Coronavirus has created a pandemic-induced global economic crisis worse than the Great Depression of 2007-08. At the start of the year, the IMF pegged the global growth rate at 3 percent. Two months into the crisis, it revised the rate to negative (-)3. Even beyond the global growth and shrinkage, Coronavirus has the potential to damage domestic economies. Governments across the world are kicking different strategies into place to combat the virus and the crisis they know is already here, or will ensue. A research study by the Chicago Booth discussed how this economic slowdown has adversely affected inequality rates, quality of education, and mortality rates, and the strategy that policymakers should employ.
One strategy to restart the economy that governments across the world are employing is to offer stimulus packages that are aimed at reviving the domestic economy which is poised to hit a growth of negative (-)4.9%, 1.9 percentage points down from April 2020 forecast. Indian government offered a stimulus package to the tune of 263 billion dollars. Globally, IMF is collaborating with the governments to outline fiscal policies amounting to 8 trillion dollars.
This pandemic-induced crisis has taken every business on a steep learning curve. It forced several companies to lay off their employees and others to reconsider certain roles in the organization. Strategy and communication lines were the first to get affected because organizations had to adapt on their feet to keep the business afloat and retain valuable talent to weather the storm.
We conducted a study where we asked industry leaders and middle-management professionals five questions to understand their opinion of the crisis and what lessons the organizations have learnt from the crisis, especially as the global economies are starting to re-open slowly. These questions focus on the strategy and leadership that management is expected to employ to ride the tide.
Click on the questions to read more about them
Staying true to the vision statement
Choosing between people and process
Approaching the stress of strategy making
Replacing watercooler talks for productivity
Handling disgruntlement after pay cuts
All the answers mentioned here are extrapolations and gists of the leaders’ responses. Most of them have maintained that the answers were their personal opinions and didn’t necessarily reflect the views of their organization. To maintain anonymity, we’ve decided to omit mentioning the organizations they work with.
How would you maintain the ‘vision’ statement of the organization in times of pandemic and make sure your possibly-disgruntled employees are still aligned with it?
The general answer here was that vision statements aren’t necessarily affected by this crisis. For that matter, according to them, a vision statement is rarely affected by any crisis. COVID19 pandemic-induced economic crisis is the same. The answers given by the leaders about the vision statement can be looked at from three different perspectives.
Duration
“A vision statement is a long-term approach and isn’t affected by short-term fluctuations,” says Mr. Pavan, a CEO in the private sector. Anshul, the founder of WittyPen, corroborates this view. He says, “An organization plans its strategy from both short term and long term perspectives. In the short term, we just move towards achieving it.”
In general, since a vision statement is a constant pursuit of where an organization wants to be and staying there once it’s close, organizations don’t have to worry about their vision statement.
As Asish, a Manager with a credit management company, said, “A vision statement is like an all-terrain vehicle.” In uncertain times like those created by a pandemic, that vision statement will be useful because it will act as the direction that the management and the employes alike use for deciding where they need to go even if they have to take a roundabout way to get there.
Focus
Anshul said that the focus during these times would be on sustainability. Organizations will focus on staying afloat because the longer you stay alive, the more confident you are that you will bounce back. As Ritu, an Associate Director, states, “In any crisis, organizations focus on being resilient — from financial, operational, and commercial resilience.”
Intent
The approach to a vision statement in the short term will keep changing due to the crisis. As Ra (name changed), an Assistant Manager in L&D, says, “You can’t have a generic vision statement and expect people to follow it blindly. You need to be able to compromise and make room for errors.” As he states, “the vision statement is decided by someone else and how it trickles down the lines is decided by someone else.”
Ratna Sri, a project manager in a cloud-based IT services company, corroborates this view. She says, “The broad policies of an organization should enable employees to contribute irrespective of where they are.”
As for the employee disgruntlement part of the question, everyone said the same thing — there are no two ways about it. A recovery strategy can’t be created if it has to consider every ounce of disgruntlement that will arise. Employees must handle it on their own. Pavan said that individual disgruntlement could stem from several personal reasons too, and necessarily from the strategy itself. However, the same leaders also said that management can help control the disgruntlement. An integral part of the people strategy during these times is to mitigate the unrest from that disgruntlement if you can communicate well.
Lessons after Pandemic: People first or Process/business first? How would you draw the line?
To survive the crisis that continues to batter organizations, the processes that surround human resources have to be modified to ensure the business’ survival. So, when we asked if the companies would choose people first or process first, the answer seemed unanimous: people. The reasons offered, on the other hand, that organizations would choose people differed.
Pavan put it concisely when he said that mature organizations don’t have that conflict because processes in an organization are built around people aspects. In scaled organizations, processes will be supreme because they are created after a lot of consideration. Human resources align with the process, and good leaders make sure they stay aligned. However, if it is the question of choosing between discharging duty and being affected arises, people will always come first. Anshul agreed with the view and said that people would always come first because businesses wouldn’t exist otherwise.
For less mature organizations, two managers in client-facing verticals, Asish, and Surya (name changed), with the HR recruitment vertical, said that there is no perfect formula. According to them, it depends on the environment you give your team to maximize their efficiency. Rahul also said that this crisis acted as a mirror to organizations’ true selves because it made them evaluate their people policies. This crisis has changed how organizations fundamentally engage with their employees on a day-to-day basis.
How would you manage the stress of strategy, knowing every decision you take can impact the lives of many?
The number of CEOs we interviewed was smaller compared to the Directors, Associate Directors, and Managers we interviewed. Across all of them, the answer was simple — experience.
To paraphrase: As individuals start having greater responsibility and as they become the custodians of the many, they are expected to do things better — do the right things at the right time. However, there is failure inherent in strategy making. As all of them said, all organizations deal with bad strategy implementation and strategy execution at some point. The higher the professionals are in the hierarchy, the more will be the responsibility they take on. As far as the stress is concerned, all of them had only one thing to say — some people can handle situations better than others.
Things like watercooler talks improve productivity among employees. How would organizations replace that?
This question goes beyond productivity to pore over the results after companies attain normalcy. As Ritu says about working from home, “A lot of employees don’t know what’s happening outside their organization. We can expect high attrition rates after the crisis ends.” Anshul and Pavan said that most organizations are moving towards a hybrid work culture to keep social interaction between colleagues alive.
There is no set way for things to operate as far as steps to improve productivity are concerned. Organizations are learning as they move along. To what companies should do, Rahul and Ratna Sri had the same idea — organizations should take the initiative to make sure employees stay connected. However, they had different opinions when it came to why they should do that.
According to Rahul, with everything virtual, employees themselves make an effort to stay connected with their peers or friends. So that’s not really a concern. The concern is how people’s opinions on productivity change while working from home. Employees are already working more hours. Organizations should stop micromanaging employees’ productivity. They should give employees some time to come to terms with it. One way that organizations can do that is to provide employees a room for voicing their opinions. It is a mixture of micro-level decisions that tend to trickle upwards. Learn to trust employees even if selectively.
Ratna Sri believed that connects serve more than to make people stay in touch. Organizations are starting to realize, as they climb the steep curve, that motivation and productivity aren’t dependent on just ‘pinging’ people. Teams are beginning to understand the importance of making people stay in touch. Employees are making an effort to socialize by themselves. However, when it comes to socializing with stranger-colleagues, if an organization structures the connects well, there is an excellent chance for interactions with random colleagues as well.
Pay cuts are inevitable. When they happen, most employees are going to be demotivated and disgruntled, especially if they have to work the same amount. How should organizations handle that?
Arne Sorenson, Mariott International’s CEO in a video, gave a speech that is considered an example of great leadership. Everyone we’ve interviewed said that the key to mitigating disgruntlement is good communication. However, executing a good communication plan requires strategic planning as well. Everyone talked about the need for leaders to be transparent. Some opined that transparency should go beyond describing the current situation. They said that leaders should talk about budgets, revenues, and clients they’ve lost or didn’t clinch. When the numbers change, leaders should communicate with the employees honestly. The strategy is simple: Honesty
Giving employees the feeling that the organization is with them in times of crisis is crucial. Rahul and Surya presented alternatives: They said that since not all verticals can expect similar amounts of work, organizations can ask the employees to take a no-pay holiday until the crisis sorts itself out. In his opinion, ‘the fact that there are pay cuts means that there isn’t enough work‘. At the end of the day, how you communicate is more important than what you communicate.
According to Madhu (name changed), a manager with a reputed consulting firm, the context behind the decision is essential. If the employees understand that the leaders are walking the talk, the disgruntlement could be mitigated. Therefore, implementing the decision to cut pay requires voluminous communication. The criteria for such cuts and why those employees have been chosen should be made transparent.
Conclusion
Airbnb’s CEO, Brian Chesky, sent a message to all Airbnb stakeholders. It is largely considered a great example of leadership communication. Every thought leadership article written on strategy and leadership talks about the importance of communication to ensure everyone is on board. As the crisis unfolds, the full scale of the effects on businesses will show. Until then, we can only do our best to weather the storm.