"A good crisis is a terrible thing to waste”. The saying is attributed to Paul Romer, winner of the 2018 Nobel Prize for Economics. I could not agree more. But I see very little practical advice out there for middle-to-senior managers, on how to make the most of the current bad situation. I’ll try to fill in the gap. What follows are a few of my suggestions for those managers, in the middle of this Covid-19 crisis.
1. Safety first. This goes without saying. But the question is: Safety for whom? We need to step beyond focusing on our staff only. The captain is always last to leave the sinking ship. But not because s/he wants to be a hero. It’s because he is in the best position to direct the safe evacuation of the ship.
So you must first of all take care of yourself. Then your people. Then your business partners. It’s not good if you survived the crises but all your suppliers went bankrupt – right? And you have your customers. And the communities in which you are based. And, finally, the stakeholders. I’m putting them last because if you take care of the first five, they, at #6 position, will be taken care of automatically.
My advice is to have a checklist:
2) Our Employees
3) Our Business Partners
4) Our Clients
5) Our Communities
6) Our Stakeholders
Make sure you can put at least a couple of specific “best effort” steps beside each, on how you help them survive and thrive.
2. Test your processes. Can your work processes handle the new requirements? What needs to be changed? Take remote working as one example. It’s one thing to have the IT platform to allow your people to work from home. It’s another to have the right everyday routines to make remote work efficient. When you all work in the same space you, as the manager, get a lot of information by casual observation. Everybody feels part of the team. Information flows freely.
In a remote set up you must create the right tracking and reporting because you are not there. Which are the key steps, tasks, results you should still see? So rework your reporting requirements. Longer term you should look at your balanced scorecard and adjust as needed.
You also need to make sure the “team spirit” survives and people feel they are still a team. So have a daily 5-minute conference call, every day, in the morning. Have a daily 30-minute call at the end of the day. Talk about to do’s, issues, help needed. Turn the Monday morning call into 30 minutes to review the week ahead. Have a shared excel sheet with a few items everybody inputs every week. For example: a) my weekly to do’s; b) what I’ve accomplished; c) my biggest challenges; d) where I need help; e) what advice I can share with others.
3. Test your strategy. Can it help you through the crisis and ensure you come out ahead? (Because one of your objectives should always be to use the crisis to leapfrog your competition.) If you have the right strategy, then practice ‘strategic resiliency’. Studies show that people under extreme pressure revert to their true self. They cannot pretend anymore. The same is true for companies. If you have a winning strategy, like “superior customer service”, do not abandon it just to save money. Many of your competitors will do and will pay dearly for it when the crisis is over. Do not be like them. Yes, save money. Yes, do things differently. But do not go back on your brand promise. If you need a reminder on how to think about your winning strategy, here is the “Strategy Hexagon” from my previous blog:
4. Understand your competitors’ true strategy. Under extreme pressure most companies will show their true colours, even if they successfully used a “pretend strategy” until now. So watch them. Understand their true motivation. This is a rare opportunity to gain a true picture of what is important to them, how their decision-making works, what their true strategy is. Use the opportunity. Hopefully, you won’t get many chances like this…
5. Test your organizational resilience. If you are a senior executive, this is a rare opportunity to see how different departments can function out of their comfort zone. Is Marketing able to turn on a dime and deliver? Can Operations cope with the remote working issues? Is Legal able to redefine their tasks for the new realities? Or do you need to re-cut responsibilities, re-allocate tasks, change reporting lines?
6. Identify your future leaders. Who are the people who grow up to the challenges? Who are your most motivated, most innovative managers? Who are best with people, able to motivate them during the worst of times? They are your future stars. You rarely get an opportunity to observe their true self, shown under extreme pressure. Do not miss the opportunity.
7. Backfill your talent pipeline. If you are lucky enough to work for a large, resilient organization, this is the time to look for much needed talent in the market. Your company has just become much more attractive to many of the people it could not get before. If you are one of those companies that struggled with lack of available qualified workers – this is your time to act.
8. Learn, learn, learn - and prepare for the end of the crisis. The ideas above are just a few on how to take advantage of this unfortunate but unique “test situation”. Take every opportunity to learn about your people, your processes, your competitors, your markets, everything! Take notes. Think ahead, how you can use all this knowledge when the crisis is over. Prepare for it.
9. Don’t think it will be “back to normal”. It will not be. And the least of your problems will be what today’s ‘gurus’ talk about – re-thinking global supply chains and the like. Here is ‘The Big Issue’: People’s thinking about a lot of things will permanently change. And this is not something Big Data, AI/ML, Predictive Modelling or similar “miracle techniques” can help you with.
Those tools all predict the future based on the past. But logical predictions may no longer work. You will need to reflect on your own emotions, experiences and learnings. Then brush up on your behavioural economics. Your understanding of cognitive biases. Physiological, emotional and cultural coding. Different people will filter their own experiences differently and behave in ways you cannot easily ‘calculate’.
I’m not the expert in these areas. So here are some books from the experts I personally found useful in similar situations:
- Richard Thaler: Misbehaving – The Making of Behavioural Economics
- Clotaire Rapaille: The Culture Code
- Martin Lindstrom: Small Data – The Tiny Clues That Uncover Huge Trends
- Rolf Dobelli: The Art of Thinking Clearly (a summary of cognitive biases and their uses)
Imagining a bright future in the middle of the most serious crisis of the past 50 years is hard. Trying to guess how things might be different afterwards is even harder. But, just like I encouraged you to watch your people perform to identify your best future leaders, I am encouraging you to do this. I did not write this paper for the for the timid. I wrote it for those who want to not only survive the Covid-19 crisis, but are determined to take advantage of it. “A good crisis is a terrible thing to waste.”
Good luck and stay safe!