June 15, 2020 – In the current pandemic and in a post-peak COVID-19 world, boards and senior management must reassess the strength of their teams to address the impact of this and future potential crises, be they biological, nuclear or other events, according to a new report by Odgers Berndtson.
“Conversations I have had with leaders across a range of industries shed some interesting perspectives on the challenges and opportunities we face in this new world,” said Tim McNamara, author of the report and vice chairman, U.S. at Odgers Berndtson. “Leading in a crisis environment requires vastly different skill-sets and teams, including communications and decision styles to make certain that often geographically diverse groups can be highly motivated in ensuring business continuity and long-term success.”
“In partnering with multiple current clients, the internal decision practices around hiring have been so protracted that what would normally be accomplished in a few weeks is taking months and critical hiring decisions stall,” he said. “Leaders must also keep in mind that at a time when employees are worried about their family’s health and economic future, their priorities unsurprisingly turn inward.”
Susan C. Keating, CEO of WomenCorporateDirectors, said: “With concerns reaching far beyond immediate bottom-line calculations, organizations need directors who can bring a 360-degree view of issues to these discussions – who consider with empathy, nuance and balance in order to protect the long-term viability of the business and the safety of their people.”
It is also the time to create new processes for evaluating additions to the management team in assessing temperament, skills and decision styles in reacting to and leading in a crisis, said Mr. McNamara. And it is all the more important when the near to longer term calls for social isolation. “Just read the reports in multiple publications, including in Newsweek dated April 1, which stated in the week of March 21 alone spirit sales increased by 75 percent over the same period in 2019 and all alcoholic beverage sales have increased by 55 percent proving that in the current crisis alcohol sales have surged,” said Mr. McNamara. “At the same time multiple articles have cited domestic abuse is acting like an ‘opportunistic infection’ with a worldwide rise in domestic violence.”
Tim McNamara, K.D. leads the U.S. transportation & infrastructure practice and also focuses on the areas of aerospace & defense, and cybersecurity at Odgers Berndtson. With over 25 years of management consulting and industry experience, he consults with international clients including governments, M&A advisory, private equity and P3 firms.
“War gaming and running red and blue teams is not likely to be enough in creating predicable behaviors in a real-world future crisis,” he said. “Knowing your people, understanding their drivers, leveraging the board and pivoting into a new communications style is a good start.”
Here are five questions to consider:
1. What impact is social isolation having on our business and people?
Social distancing, technically defined as isolation, has caused significant mental health issues in the population across the globe. “Depression, dementia, social anxiety and low self-esteem are just a few results of the current normal,” said Mr. McNamara. “We are social by nature and isolation is physically bad for the human race.”
Mr. McNamara points to a whitepaper on this issue by Michael Bond, “How Extreme Isolation Warps the Mind,” in BBC Future. Mr. Bond reported that some experiences with psychological experiments on the effects of isolation and sensory deprivation had to be called off due to the extreme and bizarre reactions of those involved. Chronically he noted that lonely people have higher blood pressure, are even more vulnerable to infection, and are also more likely to develop Alzheimer’s disease and dementia. “We all want to be alone from time to time, to escape the demands of our colleagues or the hassle of crowds,” said Mr. McNamara. “But not alone alone. For most people, prolonged social isolation is all bad, particularly mentally.”
“Future leaders will have to learn how to manage increasingly larger remote teams, coordinating a variety of different skills and personalities,” said Rob Strain, president of Ball Aerospace. “This will be significantly more complex for leaders, who will also need to be sensitive to employees running a virtual workplace in their domestic environment.”
2. How are our leaders responding?
Those leading within the current and future global crises will need to be agile, compassionate and definitely not risk adverse. “They will also need to overcome communications challenges,” said Mr. McNamara. “In the past 60 days I have already seen multiple instances where senior executives were frustrated and discouraged. In one instance an officer of a large global firm shared his consternation and frustration about his inability to effectively communicate and act with senior management and the board.”
“In one scenario, expectations were very misaligned with communications styles vastly different and no easy way to reconcile the misalignment because the parties could not travel and meet and there was no social interaction,” he said. “Many of today’s leaders are older and are far less adept in using social media platforms and meeting protocols like Adobe Connect, Slack, WebEx and Zoom. Possessing these skills will be critical in going forward.”
3. Do we really know our leaders?
“Operating in any crisis is not business as usual and most of today’s executives have not been tested in a world war like many of our parents or grandparents were, much less in a global pandemic,” Mr. McNamara said. “The potential outcome of making decisions in a very compartmentalized environment is all the more critical as senior management and even boards do not know what the capacity their leaders have for operating under fire.”
Considering some of the required skills for leading in crisis it is not a shock to see that globally many female leaders like Angela Merkel of Germany, Mette Frederiksen of Denmark, Tsai Ing-wen of Taiwan and Jacinda Ardern of New Zealand are significantly out-leading other world leaders, said Mr. McNamara.
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“Political risks have not stopped any of these leaders to decisively act, yet doing so with real compassion and a great high-touch communications style,” he said. “Taking their approaches into the business world, in a crisis, employees need to be managed with patience yet at the same time there must be a demonstrated confidence and a clear strategy by leadership. Leaders must be aware of issues of great concern to each employee as there is a fear of the great unknown. Technology can be a useful tool in a time of crisis, but it cannot be a substitute for human interaction. Yesterday’s assumptions and business plans might not be relevant for today and we do not know what next Black Swan the future will bring.”
4. Are our leaders who they need to be?
In times of crisis, management will need to be highly transparent with employees and all stakeholders. “While in a crisis it is easy to get consumed with micro issues, real leaders know that they must focus on macro issues like business strategy and future direction,” Mr. McNamara said. “Even boards are likely to have to step up and become more involved. Old ways of doing things will of necessity change.”
“Many executives will fail in this crisis environment not because they are bad managers, but because they do not have the skills, style, temperament or patience for operating in a crisis environment,” Mr. McNamara said. “A lot of mistakes will be made and those executives who are hierarchical and ego-centric will fail the most. The informal and formal networks of yesterday have collapsed and communicating in a social-distancing environment is abstract and uncomfortable for most executives!”
Mr. McNamara said that crisis-adept executives are “those who are thoughtful listeners, seek wide counsel, and have the ability to expend a lot of one-on-one time with managers and employees. Of necessity they will possess a lot of emotional intelligence and be very empathetic. Empathy, however, cannot be misunderstood for making the tough and at times unpopular decisions.”
5. Do we know who our potential hires need to be?
“Firms seeking to add talent to the management team must create a strategic orientation toward hiring that includes a strong leadership assessment of how a future executive is likely to lead and manage in a national or global crisis,” Mr. McNamara said. As noted by the management training institute among the key leadership skills needed for an executive dealing with crisis are:
- Communication; Agility; Self-Control; Relationship Management; andCreativity.
Mr. McNamara also offered some key questions to be resolved before making a hire:
- How does the executive cope with sudden change?
- Is he/she decisive enough and how considerate are they in their decision processes?
- Are they a compartmentalized risk taker or holistic?
- Are they sufficiently compassionate to motivate their teams or do they take an autocratic “let’s meet the business plan via a command and control approach”?
“Getting the right answers to these and other questions could have a significant impact on the future success or failure of the enterprise,” Mr. McNamara said. “Now is a time for taking aggressive steps in preparing for the future and unknown crises awaiting us. Not to seek counsel, not to be open to new paradigms and relying on past practices will put in peril your organization’s future and survivability.”
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; and Stephen Sawicki, Managing Editor – Hunt Scanlon Media