The world is grappling with a crisis of extraordinary human and business impact from the global coronavirus pandemic.
Above all, it is a human tragedy. Hundreds of thousands of lives have been lost, and countless others are still at risk. More than 500,000 deaths and 10 million cases were confirmed as of late June. Healthcare professionals have made unbearable decisions about which patients get medical care and which ones do not.
The pandemic has also sparked an economic crisis of a magnitude not seen or felt since the Great Depression. Repercussions on livelihoods are extensive. In the U.S. alone, more than 40 million people have filed unemployment claims since President Donald Trump declared a national emergency. The entire job market faces challenges — unemployed, employed, employers, and the people who depend on them.
In parallel, the world is witnessing the best of humanity — and business. Though it’s happening from a distance, people are coming together. In every sector, we are amazed by remarkable acts of altruism, resilience, and ingenuity. Whether it’s fast-tracked vaccine development, rapid shifts from car to ventilator manufacturing, or the redeployment of healthcare workers to the front lines in record pace, the ongoing display of resourcefulness is extraordinary.
To help business leaders through the ongoing crisis, we have developed a three-phased framework CEOs can follow to navigate COVID-19. It outlines the strategic moves CEOs can take to protect people, pivot operations, and position their businesses for a brighter future in an environment characterized by extreme change and uncertainty.
While this framework is focused on how to lead organizations through the coronavirus pandemic, the principles will have applications relevant for other crisis that will undoubtedly occur in the years ahead. One thing is sure: CEOs must break out their best leadership while unleashing the incredible potential of brilliant people at work.
We must all step up. We must push forward. Together, we will overcome.
Phase One: Protect
Start With People
Leadership’s top priority must be to protect people. It’s the right thing to do, and it’s the smart thing to do. Until acute needs are met, assume that’s where your team’s energy is directed. It’s an excellent time to reacquaint yourself with Abraham Maslow’s work on the theory of motivation.
With as many as 60% of Americans very or extremely concerned about safety — and 43% very or extremely concerned about making ends meet — fear remains a legitimate concern and hindrance to unlocking your team’s motivation, creativity, and performance.
To that point, Laszlo Bock, CEO of Humu, offers great insight: “At the start of every interaction, you just listen. People who are freaked out and scared are not going to be productive. They’re not going to be effective. They’re not going to move in any cohesive direction. And the human thing, the kind thing, the caring thing is to start with ‘How are you doing? Let me just check in on you.’ So empathy is the No. 1 thing people should be focused on right now.”
When working to help your team, prioritize two elements:
From a physical safety perspective, ensure everyone continues to have access to basics like food and supplies. If you have yet to adopt longer-term work-from-home policies like 54% of America’s largest employers, consider this a wake-up call. Set up remote working options and eliminate nonessential travel immediately.
People are understandably worried about their health, so amend your policies regarding paid sick leave to encourage anyone who feels sick to stay home and recuperate. If someone falls ill, consider easing the burden for any extra medical costs. Such acts promote trust, loyalty, and engagement among a workforce.
For employees who need to be on site, guarantee necessities like personal protective equipment (PPE), deep cleaning, sick leave, mandatory hand-washing, and access to sanitizer. Close common areas, set up isolation pods, and minimize visitors.
Don’t overlook the importance of helping employees cope with the emotional side of COVID-19. There’s also a pandemic of fear, which spreads from person to person faster than the virus itself. Whenever possible, commit to no layoffs like Salesforce CEO Marc Benioff, who used Twitter to urge his fellow business leaders to commit to a “no layoff” pledge for 90 days. Others who have pledged to avoid layoffs in 2020 include the CEOs of Morgan Stanley, Citigroup, Visa, FedEx, and Bank of America.
Leaders are also taking accountability by cutting their own salaries amid tough decisions regarding layoffs and furloughs. The list of CEOs forgoing their full salaries is long and includes the likes of General Electric CEO Larry Culp, Marriott CEO Arne Sorenson, and United CEO Oscar Munoz and President Scott Kirby. Done properly, pay cuts can help struggling companies rebound. There is also tremendous power in the symbolic gesture of goodwill.
To keep team spirit high, closely monitor morale. Listen. Real-time feedback from employee pulse surveys can provide great insights and help you lead confidently. In the virtual world caused by the pandemic, it’s imperative to build human connections.
For some, working from home is not all pajama pants and no commutes. It can feel isolating and unstructured as boundaries between home and work begin to fade. Empower your team to develop new routines, leverage the full extent of technology, and come together. Microsoft CEO Satya Nadella put it well: “There is no playbook for this, and we need to have deep empathy and understanding for each other’s situations.”
While you’re considering the needs of your team members, don’t forget to also take care of yourself. Leaders are under enormous pressure; there is a ton to do, and there are plenty of eyes on CEOs. Know that you are capable of great things, believe in yourself, and tap into your inner purpose for fuel.
Maintain wellness routines, delegate effectively, focus and simplify, manage expectations, and follow the 80-20 rule. Breathe. Ups and downs are inevitable; perseverance is what matters. As Winston Churchill once said, “If you’re going through hell, keep going."
This is a time to go beyond policies and practices while putting people before profit. In many cases, employees are looking to business leaders — not the government — to inform and take the lead. Know that you will forge a reputation and ties for years to come based on your actions (or inactions). It is a defining moment for leadership. Every day is an opportunity to shine.
Rapidly Develop Action Plans
It is possible to make sound strategic decisions even as uncertainty reverberates across the economy. Focus on what you do know rather than what you don’t. Determine likely scenarios while finding ways to stabilize the business.
Developing and running scenario plans is vital when you’re dealing with a fast-moving target like a pandemic. A robust framework accelerates decisions and serves as a road map for behaviors and mindsets, the scope and pace of actions, and any trigger points at which contingency plans kick in. Always stress test plans and challenge your worst-case scenarios. It’s wise to remember that action plans are forecasts and not set in stone. As a result, you’ll want to change and revisit it often.
To support your action plan, you’ll want to take several proactive steps:
In the protect phase, financial stability is an immediate priority. Most CFOs cite economic impacts on operations, future periods, liquidity and capital resources as a top concern (64%) and have already taken steps to contain costs due to COVID-19 (67%). All leaders, regardless of function, should stay extremely close to their financials and maintain an open dialogue with their CFOs.
To protect your position, have your CFO scrutinize cash flow and liquidity while defining minimum thresholds. Cash is everything. To get the ball rolling, improve credit and collection capability, optimize in-house and outsourced accounting, monitor stimulus package and tax provisions, and reduce costs.
Step up collections, expect delayed receivables, control payables, direct payables to important suppliers, and monitor inventory. Review or defer nonstrategic investments, moving ahead with furloughs, layoffs, and pay cuts only when they’re necessary. Remember to put your people first.
Stabilize supply chains
With massive disruptions to global supply chains due to shutdowns, stabilizing and managing risks is imperative to business continuity. Lean heavily on your chief operating officer, chief supply chain officer, or chief procurement officer.
A top priority is assessing operational risks. Identify the weakest link in the chain, and then prepare for rapid reshuffling and restructuring. Track inventory at decoupling points, making important decisions about backup options and the right levels to carry. Should distribution fall through, consider trying a direct-to-consumer model.
Call on your CIO to make sure you are protected in terms of IT continuity and cybersecurity. Open communication channels up and down the supply chain, deploy supply chain visibility tools, leverage relationships, and get creative.
Amazon CEO Jeff Bezos detailed how he was pivoting operations amid the pandemic in an early memo: “We’ve changed our logistics, transportation, supply chain, purchasing, and third party seller processes to prioritize stocking and delivering essential items like household staples, sanitizers, baby formula, and medical supplies.”
“We’re hiring for 100,000 new roles and raising wages for our hourly workers who are fulfilling orders and delivering to customers during this period of stress and turmoil. ... We hope people who’ve been laid off will come work with us until they’re able to go back to the jobs they had.”
Connect with customers
In the most challenging times, you need to protect relationships. There is also a real opportunity to get closer to customers. First and foremost, be a trusted business partner and advisor. Empower your chief sales officer, chief customer officer, or chief marketing officer to pull out every last stop with your response.
Support and empathize with affected customers. Proactively communicate changes, new expectations, and reassure customers of your stability. To focus your efforts, prioritize customers to determine who needs immediate attention, predict flight risks, and understand demand shifts. You can then align your sales compensation with priorities.
Whether your business is in distress, under pressure, or growing, successful leadership amid COVID-19 depends on people. Deutsche Bank CEO Christian Sewing shared this outlook: “We have devised comprehensive crisis plans, we have the discipline, and we have the financial strength to manage through this period. First and foremost, however, we have you. And all of you have proven time and again that we stand together and deliver outstanding performance when faced with complex challenges.”
It is a good idea to identify mission-critical roles and develop succession plans. Being a novel disease, everyone is susceptible to COVID-19. If someone catches the virus or steps down to care for others who are sick, it’s important to have backup plans ready. The last thing you want to do is hastily find a replacement. While the likelihood of a severe case is low, the potential impacts are high — requiring judicious planning and preparation.
Step Up Your Leadership
This new normal requires a new mindset. To protect people and operations, leaders must drive change through superior empowerment, agility, and communication. Borrowing from the inspiring words of President Abraham Lincoln: “The occasion is piled high with difficulty, and we must rise with the occasion. As our case is new, so we must think anew, and act anew.”
Perhaps the most important advice we can offer is to lead through your team. Empowerment is a strategic weapon in this fight, so avoid any tendency to slip into command-and-control mode. Instead, turn your team into a force.
If you haven’t already, assemble a “war room.” These key players should take point on preparing action plans and resolving pressing issues, which tend to crop up suddenly in a crisis. Your chief financial officer, chief restructuring officer, chief operating officer, chief human resources officer, legal, and communications leaders all play important roles. Lean on existing transformation teams to round out your war room, bringing together everyone who might have relevant experience driving organizational change.
As you work to protect the business, your board of directors is another excellent resource. Many board members held senior executive roles throughout the 2008 financial crisis, and they can provide invaluable experience from that time. Different people have different skill sets, so tap into them accordingly.
When the world is turning upside down, managing rapid change relies on mobilizing the organization. Create decision-making structures to drive action and agility, pushing as many decisions as possible through the team. There is no room for seven layers of signoffs. Make it known what requires approval and what does not. As a leader, your job is to clarify priorities, instill confidence, disseminate information, and hold people accountable.
A great showcase of such teamwork comes courtesy of Britain’s National Health Service, or NHS, which raced to expand hospital capacity in the nation. Normally a slow-moving bureaucracy, the NHS built the world’s largest critical care unit to treat COVID-19 patients in only nine days. The record speed of construction was attained by mobilizing 200 soldiers to work alongside NHS staff members, architects, engineers, and other contractors.
A good rule of thumb? Less hierarchy; more entrepreneurship. That said, the CEO remains the ultimate decision maker.
Communicate, communicate, communicate
There is a bright spotlight on communications — internal and external — in uncertain times. People expect leaders to show up because CEOs are the primary spokespeople of their organizations. Don’t handle it alone, though. Draw on the expertise of your chief marketing officer as well as your PR and communications leaders to craft and distribute informative messages.
One of the most important elements of crisis communication is empathy. You might not have all the answers in the early stages, and that’s OK. People look to their leaders to be real rather than perfect.
They also want to feel heard, so spend some time listening. This might be a great time to set up forums and town halls to connect with your organization. At Acertitude, our managing partner invited the entire team to ask questions about his experience and recovery from COVID-19. It was a moment of solidarity for the business, and it helped guide our team members through any fears and unknowns about the virus.
Act with urgency as you work to get out initial communications, updating key stakeholders early and often. Other best practices to bear in mind: Keep messages specific and straightforward, clear up confusion and misinformation, strike a balance between too much and too little transparency, and consider sequencing.
Who needs to hear your message, and who needs to hear it first? Be thoughtful about the order in which you inform employees, customers, suppliers, investors, the public, and so on.
Successful leadership through a crisis depends on clear, consistent communication. It’s a pivotal moment for personal and brand reputations. If there is one piece of advice we can offer during these unprecedented times, it’s to be honest and human.
While the pandemic presents incredible challenges for humanity and business, it also offers an opportunity to work toward a brighter, stronger future. With strong leadership and collaboration, we can successfully make it to the other side of the crisis. And, the lessons we learn from this crisis will help us navigate future disruptions as the world continues to turn.
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