The Covid 19 crisis has severely challenged the entire world and continues to do so. But it is only perhaps in the last couple of weeks that people are beginning to realise the enormous social and economic impact it will have on us all. It is widely predicted that the Covid crisis will herald a new global restructuring of the economic order. Capital Economics have estimated that the world will suffer a 15% drop in output whilst other research groups have suggested the figure could be as high as 20%. The prospect of a deep global recession is extremely acute with the evaporation of global trade and consumer spending. There is no doubt that we are facing un-precedented times.
Despite the gloom and pessimism, we know the business world will survive and move forward. The critical question for those of us who operate in large organisations is how will our business models cope with the fall out the crisis? Covid 19 has clearly tested every business model on the planet and exposed many failings in our organisation structures, people management, systems and processes. Over long and stretched supply chains have been regularly featured as a failure during the crisis and seem an obvious agenda item for any Covid review. There will of course be many other to follow in the coming year.
Challenging conversations at all levels
The fact is that to emerge from the crisis successfully, leaders are going to have to engage in very difficult and challenging conversations at all levels. It is already clear with the announcement of severe job cuts in some businesses and sectors that difficult conversations are already taking place. The relentless agenda of financial survival is already driving classic cost cutting to reshape and right size businesses to restore some form of equilibrium. The extremely delicate nature of some businesses means their sheer lack of cash leaves them with no alternative but to cut cost. These companies; often referred to as zombie companies, have for a very long time been primarily maintained by abundant sources of cheap debt. By definition these businesses lack any kind of organisational resilience. Many will sadly fail to emerge from this crisis.
But for many other businesses, is the default “slash and burn,” cost cutting agenda the only conversation to have? Has not the Covid crisis, challenged us to have deeper and more powerful conversations about how to organise our world of work moving forward?
Despite years of corporate resistance, the crisis has taught us almost overnight that home working is perfectly suited to hundreds of thousands of workers who endure often difficult and stressful daily commutes into large cities around the world. The crisis has shown that it is possible to break down traditional functional silos and fiefdoms across functions and even competitors within weeks rather than years. We have learnt that some businesses have been able to set up different customer service offers at breakneck speed in contrast to the usual prolonged phases of prototype modelling and testing. The crisis has shown that it is also possible for people to change roles and collaborate in dramatic and extraordinary ways.
In many corporate cultures powerful and difficult conversations are not encouraged
The potential learning, this dreadful crisis is providing, gives leaders a unique opportunity to engage in deeply powerful conversations at all levels of their organisations. It’s a once in a generation opportunity, to fundamentally review of all aspects of the business model. It’s a major reset button for those leaders who want to rise to the challenge. But of course, we know that in many corporate cultures powerful and difficult conversations are not encouraged. There is a frequent belief that you have to follow the leader and not rock the boat. Management teams are often riddled with an absence of trust which in turn leads to a fear of conflict; such that difficult issues are side-stepped. Sensitive and important issues are consequently discussed in the corridors or “safe” side meetings for fear of upsetting the accepted and politically acceptable line of thinking.
There are far too many corporate meetings where people don’t speak up when they know something being said is simply “crazy!” We all know of organisations where the sheer complexity of the organisation inhibits faster progress. We have all experienced organisations where too much time and effort is spent focusing on the wrong things. Covid showed us almost overnight what organisations really need to be spending time on – the customer!
We also know of organisations where you have to talk to far too many people to get anything done. Conversely, there are many organisations where the prevailing culture is one of “being nice” and “friendly,” so again defective behaviours or practices are left unaddressed for fear of breaching the accepted norms. It all results in what my colleague, James Mcleod, readily describes as an “acceptance of the ordinary” culture; whereby performance drops to the lowest common denominator rather than being constantly challenged and so driven upwards.
The above are not unusual observations but collectively they lead us to make less than optimum choices and decisions in organisations. It is also worth pointing out that customers also experience many of these failings. A simple change in my telecoms billing during this crisis led me to engage in thirteen separate telephone conversations over a two hour period!! Suffice to say this company is often cited as one of the worst customer focused businesses around. PS it only survives because it has a strong “monopolistic” position – so I have to wait while they get organised to answer my query as a customer!
Daring to challenge
So, when all is set against the potentially deep learning the crisis provides, the need for leaders to pursue powerful conversations is an absolute must. It is only by provoking powerful conversations that organisations will emerge stronger and more resilient from the crisis. Leaders need to make the act of “daring to challenge” an organisational norm. They need to find appropriate ways to enable people to ask the right questions. Harnessing people at all levels will be critical; it’s not just the existing leadership who should be involved in the conversations. On one level the questions are relatively straightforward:
- What aspects of our business model added real value during the crisis?
- What aspects of our model didn’t add value? We managed well and without any negative impact!
- As a business what can we do faster, quicker and less expensively as a result of the crisis?
- What did we discover to be our “essential” and “pointless” activities and jobs?
However, the answers to such questions will no doubt lead to deeper and more powerful conversations that potentially challenge the existing business model and organisation. The question of structures, functions, processes, management layers and roles all come into play.
Setting the right context and ground rules
Leaders will need to be skilled in setting the right context and ground-rules for such conversations, particularly when many will be set against the context of extremely demanding financial pressures. They will quickly need to create an agenda where every aspect of the existing business model can be raised and challenged.
Leaders will need to be alert to the time served political strategies and games of experienced leaders and managers defending their own domains. They will need to cut through dysfunctional norms that have in the past stifled real and open debate on the business model; opening up productive and insightful conversations involving people in the organisation’s engine room. Capturing the experiences of those employees who fought during the “crisis war” will be key to realising future success. Placing such people at the centre of conversations and not at the margins will allow for real learning about potential future success. It is of course the same people who will be central in moving the organisation forward; their future engagement will be as critical as their engagement was during the crisis.
Indeed, perhaps one of the most challenging questions for organisations to emerge from this crisis is ‘what is the future of management in our business?”
Organisational resilience for future and sustainable success
Prudent and effective financial disciplines will need to be put in place to cope with the immediate short-term pressures, but leaders will also need to look to the agenda of organisational resilience for future and sustainable success. Re-energising and re-engaging people at all levels will be a huge leadership challenge. Time will be of the essence, so the question is are your leaders able to rise to the challenge?
Mark Thomas is a lead facilitator at PPI and regularly assists leadership groups in having powerful conversations across a wide range of issues.