The COVID-19 pandemic has resulted in companies scrambling to take action to ensure they remain afloat in this challenging time. Leaders are also monitoring the stituation and responding accordingly by implementing business continuity plans. According to McKinsey, what leaders require during a crisis "is not a predefined response plan, but behaviours and mindsets that will prevent them from overreacting to yesterday's developments and help them look forward". In light of this, it laid out five behaviours that leaders can undertake to help them navigate the uncertain future.
1. Building a network of teams
In the midst of a crisis, leaders need to forgo the belief that a top-down response will give rise to stability. Normally, companies can typically rely on its comand-and-control structure during routine emergencies to handle operations and carry out a scripted response. However when it comes to crises characterised by uncertainty, McKinsey said leaders encounter problems that are "unfamiliar and poorly understood", and a small group of executives at the highest level are generally unable to collect information or make decisions quickly enough to respond effectively.
To overcome this, clear priorities should be set by leaders for the crisis response and others in the company should be empowered to discover and implement solutions that serve those priorities.
Leaders can organise a network of teams to promote rapid problem solving and execution under high-stress, chaotic conditions.
According to McKinsey, a network of teams comprises "a highly adaptable assembly of groups" that are united by a common purpose and collaborate in a similar way that the individuals on a single team do.
"Some parts of the network pursue actions that take place outside regular business operations. Other parts identify the crisis’s implications for routine business activities and make adjustments, such as helping employees adapt to new working norms," McKinsey explained.
Breaking it down further, McKinsey said the network of teams will consist of an integrated nerve centre covering four areas - customer engagement, workforce protection, supply-chain stabilisation, and financial stress testing. Besides setting up the network of teams, McKinsey urges leaders to foster collaboration and transparency across the network.
One way to achieve this is by distributing authority and sharing information. "In crisis situations, a leader’s instinct might be to consolidate decision-making authority and control information, providing it on a strictly need-to-know basis. Doing the opposite will encourage teams to follow suit," it said.
Another important part of the leader's role is promoting psychological safety so employees can openly discuss ideas, questions and concerns without the fear of repercussions. Doing so allows the network of teams to make sense of the situation and learn how to handle it through healthy debate.
2. Elevating leaders during a crisis
Leaders must be prepared to empower others to direct several aspects of the company's response. This includes giving them the authority to make and implement decisions without requiring approval. According to McKinsey, important function of senior executives is to quickly establish an architecture for decision making, so that accountability is clear and decisions are made by appropriate people at different levels.
That said, it is important that the right people are empowered to make crisis-response decisions. While a group of decision makers will be appointed initially to respond to the crisis, McKinsey said that as the situation evolves, new crisis-response leaders will naturally emerge from the network of teams. Those crisis-response leaders, in particular, will not always be senior executives. While experience is most valuable during routine emergencies, McKinsey said character is of the utmost importance in "novel, landscape scale" crises.
Crisis-response leaders must be able to unify teams behind a single purpose and frame questions for them to investigate.
The best leaders will display the qualities of "deliberate calm" and "bounded optimism". McKinsey explained that deliberate calm is one's ability to "detach from a fraught situation and think clearly about how one will navigate it". It is commonly found in well-grounded individuals who possess humility but not helplesness. As for bounded optimism, it is more effective for leaders to showcase confidence that the organisation will find a way to pull through the crisis, but also exhibit that they recognise the uncertainty of the crisis and have also come to terms with it by collecting more information. "When the crisis has passed, then optimism will be more beneficial and can be far less bounded," McKinsey explained.
3. Decision making amidst uncertainty
Leaders often make the common mistake of waiting for a full set of facts to emerge before deciding on the next steps. As a crisis involves many unknowns and surprises, McKinsey said facts may not become clear within the necessary decision-making time frame. Leaders should not resort to merely using their intuition. Instead, they can better cope with uncertainty by continuously gathering information as the crisis unfolds and observing how effective their responses are.
This means frequently pausing from crisis management, assessing the situation from multiple vantage points, anticipating what may happen next, and then acting.
"The pause-assess-anticipate-act cycle should be ongoing, for it helps leaders maintain a state of deliberate calm and avoid overreacting to new information as it comes in. While some moments during the crisis will call for immediate action, with no time to assess or anticipate, leaders will eventually find occasions to stop, reflect, and think ahead before making further moves," McKinsey said.
It explained that updating and doubting are two cognitive behaviours that can help leaders as they assess and anticipate. Updating involves revising ideas based on new information teams collect and the knowledge they develop. Meanwhile, doubting aids leaders in considering ongoing and potential actions critically, and deciding whether there is a need for the actions to be modified, adopted or discarded.
Upon deciding on a plan of action, leaders need to act with resolve as visible decisiveness not only builds a company's confidence in leaders, but also motivates employees to sustain its search for solutions to the challenges faced.
4. Demonstrating empathy
It is ever more important, during a crisis, for leaders to uphold the need to make a positive difference in people's lives. Doing so requires leaders to acknowledged that personal and professional challenges that employees and their loved ones face during a crisis.
Since each crisis will affect people in particular ways, leaders should pay careful attention to how people are struggling and take corresponding measures to support them.
Besides demonstrating empathy, leaders should also open themselves to empathy from others and pay attention to their own well-being.
"As stress, fatigue, and uncertainty build up during a crisis, leaders might find that their abilities to process information, to remain levelheaded, and to exercise good judgment diminish. They will stand a better chance of countering functional declines if they encourage colleagues to express concern - and heed the warnings they are given. Investing time in their well-being will enable leaders to sustain their effectiveness over the weeks and months that a crisis can entail," McKinsey added.
5. Maintaining transparency
By practising thoughtful, frequent communication, leaders show that they are following the situation and adjusting their responses as they learn more. This helps to reassure stakeholders that they are confronting the crisis. According to McKinsey, leaders should take special care to see that each audience's concerns, questions, and interests are addressed.
Having members of the crisis response team speak first-hand about what they are doing can be particularly effective.
Additionally, communications should not stop once the crisis is over. Instead, leaders should work towards offering an optimistic, realistic outlook as it will have "a powerful effect" on employees and other stakeholders in inspiring them to support the company's recovery.
Digital transformation: How to hit the restart button when you're stuck
Only a third of CEOs understand 'head of design' job, finds McKinsey
Publishers and agencies in Asia tackle brand safety amidst COVID-19
Swipe Play Love: Dating apps adapt and engage to combat isolation
5 ways healthcare brands can respond to COVID-19
7 marketing tactics to navigate the coronavirus crisis