It’s a fact of life -- when faced with the unknown, we cling to the familiar.
With COVID-19, businesses have faced more disruption in recent months than they might normally see in years. We’ve vacated our offices, made remote teamwork work, and served consumer bases that have shifted into a quarantine state of mind. Any one of those factors would be plenty to deal with; taken together, they are overwhelming.
As transformational change expert Ron Carucci once wrote in an article for the Harvard Business Review, “During times of disruptive change, all sorts of feelings are heightened -- loss of control, the interruption of power, fear of failure.”
In the face of such disruption and fear, who could blame leaders for wanting to stick with familiar, comfortable processes? The prospect of doing anything else -- of embracing more change in a time of crisis -- seems almost laughable. Aren’t we handling enough? As leaders, do we even have the bandwidth to take on more change? The idea seems to merit a swift dismissal.
But giving up this opportunity for innovation in favor of a (false) sense of security is a poor trade.
When the coronavirus made its first U.S. appearances in March and began necessitating closures and remote working arrangements, there was a pervasive sense that the containment measures would be fleeting. We viewed our remote work arrangements and pro-digital consumer strategies as Band-Aid fixes -- stopgap measures that would tide us over until we could return to normal life.
Months later, we’re beginning to realize that COVID-19 didn’t just spark short-term disruption; it created a new normal.
As writers for McKinsey concluded in a recent report, “The COVID-19 crisis seemingly provides a sudden glimpse into a future world, one in which digital has become central to every interaction, forcing both organizations and individuals further up the adoption curve almost overnight, a world in which digital channels become the primary (and, in some cases, sole) customer-engagement model, and automated processes become a primary driver of productivity -- and the basis of flexible, transparent, and stable supply chains.”
Executive leaders are beginning to realize that waiting for a return to pre-COVID norms won’t work. According to a recent survey of American CFOs conducted by PwC, 63 percent of surveyed leaders plan to make changes to their products and services, 41 percent intend to change their pricing, and 54 percent expect to make remote work a permanent option. Perhaps most notably, almost a third (32 percent) hope to “reinvent their businesses” by transitioning to tech-driven products and services.
COVID-19 has posed incredible challenges to business leaders, yes, but it has also opened a window of opportunity. Before the pandemic, business leaders might have dragged their feet on innovative new services or risky digital transformations, worried that such measures were too far removed from their “normal” offerings. Now, those same forward-thinking initiatives might be what empowers a company to evolve and adapt to a post-COVID, digitally-reliant consumer base.
Embracing change is a clear imperative for business leaders. It’s become all too evident that clinging to familiar processes in the hopes that “normal” life will reassert itself isn’t a productive -- or even viable -- strategy for navigating the crisis. That said, breaking free of those unproductive, anxiety-driven habits may be more complicated than it appears.
Before anything else, business leaders are human. While most laypeople might view companies as mechanical, logic-driven organizations, every business relies on (sometimes flawed) human decision-making -- and are subject to human psychological stresses.
“For business leaders -- accustomed to the luxury of clear facts and options prior to making business decisions -- being forced to make fast, enormously impactful choices based on limited, incomplete, or possibly even erroneous, information is extremely stressful,” researchers for PwC once wrote in a brief on the human side of crisis management.
The researchers note that the burden that crisis leadership imposes can severely impair executive function. The consequences of these constraints include a tendency to mistake assumptions for facts, and unwillingness to make any decisions until “all of the facts are in,” and an inability to look beyond immediate problems to address longer-view concerns.
If leaders don’t acknowledge the psychological factors that lock them into hesitancy and inaction, they will never embrace the change-centric mindset they need to adapt to a post-COVID business landscape. But to do so, they may need to let go of familiar procedures and relax their anxious grip on their organizations.
“A small group of executives at an organization’s highest level cannot collect information or make decisions quickly enough to respond effectively,” McKinsey researchers stressed in a recent whitepaper on leading through COVID-19. “Leaders can better mobilize their organizations by setting clear priorities for the response and empowering others to discover and implement solutions that serve those priorities.”
Rather than attempting to design and implement a poorly-informed strategy by themselves, leaders would be better served by establishing a network of teams.
Each team would be responsible for helping one aspect of the business adapt to the post-pandemic landscape. For example, one group might generate ideas for new, digital-savvy products or services that could complement the organization’s existing offerings. Another might figure out what the business needs to do to support employees through the transition to remote work.
All the while, these disparate teams will report to top leadership, allowing them to build an updated strategy that both proactively seeks out opportunities for innovation and ensures that the organization isn’t overwhelmed by the changes.
It is worth noting that this team-driven approach will challenge traditional corporate hierarchies. As one writer for the above-mentioned McKinsey report cautions, “As the crisis evolves, new crisis-response leaders will naturally emerge in a network-of-teams construct, and those crisis-response leaders won’t always be senior executives.” Leaders must learn how to facilitate productive communication outside of the usual chain of command and accept input from those who aren’t top-level decision-makers.
We are living in a disruptive time. The norms of leadership, organizational operation, and communication have been thrown out the window. We stand at the precipice of a new, pandemic-prompted business landscape, tasked with a deceptively simple challenge -- to adapt, or to adhere to old norms and fail. If they want to thrive in this new, post-COVID world, business leaders need to overcome crisis leadership’s psychological challenges and encourage innovation in their organizations.