Leadership in a Time of a Pandemic

Leadership in a Time of a Pandemic

April 27th, 2020 // 3:13 pm @

Leadership is critical to any business, but it becomes particularly critical in a time of rapid change. The present Pandemic has for almost every business created the greatest and fastest change they have ever experienced.

During such times Leaders have to deal with staff and customers who are scared. Scared of the Pandemic, which as an “Unseen Killer” is particularly frightening, but also with concerns about their jobs and the future of the companies they work for. This requires honest and frequent communication, and a clear strategy for how to deal with each part of the change we are experiencing.

The world is a different place from that of three months ago, and we are now only in stage one of that change. However long the lock down lasts, at some point we will enter a period of transition from the lock down, and eventually we will reach a new normal.

People are naturally normally concerned by change, when that changes is as significant as that we are experiencing those fears become more significant. And during such times having a clear strategy and communicating it effectively are critical in achieving the changes required in every business.

The norms of leadership have another dimension during all parts of the change we are and will experience, that is the decisions leaders take can and probably will endanger the lives of staff and customers. The reality is when a for example when a retailer chooses to reopen, they put staff and customers at increased risks. Companies and the wider society are going to have to make trade-offs between the economic need for reopening and the human risk that entails.

Every company and industry will be different, but there are three key stages of this crisis and each will need a different strategy, and rapid change to implement it. Much of the world is in stage one “Lock down”. Many countries have and we must pray never get to where we are now, but as yet areas of the world only lightly touched by the Pandemic may as time progresses have to face what we are in now.

Stage two will be the transition from “Lock Down”, this will happen, when and at what pace each country will have to decide, as will to some degree will companies. Some companies are reopening now, such as Aston Martin, and Wimpy Builders, and several high street retailers are looking to a plan to reopen.

Stage three will be the new normal, it is hard to say what that will look like, but the world will never be exactly how it was. As a society we will view the world differently when the worst of this is over.

The time line for the move through these three stages will be critical to minimize deaths from the Pandemic, and moving towards a new normal. The time line will be driven by government decisions but also by what company leaders choose to do, and how the wider society reacts.

While every companies journey through this crisis will be different, there are several basic types of organization and the fundamentals of their journey will be the same.

We will have companies for whom this will be a win/win process, where they will do well during the “Lock down” and will carry that commercial advantage forward. Disney’s new streaming service will do well with all children at home and parents looking for ways to entertain them, and they will carry this advantage forward into the new normal where many new subscribers will retain their subscription. Many online business’s such as Amazon and online gambling will get and probably keep a lot of new customers. Their strategy will be to maximize the gains during the lock down, and retain as much of that as possible through the transition to the new normal.

Some companies will have short term wins during the lock down, and the transition but will see downturns to their business’s certainly during the early part of the new normal. As examples people selling bikes or gym equipment to the public, I am sure are enjoying a boom in sales only limited by inventory restraints. However, as we move into the new normal those who were going to by personal bikes or training equipment will have done so, and gym’s will be in no financial state to be investing in new equipment. Such companies are going to need to manage a boom now, sharp declines during the transition before hopefully surviving to a new stable normal. These companies need to use the cash flow from the short-term boom to prepare to deal with the downturn during the transition and the early stages of the new normal.

Many companies will simply loose some or all of their revenue during the “Lock Down” which they will not ever see, and a slow or fast return to a more normal world as we transit out of the “Lock Down”. Many service industries are in this category, such as Barbour’s, Nail Salons and Spa’s, and much of the hospitality industry. The speed at which these business’s recover will depend partly on when they reopen, but more importantly on how confident people feel being in close proximity to the service providers. This is probably the most difficult to predict, it is worthy of note following World War One, and the Spanish Flu of 1918 to 1920 (Which killed 50 million people) society reacted with the “Roaring Twenties” when people who had survived the war and the influenza wanted to go out and live life to the full. How we as a society react as the lock down ends will be interesting to watch, we could remain very cautious, or we may have pent up need to live life to the full despite the ongoing risk. Such companies will need to remain as flexible as possible to react to consumer sentiment as it evolves.

Sadly, some companies and industries will loose in the short term, the medium term, and may well not survive into the new normal. We have seen a significant rise in the size of the cruise industry in recent years, driven much by retired customers and funded by borrowing to pay for ever bigger and better ships. A significant part of this mature customer base have sadly died in recent weeks, and it is hard to see anyone wanting to be forced into close proximity to others on a cruise ships for a very long time. Care homes face similar dilemmas, with many of their residents dying during the Pandemic, as well as future potential residents. Sadly they will have to go through the pain of loosing residents, their revenue stream even into the new normal will be significantly effected. Such companies can only go into survival mode, reducing costs where possible, and entering into discussions with those who lent them the money to build ships or care homes. Lenders will face a reality where they can repossess a cruise ship when loans are not repaid, but what is the point as cruise ships are as of today an asset with little value.

All of the above scenarios share the one great unknown, which is timing, when will the Pandemic ease, how will individual governments react to that, and how will society react as it comes out of the Pandemic. No one knows when we will be ready to go to a restaurant again, or get on a plane, go to the sun for a holiday. Maintaining flexibility as to timing within your chosen strategy will be critical.

Every business needs to face up to the still evolving crisis we are in and be prepared to take difficult decisions, and the earlier they are taken, normally the more effective they will be. Facing difficult decisions is difficult but as a wise man once told me “Knowing what needs done is relatively easy, having the courage to do it is the hard bit”

This is a time for great leadership, from our politicians and our company leaders. It will require clear strategy, a realization that change is inevitable, effective implementation and timing, and above all effective communication with ones staff, ones customers and the wider society.

 

 


Category : CEO &Leadership &Other Thoughts

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