The Covid-19 pandemic is posing unprecedented challenges to the business world. Although every crisis has very specific characteristics linked with the reality of the moment, when tackling challenges in the future, it may be useful to recall lessons learnt from the past.
What can we learn from past crises to face the Covid-19 pandemic? According to Esade experts Pedro Parada and Xavier Mir, part of the answer to this question can be found in the research and personal experiences of Peter Drucker, Daniel Goleman and John Kotter.
Parada and Mir analyse how lessons from the past can be applied to this new crisis in the digital journal Capital Humano, and outline four strategies to help executives overcome the Covid-19 crisis.
1. Crisis management
"The first thing we must do in times of crisis is ask ourselves what to do. The more complicated the problem is, the simpler the solution must be," say Parada and Mir.
To tackle the crisis, the experts recommend turning to Peter Drucker's crisis management lessons and putting the following steps into practice in business management:
- Develop a plan to protect the key assets of the business: personnel, assets, cash, and urgent measures to curb investments and expenses (a zero-based budget is a good tool).
- Define no more than four or five key projects.
- Focus on execution, always communicating the sense of urgency, and demand rigour in execution.
2. Emotional management
The second key step in managing the Covid-19 crisis is related with leadership and emotional management. The style of management in times of crisis plays a fundamental role and can be decisive for the future of the company.
The experts believe that it is at moments of crisis that managers show their true capacities and when all their collaborators need models. They warn that "enormous amounts of empathy and emotional intelligence are needed to keep the organisation aligned, motivated and focused,” and they recommend re-reading what Daniel Goleman has written on the subject of emotional intelligence.
It is also essential, they add, to learn to lead by example: “At times of crisis, it is important to have committed managers who are prepared to show their faces and are available and accessible, although they may be working remotely; they must be relaxed and positive, and provide much-needed guidance.”
At times of crisis, it is important to have committed managers who are prepared to show their faces and are available and accessible
Leadership in times of crisis also demands that managers are mindful of ethical considerations and that they devote particular attention to how workloads and tasks are distributed. According to the experts, all crises demand a sacrifice, which must be balanced out and shared among all the actors, in particular, among the organisation and shareholders. Everyone's efforts are required to overcome the Covid-19 crisis.
Another key strategy for leading in times of crisis is to pay special attention to communication. The experts recommend communicating with all the stakeholders in the organisation through clear and transparent messages that convey confidence and conviction, but these messages must also be honest and realistic. "The emphasis is not on the volume of communication, but on its clarity and quality, without forgetting that communication also requires a lot of listening."
3. Change management
The third strategy for managing the crisis involves reviewing John Kotter's recommendations on change management.
According to the experts, it is vital to reflect on the impact of the crisis on each individual company and its sector, to imagine what tomorrow will be like and what scenarios are anticipated, and to outline a plan for change in three stages with a long-term perspective, thinking in terms of running a 'marathon’ of two or three years, rather than a ‘100 metre sprint’:
- In the short term, it is essential to draw up a plan with the help of Human Resources to recover the human assets of the organisation. The experts warn that "the absence of human contact, working remotely, and all the tensions, sacrifices and uncertainty have damaged what we have painstakingly built up in the past, and so time and effort must now be invested to rebuild and recover the teams of staff."
- In the medium term, managers should develop an action plan that defines what has been learnt from this crisis, pinpointing what changes would be necessary in order to operate successfully in a different scenario. “This crisis has accelerated certain phenomena that are now here to stay, such as digitisation, e-commerce, Industry 4.0, sustainability and the environment, organisational models and intergenerational relations.”
- In the long term, work will have to be done to detect windows of opportunity in the reconfiguration of different sectors. The crisis and the consolidation of change will open up opportunities to forge new strategic alliances, undertake mergers and acquisitions, and promote new spin-offs that will emerge from the weak positions of some competitors.
4. Look after yourself
To complement the three recommendations mentioned above, the experts add a fourth and final recommendation for executives: look after yourself!
Although business management is a profession full of positive aspects that can bring personal fulfilment, crisis situations heighten the risks to executives' physical, mental and emotional health. “At times of crisis, it is very important to pay attention to oneself and devote time to activities that can mitigate these risks.” For example, the authors recommend moderate exercise, watching one's diet, spending time socialising with friends or business networking, and finally, setting aside time for ongoing professional training: there are always areas that can be improved.
“A short-term crisis management plan, a far-reaching emotional management plan for your organisation, a plan for change in which the lessons learnt from this crisis are applied, and a personal plan are the four core ideas we would put forward as a recipe for overcoming this Covid-19 crisis," the authors conclude.
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