10 Jun 2020
An unprecedented crisis calls for a new leadership playbook
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With businesses facing prolonged economic uncertainty, Natasha D’Souza finds out how leadership should adapt and what leaders must do to survive and thrive in an unprecedented crisis.
“Leaders must understand that we are living in a world marked by uncertainty, volatility, and deep transformational changes,” said World Economic Forum (WEF) founder Klaus Schwab at the forum’s Annual Meeting in 2017. Looking back, much of Schwab’s address that year is a telling premonition of our world today; reeling under a global pandemic that has brought the global economy to a virtual standstill, forcing companies of all sizes to adapt and evolve in a still fluid and vague environment.
“One leader told me that heading a business during this pandemic is a lot like leading through a fog. Most pilots will tell you, they’d prefer flying through turbulence as opposed to fog. Not being able to see is something that disturbs all of us,” says Linda Hill, the Wallace Brett Donham Professor of Business Administration at the Harvard Business School and chair of the school’s Leadership Initiative.
Exemplary leadership in the current crisis bears the characteristics of much of what has constituted remarkable leadership in crises of the past. Agility. Resilience. An intuitive ability to decipher emerging industry and consumer trends. Speed and precision in decision-making. But journeying through the “fog” of the COVID-19 crisis, amidst the convergence of a public health emergency and an economic downturn, a new paradigm in crisis leadership is taking shape.
Innovation through collective genius
Routine innovation projects or the occasional transformation initiative falls short. And the playbook from the past won’t cut it. “No business leader in modern history has experience leading a company through a pandemic so there’s no one you can learn from.
"Unprecedented times demand unconventional approaches," shares Martin Jahn, Executive Vice President of Sales and Marketing and Managing Director for the Volkswagen (VW) brand at FAW-VW, a Volkswagen Group joint venture with FAW Group in China.
“Leaders recognize that the emerging new world may be unlike anything they’ve experienced before so relying on history will get in the way of coming up with solutions effective to this specific situation,” adds Hill, who also advises leading organizations around the world through her consulting firm Paradox Strategies.
Indeed, innovation in this deeply volatile era of business demands a collaborative approach. According to Hill, the most successful leaders in a crisis “distribute leadership,” creating the context in which others are both willing and able to innovate. In an earlier interview with the WEF, Hill had remarked:
“People don’t want to follow a leader to the future – that is yesterday’s model. They want to co-create it. Innovation is a collective activity, one in which different people – depending on their particular talents – come forward at different times to move the group where it needs to go.”
In her book Collective Genius, Hill surmises that “leading innovation requires a belief in every individual’s slice of genius” and “a sense of generosity to share power, control, and credit”. Leaders are instruments through which an organization achieves outcomes and drives change. He or she is, therefore, the catalyst and stage-setter rather than the performer, a position “not always easy for leaders with star talent themselves”, she says.
A human crisis at its very core, the COVID-19 pandemic has highlighted the power of empathy in a way previously unseen. “There is still a lot of machismo in management today but expressing empathy effectively and authentically is gaining ground as a leadership behavior,” suggests Noel Curran, the Director-General of the European Broadcasting Union (EBU), considered the world’s foremost alliance of public service media organizations, spanning 116 members across 56 countries.
Curran believes that at all times, but especially in a crisis, leaders need to be incredibly perceptive of the organizational “mood” and communicate constantly in “a high-touch, deeply-connected way”. He recalls hosting 15 meetings in a row with his team in late February, just as the organization commenced working from home. “I told them face-to-face that I am here to not only tell them what we are doing as a company but to also listen to them. Listening with empathy is absolutely key because this is a situation where people are not just nervous about their livelihood but about their health and the health of their loved ones as well.” Martin Jahn of FAW-VW agrees, adding that empathy can sometimes be as simple as “showing more personality and authentic emotion during calls, sharing what books you’ve been reading or movies you have been watching or an amusing anecdote about working from home while living with family”.
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Hill believes this is the kind of approach that engenders trust. “Trust in a leader is a product of competence and character.
We know our leaders are not competent in this situation because this is an entirely unexpected crisis. Therefore we look to their character.
People are watching leaders in a different way. We want to see our leaders genuinely care about us, our families, and our community,” she explains.
Pressure test your crisis-response capabilities
Curran believes every crisis is inherently an opportunity to test the organization’s readiness and identify hitherto unknown leadership potential. Leaders need to be incredibly perceptive and determine “which of your people are best wired in a crisis state versus a steady state of operations,” says Curran. “I am amazed at how some people have really stepped up during this situation and shown dedication and level-headedness. These are going to be individuals I would look to incorporate in my crisis management team and further cultivate their management capabilities.”
Given the dramatically different nature of this crisis, Curran suggests this time is also an opportunity for leaders to expand their scenario-planning efforts in preparation for future pandemics. The coronavirus crisis, in particular, has been marked by a range of disruptions, including a sudden shift to working from home and fluctuating travel restrictions. “Scenario planning forces you to think ahead. Not only is it practical but it is a major confidence booster because you and your team are mentally primed, having gone through the motions and discussed what actions you would undertake.”
An empowered and egalitarian culture
As the pandemic is both a global and a local crisis, Hill contends that “meaningful growth and transformation counts on successfully leveraging a variety of new voices to both process and ideate what the company needs to do next”. Growth-focused leaders actively seek and champion diverse viewpoints because “you rarely get thoughtful, innovative solutions without diversity and conflict,” she says, adding: “I see many leaders I advise deliberately wanting to include younger employees in their COVID-19 taskforce.”
Organizations that remain hierarchical and bureaucratic, without empowering employees to freely share their views will ultimately create pockets of atrophy and “slow down response time in a crisis”, suggests Hill. “It’s not enough to just create a platform for people’s perspectives. If you have a culture where people are uncomfortable speaking up, leaders need to break that ingrained habit and empower employees to communicate without penalty.”
Curran agrees: “As a leader, it’s essential that you think ahead and even more so that you empower others to help you think ahead. Get your team comfortable with making mistakes. Course correction is on par for this course. This is all new territory so mistakes and inconsistencies will happen. The important thing is to figure it out together and move on.”
Are top executives ready to lead the change needed?
Research with nearly 2000 senior executives finds leadership teams are lacking the traits seen as important to succeed through a major disruption.Download report
To view our current, most recent 2022 edition of the Leadership Confidence Index, click here.
Leading into the new normal
As leaders move through the fog of the present, a new generation of business leaders are waiting in the wings and watching and learning from their predecessors. Leaders who will emerge in the future will be deeply influenced by the decisions of those in positions of power today and create a different framework for true leadership. “When you’re in a time of great change, it is an opportunity for leaders to do things differently. Impactful leaders must be agile, rapid learners, eager to experiment and pivot, open to dialogue and criticism, willing to co-create and display empathy and social responsibility,” says Hill.
“This fog will last for a while. It’s going to be a marathon.”
In a series of articles responding to the impact of COVID-19, OBSERVE looks at how companies and their leaders are adapting and reimagining their organizations’ strategies and what lessons leaders have learned through the immediate impact of the coronavirus pandemic.
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