BROADENING YOUR PERSPECTIVE ON CRISIS LEADERSHIP
by Martin Reeves
In the midst of the Covid-19 pandemic, the topic of crisis management is at the forefront in business conversations worldwide. This concentration on surviving the immediate crisis is understandable and useful in the short term—it enables us to focus on the immediate, high-stakes issues we are all facing. But with constant urgency and stress comes a narrowing of perspectives and time horizons. This inhibits deeper and broader reflection, which is necessary in responding effectively to the crisis, rebounding from it, and reinventing our businesses after it passes. A return to long-term and broader thinking won’t happen by default. One of the key roles for leaders, now that the initial shock is behind us, is to legitimize and foster a rebroadening of perspectives.
In my role as Chairman of the BCG Henderson Institute, I’ve interacted with hundreds of companies in client roundtables over the past few weeks, and it has struck me that many companies are still stuck in reacting to the immediate crisis. Reaction is only the first stage of a multistage game. The urge to minimize damage will never, for example, result in designing creative strategies to address new needs and shape the emergence of new market segments. To balance crisis management with thinking holistically about the crisis and its aftermath, leaders need to reframe their thinking and action appropriately as each phase unfolds.
A few years ago, I coauthored a book titled Your Strategy Needs a Strategy, which proposed that different situations call not only for different strategies but for different approaches to strategy and problem solving. Specifically, we proposed a strategy palette, comprising five distinct styles of problem solving: classical (plan driven), adaptive (iterative experimentation and adjustment), shaping (coevolution and collaboration), visionary (creative), and renewal (turnaround). Each style requires adopting the right model, tools, metrics, behaviors, and leadership styles to effectively respond to the situation at hand.
In the language of the strategy palette, companies facing Covid-19 need to create temporal ambidexterity: the ability to switch and apply different problem-solving styles over time. First, we need to react urgently and pragmatically to the crisis, using a renewal approach. But after this reactionary phase we need to implement planned measures to manage cash burn in the now inevitable economic downturn, using a classical style. As the disease and the economic aftermath develop unpredictably, we need to learn rapidly about the latest developments and flex our tactics accordingly, using an adaptive style. Every crisis contains opportunity, and once the acute phase of the disease is controlled and the economic aftermath managed, we will need to think about capturing opportunities in the new post-Covid reality, using visionary and shaping styles.
This broadening of how we think about and manage the crisis (and the opportunity) will need to take place at multiple levels: the individual, the company, the industry, the country, and the globe. The unprecedented nature of this “Great Pause” means that few companies and managers will have experienced such a rapid succession of problem-solving styles. It is therefore very encouraging to see HBR mobilizing with extraordinary speed to help leaders and managers by promptly compiling this book of broader perspectives on managing the crisis, the recovery, and the post-Covid era. This collection will help leaders who are learning on the fly understand what moves they need to make to ensure that their enterprises not only endure but flourish through the major discontinuity we are living through.
The first section, “Leading Your Business,” covers the key leadership behaviors needed in a crisis. It takes a high-level view of the legal risks around Covid-19 that no company must overlook, then explores how we can take inspiration from history’s greatest leaders in the most challenging moments.
Next, the “Managing Your Workforce” section acknowledges that while the initial shock of remote work has worn off for many, bolstering a culture of innovation, keeping remote workers engaged, and having difficult conversations (including, unfortunately, informing employees about layoffs) remain challenging. It looks at how the best retailers are keeping their employees safe and gives guidance on actions to take when one of your employees tests positive for Covid-19.
The “Managing Yourself” section addresses how we can deal individually with a society-wide emergency. It has never been clearer that work life, personal life, physical health, and mental health are more closely intertwined than many businesses previously acknowledged. These chapters address important topics like how to avoid burnout and how to manage stress in dire times, and they help us understand how to find meaning in our collective grief.
The final section, “Seeing Beyond the Crisis,” brings forward the kind of thinking that will be needed to adopt the visionary and shaping strategies to revitalize and reinvent your business for eventual recovery. It helps readers consider how the economic recovery from coronavirus might unfold over time, looks closely at how you can ensure that your customer relationships outlast the pandemic, and speculates on how the landscape of labor laws and practices may be permanently reoriented. Finally, it encourages businesses to cultivate the culture of imagination necessary to build a successful future.
This is a moment when great leaders and businesses will rise to the occasion. As Nancy Koehn shows in her contribution to this collection, leadership is often forged in crises. Leaders become “real” in difficult times, not only when they steel people with resolve and purpose but also when they inspire people to experiment and learn through the crisis, turning adversity into opportunity.