April 15th, 2020 | By: Oscar Maril and Eduardo Ortega
On the occasion of the pandemic crisis generated by Covid 19 and our forced reclusion in Santiago and Madrid respectively, we have had the opportunity to talk extensively with corporate clients in executive positions and with colleagues in the academic and consulting world. We have also had the time to review much literature and documents on leadership and crisis management.
Encouraged by the insights gleaned from those conversations, the reading and our long experience in corporate life and as international consultants, the decision arose to share our reflections with our clients, reflections related to what we have called Effective Leadership in Times of Crisis.
We are facing what will be, according to all forecasts, the greatest global economic, social and geopolitical crisis of the last 100 years. This crisis is affecting - and is affecting - corporate life and the very survival of companies.
It is not surprising then that more than 3/4 of CEOs recognize that their companies were not or only “somewhat” prepared to face this complex scenario as confirmed by the EY survey presented in a webcast last April 8.
As consultants, we have talked a lot with our clients, first and second level executives, during our exercises with them and their respective teams, about the importance of exercising effective leadership, knowing which are its attributes and which are the derailers that affect it. Today, more than ever, these attributes and derailers are enhanced as a result of this unprecedented crisis.
Communication with different stakeholders, empathy, motivation, energy transmission, listening and influencing skills, corporate social responsibility, decision making and cultural sensitivity, in other words, the elements that define how to effectively lead people and teams, are now of decisive importance for the medium and immediate future.
In our reflection process, we have questioned to what extent those with corporate responsibilities, starting with CEOs, are willing today to review their leadership styles, attitudes and behaviors and, more importantly, to modify them under the circumstances.
As the philosopher Ortega y Gasset said, “man is and his circumstances”. Well, today those circumstances not only advise, but also force us to do things differently or to do things differently. This is the real challenge facing corporate leaders.
In the near future, those who survive will be judged by their ability to adapt and by the style of leadership they have exercised, by their ability to identify the obstacles they face, by their courage to remove those obstacles that can be removed or to navigate around those obstacles that cannot be removed.
An additional complexity that should be mentioned, and which we do not feel qualified to address, is the remote communication that technology allows, but which is not a minor element in this equation.
Every crisis represents a risk, but at the same time an opportunity. We firmly believe that this is the case.
From this, some questions to ask ourselves then are: To what extent are our leaders prepared for this crisis; and most especially, what are the Leadership practices that are really effective in the face of these circumstances?
Ronald Heifetz, (Harvard professor, author of iconic books and a reference in these matters) makes some very relevant distinctions to understand situations such as the current ones. He differentiates between two types of challenges that organizations may face at many moments in their future: Technical Challenges, which are those that can be solved with the knowledge and processes that the organization already has. These can be extremely complex (changing core systems; integrating an acquired company; entering a new business/market and many others), but we are still moving within known territories. On the other hand, Adaptive Challenges are those that can only be addressed by changing our paradigms, our beliefs, our way of seeing the world (or at least our business), testing our mindset and radically changing our habits. They challenge our organizational structure, processes, power distribution and decision making. None of this seems to provide an answer to the urgent needs that are presented to us, (abruptly, as in the case we are experiencing). What we know as business as usual no longer exists. We are forced into unexplored environments. The Covid19 pandemic undoubtedly confronts us with a challenge that will test our companies' ability to adapt.
According to Heifetz, in order to face Technical Challenges, it is possible to do so on the basis of the authority provided by accumulated knowledge and the role granted by the hierarchical order of the organization. The problem is that crises such as the one we are experiencing are characterized by high levels of instability and uncertainty, constant changes and deployment of new and unknown scenarios in a rapid and unpredictable manner, (3). Put in these circumstances, there are clearly no leaders who have all the appropriate answers to each new problem, and therefore do not have the capacity to respond with the required agility. All that has been learned so far is insufficient. The practices used so far - and which have led us to success - are ineffective in facing the new demands.
Adaptive Challenges require new leadership styles. What are the practices of Effective Leadership in times of crisis?
1- Focus on our Purpose and Values - These circumstances should force us to review, redefine or reaffirm our mission as a company: What are we here for, what is our role in society, in which direction should we move? From this it is necessary to define the priorities; which are the 3 or 5 most important initiatives on which we are going to concentrate (and consequently, which others we are going to leave aside), what is what really matters to us (what are our real values). If our strategic plan was to gain market share; to increase profitability; to improve our efficiency ratios, etc., it will probably now be: how we are going to ensure the health and safety of our employees; how we are going to ensure the service of our customers, what their new needs are; how we are going to ensure operational continuity; how we are going to ensure the financial liquidity of our company. A good way to evaluate if our decisions are the right ones is to ask ourselves if after the crisis, as an executive we will feel proud of them.
2- Inspirational Communication - From the above, we must align our team. If effective communication is always a necessity in all organizations, it is now of critical importance. All employees must understand and share the new roadmap. To do this, we must transmit clear, well-articulated messages: what we are going to do and what is the logic behind this plan. What are the values that guide our behavior. These must be simple and direct, demonstrating the maximum possible transparency. At the same time it is very important to give signs of optimism and confidence; “together we will get through this”, and we must show the light at the end of the tunnel, “this will pass... then we will look back and realize what we have learned along the way... we will come out of this crisis stronger”, or as Queen Elizabeth II recently said in her speech to her people “we will meet again”.
3- Concern and Care for Employees - For this it is fundamental that the leader shows sincere interest and genuine concern for his collaborators, empathy, (4). Confinement generates intense emotions such as anxiety, fear, anger, grief, insecurity, guilt, feelings of loneliness... According to “The Economist”, (5) traumatic events such as the ones we are experiencing can damage people's mental health. In fact, they add that 2/3 of the population declares that it is very difficult for them to maintain optimism, while at the same time there is a significant increase in cases of domestic violence and alcohol consumption. On the other hand, people lose orientation as to the focus of their work, their sense and feeling of belonging weakens. For this it is necessary for the leader to be available and present on a permanent basis, (11) through virtual team and one-on-one meetings, instances in which he/she must show respect, appreciation, understanding, empathy and interest in health, understand the state and needs of each person. Offer trust, support and recognition.
4- Decision-making and Empowerment - In crisis contexts, what is relevant is not to define a master plan to face it, given the constant and unpredictable changes that occur, but to promote the conditions so that the employees who constitute “our front line” can solve problems and make the most appropriate decisions, given the information they have at that moment. This “front line” will be made up of those who are in contact with our employees, customers and who maintain operational continuity. For this, Gemma D'Auria and Aaron De Smet, (6), (10) recommend creating a network of multidisciplinary teams in charge of managing priority initiatives. At the same time, effective two-way communication channels should be created to receive relevant information for decision making and monitoring progress. Thus, the role of Senior Management will be to reinforce and ensure the strategic directions and facilitate the work of these teams.
Control, excessive pressure and micro-management in times of crisis and especially in teleworking contexts only generate “passive-aggressive” responses (saying “Yes” thinking “No”) from employees, with the consequent drop in productivity and engagement. The recommendation is to listen, to promote disagreements, creating a “Safe Space” or a space of Psychological Safety, in which employees feel the confidence to give their opinions and contribute. It is the opportunity to practice management by objectives, giving flexibility for each employee to adjust their own schedules and organize their activities, providing confidence and support.
5- Leading by Example - Effective leaders in facing adaptive challenges use positive examples to model the attitudes and behaviors of their team members, (7). At this point, Gemma D'Auria and Aaron De Smet, (6) argue that leaders must demonstrate what they call “deliberate calm”, meaning that they must demonstrate the ability to separate themselves from the contingency and think about how to navigate these choppy waters. This ability is based in large part on the humility to recognize that they do not have the answers to everything, but they do have the energy and conviction to face the storm. At the same time, leaders must adopt a positive attitude, express optimism and confidence, balanced with a good dose of realism.
The word Crisis comes from the Greek Krisis meaning “to separate”. Indeed, crises establish a “before and an after”... It will depend on our leadership that “after” Covid19, our organizations emerge stronger and that our ability to influence as Leaders is more effective and powerful.
Finally, we propose an important topic for reflection:
What is the legacy we want to leave as Leaders and as a Company?
Authors:
Eduardo Ortega is Consulting Partner - Executive and Team Coach; expert in Talent Management and Leadership Development - Santiago.
Oscar Maril is Consulting Partner - Executive and Team Coach; expert in Talent Management and Leadership Development - Madrid
Bibliography
1) Martin Hirt, Sven Smit, Chris Bradley, Robert Uhlaner, Mihir Mysore, Yuval Atsmon, and Nicholas Northcote: “Getting ahead of the next stage of the coronavirus crisis”, McKinsey & Company, April 2020
2) Ronald Heifetz, Alexander Grashow, Marty Linsky: “The Practice of Adaptative Leadership”, Harvard Business Press, 2009.
3) Gene Klann: “Leadership Crisis”, Center for Creative Leadership, 2003.
4) Nancy Koehn: “Real Leaders are Forged in Crisis”, Harvard Business Review, April 3, 2020.
5) “How will humans, by nature social animals, fare when isolated?”, The Economist, April 4, 2020.
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