Facing social instability, unimaginable business disruption and potentially the greatest economic crash, adaptive leadership is vital to both strengthen the business and safeguard your greatest asset: your employees.
Crises are not new, nor is the concept of leading in a “VUCA” environment (volatile, uncertain, complex and ambiguous). However, with the unprecedented speed of COVID-19’s impact on life and business, adaptive leadership in a VUCA environment takes on a new meaning. In the space of just a few weeks, over 93% of the world’s population suddenly found themselves living in countries with restricted travel and are now having to find new ways of living and working. With no playbook on how decision-makers should respond, most, quite understandably, are struggling to navigate the impact this new reality is having on their business and workforce.
During times of continued growth and prosperity, leadership agility is often neither valued nor practiced. In times of volatility however, true leadership adaptability and agility is paramount and requires a very different set of skills and capabilities. The COVID-19 pandemic reminds us of the importance of basic human needs (outlined by Maslow) such as safety and belonging. What is generally not emphasized in management papers is the need for leaders to appropriately adapt their communication, decision making and actions to these human needs as they evolve during and post crisis. EY’s COVID-19 taskforce recently presented an outline of four organizational stages a firm must navigate during and after the crisis:
A leader’s ability to respond and adapt to the changing needs of an organization firstly requires an awareness of which stage the organization is in at that particular moment. From this informed position, leaders can then make the appropriate decisions and take actions to balance both the business need and the needs of its employees.
To illustrate and correlate the needs we have as humans with our needs as employees, we have overlaid these with the four organizational phases as follows:
Why is this correlation important?
Peter Drucker in 1999 said that employees are the most valuable asset. However, as numerous examples during the 2008 financial crisis demonstrated, people not led in the right way can also become a liability. When trying to bounce back from a crisis, good and decisive business decision making is clearly essential, but ensuring employees are positioned to live and work as a firm’s greatest asset, could be a decisive recovery factor. Leadership must therefore adapt to each phase of the journey to appropriately empower, motivate and engage people and their needs as individuals and employees:
1. Crisis management: Lead from the front with empathy and clarity
Most leaders having to deal with crisis understandably choose corporate survival as their first priority. Ignoring financial stability, supply chain integrity and cash flow would of course be unthinkable, but when survival itself also relies on employees and their continued commitment, leaders ignore the ‘people impact’ at their peril. The magnitude and impact of this crisis demands, now more than ever, a leader’s demonstration of empathy, vulnerability and caring relationships. Such leadership traits become paramount when employees feel vulnerable and fearful. A leader in the crisis phase must resolve the situation quickly and outline the impact the situation is having at both an organizational and human level. This includes clear and transparent communication that is appropriate for this particular phase. For instance, messaging about productivity, innovation and creativity when staff are preoccupied with their own basic needs or job security will simply create imbalance and unrest. Leaders must do whatever is necessary to provide the required assurance to avoid uncertainty and unnecessary fear. Recurring briefings are required to reaffirm that everyone is in the situation together, that the purpose has not changed but that swift action is necessary to ensure the company can continue providing the employees’ basic needs.
2. Business continuity: Engaging leadership to rebuild a viable business
Maslow’s second level establishes the human need for safety, stability and freedom from threat. For leaders, the business parallel in COVID-19 times is the assurance that employees are safe, that there is adequate sanitization and equipment for front line staff, that office shutdowns have happened for non-essential staff and that home office protocols have been swiftly addressed including adequate technical infrastructure etc. These areas are of course vital, but with many people now facing a whole new work and social reality, emotional stability, wellbeing and engagement increases in importance. Agile leaders are those who can quickly adapt to this new phase. They must engage their teams, exercise responsibilities and duties for the benefit of the company, and at the same time, recognize the impact their crisis management decisions and approach will have on the workforce, their motivation and most importantly, their wellbeing.
Engaging employees and then transitioning the organization through this stage together, requires leadership to apply different skills, capabilities and tools. These skills will vary from industry to industry. Companies such as those belonging to the “BEACH” category (Booking, Entertainment & Live events, Airlines, Cruise and Casinos and Hotels & resorts) that were stable and profitable before February, are now suddenly facing a new reality. Here, leaders must balance tough business decisions to avoid financial collapse whilst also ensuring business transformation, safe working conditions and immediate job security. Getting this balance right is no simple task, but the impact on employee motivation, commitment and resilience will be a major factor in the firm’s estimated medium-term recovery.
3. Business resilience: Strengthening employees through belonging and collaboration
The next level requires a balance between the personal sense of belonging, and in a corporate context, collaboration and teaming. With entire workforces now suddenly working remotely and in isolation, it is an additional challenge to create a sense of belonging in a team with a shared corporate value and vision. Additionally, depending on decisions taken in the first two stages, employee trust and stability may have been broken and therefore require rebuilding. Over time, an added leadership issue to contend with is mental, physical and emotional wellbeing of staff working from home. Only weeks into the lockdown for most countries, we are already seeing instances where increased attention is required, and leaders must show care and reciprocity with those who feel isolated due to living and working alone or have complex personal situations. Clearly, working through this crisis and then the immediate aftermath, requires leaders to adapt once again and continue to focus on maintaining and growing strong links between employees. Those who feel comfortable sharing knowledge, concerns, questions, mistakes and ideas, can collaborate effectively, innovate and be creative. They will as a result, have an increased ability to work through adversity and therefore be more resilient in the future.
4. Transforming business & society: Leadership providing employee fulfilment and actualization
The post COVID-19 reality will certainly be a very different one. We will witness a dramatic restructuring of the economic and social order in which business and society have traditionally operated. A shock of this scale will create a seismic shift in the preferences and expectations of all, altering the way we live, work and use technology. Even though this future is currently unclear, business leaders must soon start focusing on and anticipating the likely political, regulatory and fiscal changes and the impact this will have on business and employees. Companies will need to reinvent themselves, others will have to experiment and foster innovation to reimagine ways to give back to society. The ideal balance in providing employees with leadership at the point in time will once again require different skills and capabilities and will test agility and adaptability even further. Every organization will enter uncharted territory and will have to take calculated risks to seize new opportunities. Rebuilding employee resilience, adaptability, trust and esteem will be realized through innovation, creativity and a positive attitude towards change.
The impact of the COVID-19 crisis on business and its employees is clearly unquantifiable at this stage. What we hope to have shared in this paper however, is the potential impact leaders can have when they align the organizations’ needs with the needs of their employees. Agile, empathetic and adaptable leadership offers their organization the greatest chance of moving through the four stages effectively. Leadership that can react to rapidly evolving needs at each phase outlined above, will most likely result in an organization that comes out of this crisis even stronger than before. Adaptability should become the new normal and leaders who place employee wellbeing at the heart of their approach will guarantee financial stability – not the other way around.