourcing responsibilities they can discover and implement solutions that serve these priorities. When faced with chaotic conditions, leaders can build a network of teams to solve problems and execute them under high pressure. Although the team network is a well-known and widespread construction, it is worth noting that few companies have experience in their implementation (Source: Mckinsey, MIT). 

More specifically, a network of teams consists of leaders who seek to communicate business strategic objectives, so the top and middle managers can make decisions promptly while being allowed to experiment with new strategies of leading in a digital environment. Additionally, one of the most critical skills that managers must develop is the capacity to lead networks of people and groups rather than to lead through a hierarchy. So in the final analysis, leaders need to structure a strong network of teams that are empowered to operate outside the current traditional hierarchy and bureaucratic structures of the organization (Source: Mckinsey, Deloitte).

D. The culture of Experimentation – Adjustability

Adjustability.  It is one of the most unique and valuable possibilities that a leader must-have. Additionally, a leader needs to be change-oriented – that is, to have various characteristics like open-mindedness, flexibility, and innovation. It helps leaders react to mutable circumstances and change course if the technology and market conditions emerge in unanticipated ways. This mindset also enables digital leaders to constantly modernize their knowledge stores, considering the changes in technology, and avoid obsolescence (Source: MSR,HBR). 

Experimentation. Finally, leaders should have the core skills developed from the insights of the past, but in combination with an agile mindset and digital literacy to allow them to pivot when necessary. So, the aim is for leaders to be able to think like innovators and provide the space for employees to experiment with new things, learn from them, adapt, and scale.  In short, we need leaders who can be the change we seek (Source: MSR).

E. The Human Factors

While it may seem apparent, crises are defined as such, because they have an impact on people. However, leaders can instead become trapped by focusing to an excessive degree on the daily recordings of share price, profits, and expenses. These are essential, but they are the consequence of the coordinated endeavors of the employees. Consequently, organizations exist to achieve together business goals that individuals cannot do alone (Mckinsey).

Go big or go home

The coronavirus crisis, like any crisis, comes with a beginning, a middle, and an end. Unprecedented crises require unprecedented and drastic moves. Given the lessons learned from previous crises, it appears that leaders are more likely to react. Therefore, what is necessary is to move at fast and bold actions that would seem very dangerous under normal circumstances.

As governments respond to the financial consequences, executive leaders in organizations struggle through business continuity and crisis management plans to protect their employees and all parties involved. Crises, typically characterized by both a degree of complexity and radical change, require executives to lead and manage effectively. For this, it is necessary to look beyond the immediate future and anticipate the next three, four, or five obstacles (Source: Mckinsey, Mckinsey2).

Look at the example of the leadership decisions of Jeff Bezos, Amazon’s founder, and CEO. He has responded quickly and thoughtfully to the mounting difficulties and has made severe commitments to its workforce, by temporarily raised their minimum salary, enhanced overtime payment, provided unlimited paid time off, and offered a couple of weeks of sick pay for those quarantined or diagnosed with COVID-19 (Source: BusinessInsider).

So, in the end how should leaders react? Leading a crisis requires a long-term perspective, as opposed to managing the present. More specifically, this means that they will have to go through the process of forecasting next week, next month, and even next year to prepare the organization for the next business steps. In brief, the most capable leaders in times of crisis ensure that someone else manages the present well, while their main focus is on finding a way out of the crisis towards a more promising future.

References

L. Pérez-Nordtvedt, G. Tyge Payne, J.C. Short, et al., “An Entrainment-Based Model of Temporal Organizational Fit, Mist, and Performance,” Organization Science 19, no. 5 (October 2008): 785-801.

Boris Groysberg, Sarah Abbott, “It’s Time to Reset Decision-Making in Your Organization,”  | HBS Working Knowledge | July 9, 2020.

Amy C. Edmondson, Brooks Holtom & David Niu, “5 Tips for Communicating with Employees During a Crisis,” | Harvard Business Review | July 9, 2020.

Linda A. Hill, Emily Tedards, “Leading Through the Fog of the COVID-19 Pandemic,”  | Harvard Business School | May 27, 2020. 

Shona Simkin Nancy F. Koehn, “Crisis Leadership Lessons from Shackleton, Former Presidents, and Experts from HBS and HKS,” | HBS Faculty News | May 5, 2020.

Bernadine J. Dykes, Margaret Hughes-Morgan, Kalin D. Kolev & Walter J. Ferrier, “Responding to Crises With Speed and Agility,” | MIT Sloan Management Review | October 15, 2020.

Joe Dettmann, Micah Alpern & Jeff Stier, “Five leadership behaviors for all of us during COVID-19,” | Ernst & Young |  August 18, 2020.

Glenn Llopis, “6 Leadership Principles To Guide You During Crisis,” | Forbes |  April 13, 2020.


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