Highlights

Covid-19: Leadership in a Crisis

— By Debra Jenkins
There is general agreement the COVID-19 crisis has forever changed the country and businesses. Leaders must be the source of stability amid transition as they identify opportunities to grow the business and strengthen business continuity post-crisis.

In the world of psychology, there is a theory called post-traumatic growth (PTG) which says that people enduring psychological adversity can experience positive growth afterwards. Applying the theory to business, a crisis is turned into opportunities to make changes that strengthen resiliency and flexibility. It is a chance to strengthen employee engagement, increase focus on priorities, identify informal leaders who stepped up when needed, and lead to innovation, even if initially forced. A crisis is a change opportunity. The coronavirus is not the first one nor will it be the last, but that only means that now is the time to re-evaluate structure, processes, human capital policies, leadership skills, and technologies. Disasters or crisis impact every one of these elements of a successful business.

Never Business as Usual Again
COVID-19 impacted the entire economy - almost overnight. Employees were required to work remotely, businesses had to change their delivery systems to avoid contaminating employees and customers, many retail businesses had to close and rely only on online business, and economic uncertainty now defines the future. Most experts believe it will never be "business as usual," even after the country gets back to doing business. The message today is that change requires a positive perspective and a willingness to innovate so that the next crisis is not as traumatic and businesses are more prepared.

There are many ways to respond to the COVID-19 crisis, and one of the most positive strategies is learning from the events during the crisis and determining how to improve preparedness for the next disruption. The psychological perspective determines whether business leaders act in a way that leads to the possibility of business continuity through any crisis or disaster. The current crisis unfolded with amazing speed, forcing business leaders to quickly change their workflow systems,, like turning the workforce into a remote one. One of the first lessons learned is that it takes a team of leaders working together across functions to keep the business running smoothly. Creating a team of people who can quickly make critical decisions about the workforce, sales channels, communications, and other internal processes can match the speed of decision-making to the speed of events.

Ready or Not…Here Comes the Crisis
Some companies discovered they were not ready for a remote workforce. They did not have the right technologies or a leadership communication policy. Though texting and mobile phones are useful, proprietary information and matters related to Human Resources cannot be shared in the public arena. Evaluate where communications have broken down during the COVID-19 crisis and close the gaps. Employees need a path and understanding of how to access reliable, balanced and accurate information about things like policy changes, adapting to changes in initiatives, and results of meetings. This will help the workforce avoid the situation in which they get a flurry of information from multiple sources with no way to know what is right or wrong.

As of now, there are a number of SMEs frantically working to get their websites updated with products and services. Millions of local small businesses do not have a website, though there is tendency to think every business is online. In fact, Statista research found that only 14.1 percent of retail sales around the world were e-commerce sales in 2019. To adapt during the current crisis and continue growing after the traumatic event, develop and maintain more than one sales channel. Post-crisis, building, maintaining and marketing an online presence or other sales channels can help companies thrive in the future and provide a safety net should one channel get shut down.

Get Ready: Creating a Safety Net
Safety nets are also needed in the supply chain. Companies are likely dealing with suppliers that had to temporarily close for business. The COVID-19 crisis has emphasized the need for diversity in sourcing and logistics, so here is an opportunity to strengthen the supply chain. Companies unable to produce or deliver products because the supply chain is too integrated and inflexible are at risk of financial failure. Business leaders need to develop a plan to add flexibility and resiliency. One way to accomplish this is to work with key suppliers to develop a plan for rapid response to supply chain disruptions. For example, can production move to a different supplier or can production be reorganized among suppliers?

Also take this time to evaluate all the weaknesses that have appeared during the crisis. Each organization should assess whether organizational leaders have the appropriate skills to respond and successfully manage rapid change and in post-crisis events, like an anticipated recession. What businesses do now could very well determine their long-term sustainability, and change management skills are critical.

Start with conducting a readiness assessment for business continuity. Identify the major risks to ongoing core operations and develop a risk management plan. Include all elements – operations, supply chains, global risks, economic risks, leadership, and workforce productivity. Consider various scenarios and analyze the impacts on business continuity. Also, establish a system for identifying the emergence of risks so that responses are appropriate, rapid, and effective at heading off a challenge to continuity.

Learning for a Crisis
There are companies that have proven their resilience because they did business continuity planning before there was such a thing as coronavirus. AvidXchange is a SAAS provider of accounts payable software, and the CIO Angelic Gibson was ready for the pandemic. As the virus spread, she tested to make sure remote employees have the right tools to ensure virtual meetings using Microsoft Teams and Cisco WebEx. She tested network traffic volume to ensure continued connectivity and did cybersecurity drills. Analyst Sandy Shen at Gartner recommends doing emergency drills like this once a year to stay prepared for whatever the future might hold by identifying gaps in policies, technologies, workforce planning, and processes.*

Learning from disasters and crisis is what post-traumatic growth is really all about. It is taking the trauma and the problems and turning them into solutions for the future. Though many companies were caught unprepared for the COVD-19 crisis, there is no doubt many more are already working on their post-crisis plan to ensure continued success.