Be a good leader in a bad situation
The ongoing COVID-19 pandemic is causing turmoil across markets and businesses. The situation calls for leaders to step up and show true leadership. This article discusses few important guidelines that we hope you find helpful. Firstly, don’t let fear define you and your organization. Lead your organization’s emotions. Secondly, don’t forget the longer game. Take care of the issues at hand and brave the future.
Safety and health are currently a top priority in people’s and companies’ agenda. The COVID-19 constitutes a real threat for many and requires swift action. On top of the direct health risks, the resulting shock on real-economy and financial markets is hitting hard many companies. Today’s uncertainties and future threats can generate fear in organizations that, despite its legitimate reasons, can generate unnecessary additional harm and suffering. It is therefore now more important than ever that leaders manage the collective emotions in their organization.
1) Leading organization´s emotions
Anxiety and fear may become predominant feelings in many companies. This is a natural response to all the signals people are sensing within and outside an organization. These fears are instrumental in that they make people identify risks and motivate beneficial actions. However, too much fear can lead to paralysis or over-reactions. People may overly focus on emotionally salient aspects of the situation but ignore aspects that make a bigger difference now and in the long term. The fears may also distract employees from work, especially if they have not received clear guidance on how to act and therefore resort to gossip and speculation.
We encourage all leaders to clearly define those activities that people should engage in and what activities they can postpone. Further, leaders should provide clear guidance on how to ensure safety in the focused activities. These concrete measures help people cope with the threat and thus reduce related fear and anxiety.
Naturally, for leaders to understand what the most critical activities in this unfortunate situation are, as well as the alternative ways for performing them, they need sufficient situational awareness – covering macro view, industry implications and especially the implications on customers and suppliers, own personnel and key operative processes. To ensure such an understanding, leaders should involve a sufficient number of middle managers and employees in joint planning of the crisis operating mode. Together they are better equipped to determine what should be continued and what should be changed.
Managing the emotional tone during such a session is important. Panic should be avoided, and leaders should: (1) show calmness. (2) describe the plan so that people know what to expect and what they are trying to achieve (3) listen and show empathy when people express their concerns.
2) Not forgetting the long game – brave the opportunities
During an external shock like the one we are currently undergoing, a characteristic which sets apart winning companies from the rest is the ability to identify and capture opportunities to grow and improve one’s business in the long-term. While clear short-term priorities are a necessity, we encourage leaders not to neglect the longer game. One way for this is through maintaining an updated view of plausible external market scenarios which the company might face, together with a playbook of company’s own potential moves. These can include both initiatives for mitigating the negative impacts and investments for seizing opportunities. When planning the scenarios and playbook, executives need to answer questions such us where we could free-up costs and resources and what is the long-term growth and value driver in our portfolio which we must cherish.
Being prepared to face multiple external realities improves company’s ability to react swiftly when needed, whether it’s a matter of organizational restructuring to reduce costs, or raising capital for acquiring a financially distressed competitor.
This is easier said than done especially in an organization which predominant emotions are fear and anxiety. When leaders are able to spread phychological safety and long-term optimism within their organizations, their organizations are better equipped to face the current reality while taking actions to build the long-term success.
In concrete terms, the immediate fears can be temporally overcome by using psychologically advanced techniques that help you and your people reflect how today’s actions will look like in future. Simply by imagining that you have travelled 5 years into the future and that your business is doing better than ever. And when you are there, you can “look back” how your actions during this crisis enabled you to take care of your employees’ and firm’s well-being and generate more value for the society, your customers, and shareholders in the long term.
Now is the time to be a good leader in a bad situation.
Tomi Ere, Partner
Olli Lehtonen, Partner
Timo Vuori, Executive Advisor