How a strong Crisis Response sets the stage for a winning Business Restart.
by Peter Classen
Part 1 Highlights:
If you want to know which businesses in Europe, the United States, and in any country for that matter, are going to have the best RESTARTS, you need only find the businesses that have had the best RESPONSES to the COVID-19 pandemic. What we need to understand is that the best RESTARTS are a product of the best RESPONSES. They are inextricably linked and should not be approached as separate undertakings, worked on by different teams.
The best restarts had employees on their side. They ensured employees remained on the job (and loyalty) by solving the most critical employee problems during the heights of crisis - not just talking about those problems or showing empathy without taking action.
The best restarts gave employees structure and direction and reminded them of their purpose. They set the agenda and provided tasks that were aspirational yet attainable under the circumstances. The companies that will have the easiest restarts are those that have empowered employees to take charge on their own; see a problem, solve a problem.
Today, companies need to do their utmost to help employees believe, have hope, and to not lose faith. Though these words sound soft for most leaders in Corporate America, think of this: Can you have a successful restart if employees have lost their belief in the company, feel no hope, and have no faith in the future?
“UNACCEPTABLE!” he bellowed as his two open hands slammed down on the long conference table sending a shock wave through the wood-paneled conference room. The one working phone in the building bounced at the center of the table, and the glasses of water tremored and showed ripples. There was no dust to settle, only the shocked and appalled faces of senior executives looking back at him. In this country and in this culture, where Frank (name changed) was working, such an outburst would not be tolerated, even in children. Such an impolite, irreverent outburst from a business professional would virtually constitute the grounds of “termination for cause”. Frank, with only three weeks at the firm, knew this, but he had reached his breaking point. To him, what he was witnessing was wholly and completely unacceptable.
Fate had dealt a strange hand. On his start-day three weeks earlier, the protests across the country had been gaining momentum, but the revolution hadn’t fully begun. That took another week. Then the government shut the banks. Then the local cell and local land-line phone services shuttered. Finally came the proclamation of martial law, and with that, a complete lockdown of the country.
The police gave up and for the most part, sided with, or at least chose not to oppose, the revolutionaries. The army protected its own and focused on its political opportunities. Without civil protections and the rule of law, looting was rampant - food security was an issue - and citizens were forming militias to protect themselves. With the lockdown came the inability to communicate, and the collapse of banking infrastructure. For those who worked with western companies, their largely debit-card based lifestyles were failing. No ATMs meant no cash, no cash meant no food - and it had already been two weeks. The country and economy had almost come to a complete stand-still. The employees where Frank worked, all 8,500 of them, were hungry.
What set off Frank was the runner-delivered note from the CFO just before the morning call with the Owner-Chairman (luckily, Frank had the one working AT&T cell phone). The note read a very curt, “Unable to come into the office anymore, must take care of mother.”
As Frank now more calmly explained, this was going to be a problem. What about the 8,500 people who work for us? What about their mothers and fathers? No one had solved the salary payment problem. No one seemed to be thinking that beyond the 8,500 were probably another 26,000 hungry, scared people - husbands, wives, sons, daughters, parents - all of whom relied on the salary we were supposed to deliver and all of whom were fretting over what the company was going to do. No one had yet figured out the plan to protect the $2.1 billion USD in facilities investment that the company had in-country. Solve the salary payment problem damn it, it’s your job, your duty, and if we don’t do this now, there will be nothing left.
Frank stopped explaining. The conversation shifted, and the Owner-Chairman on the phone spoke in his native tongue to the executive team around the table. Frank never felt more like an outsider in his life. The Chairmans’ tone was clear, calm, but commanding even though Frank didn’t have a clue as to what was being said. He felt a tinge of regret for his outburst, but he also knew that the company’s response to this national crisis had been woefully inadequate. Now with no progress towards paying salaries after two weeks, the response was just plain wrong. The Chairman ended what he was saying to his executives, most eyes around the table looked down. “Frank,” the Chairman said in English, “You’re in charge. What do you need?”
About an hour later, priorities had been laid out and an agenda was set. In three days, cash started arriving in-country, being run in by private boat from across the border under the protection of darkness and with quickly arranged protections. Frank and a team met them at the jetty. An entirely manual system - resembling something from management playbooks of the 1860s - had been stood up. The company would ensure cash to give all employees enough to buy food, medicine, and other essentials for themselves and their loved ones. Two days later, communications equipment arrived. Not much, but enough to establish single comms lines between the 38 different operating locations spread across the country. IT sure had its hands full, but now they had a system to build and maintain, so they were motivated and hopeful again.
It wasn’t more than a couple of days after cash started flowing that the concern regarding security and protection of the assets disappeared. Reports from the new radio system stated that employees were reporting in and that something odd was happening. Some of the employees brought their sons, their dads, or their able-bodied relatives. They came to contribute, to protect, to do whatever needed to be done. HR’s analysis was clear: They were coming to help. They felt that was the right thing to do. This company cares, it got us our salaries, so there is no way my family or I are going to let the company suffer or fail. As soon as they heard this report, Frank and everyone else knew the business would not be destroyed. It had a future.
Things weren’t easy over the coming weeks, and many unanticipated hurdles got in the way of managing the crisis. Frank had to hide-out on the 12th floor of an apartment building under construction. If he had to come out for a meeting, he was made to wear a disguise that made him look, and smell, like a homeless beggar. The response trends in the company were, however, almost always positive. Employees became self-organizing with young leaders proving very keen and able (they didn’t have a long list of family obligations at home). Problem-solving started to happen at the problem source, well before it grew into a larger issue that would distract the leadership team. These young problem-solvers were rewarded, and their positive attitude became contagious. Those that could lead, led well, and those that could follow, followed well. As the nation’s military stepped in and a transitional government was put in place, security and the rule of law returned. A quick audit revealed the loss of company property and equipment had been surprisingly negligible, though yes, the revenue side had been driven to zero and a complete re-capitalization would be required. In the coming months, employee loyalty skyrocketed. Stories of the company’s actions travelled around the industry and in the local communities. It felt as if the company had become the employer of choice for literally tens of thousands as unsolicited job applications arrived in the hundreds per day. Revenue started to come back after about seven months; way earlier than most. Though it did take years for revenues to return to post-revolution levels, the return to normal (aka the business restart) was a significant magnitude easier than what others faced.
Employees made it happen, and many of the young managers became champions of the restart, rising quickly to take on important front-line, market-facing positions. To this day, almost a decade later, no one who was there during the revolution has forgotten what the company did for its employees. Though the Chairman-Owner has passed away, and most of the leadership has turned over, the reputation that was earned will forever be part of the company’s corporate narrative.
What we need to understand is that the best RESTARTS are a product of the best RESPONSES.
That was an interesting story. What can we learn from it? The actions read like a textbook on how to lead in times of crisis and challenge. Does it work like that in the real world? According to Frank though, it sure didn’t feel like “textbook” at the time. “I don’t wish this on [any executive leader], but you need to know that there may come a time when everything is going to fall apart, and you could very well say, it’s over.”
“This is where the business ends. Now you can either accept that or you can get to work. That’s the choice. You begin. You work the problem right in front of you. You figure it out. You solve it, and then you move on to the next problem, and then the next, and then the next. And if you solve enough problems, the business survives.”
RESTARTING from the COVID-19 Economic Shutdown
Thinking of today, the hottest question of the week (week 9 of the lockdown) seems to be how do I restart? In this article the authors will break down their experiences and their thinking, to create a “how to” approach for restarting. Like with previous articles, we won’t suggest a one-size-fits-all. Neither will we spend much time on mindsets and thinking that cannot be put into immediate action, because - from our humble perspectives - if you aren’t solving problems right now if you haven’t put your people first, your restart is not going to be easy.
The Restart started with making them feel safe.
Had the employees from our story been left to fend for themselves, without salary and without cash, the company probably would have survived for a time, but certainly could not have rebounded well. The solving of the cash problem empowered them. It took care of their biggest problem. It allowed them to feel less nervous, to regain their wits, to get some sleep and not worry if they could feed their children.
Give employees a purpose.
Taking care of their families was everyone’s first priority. After that, protecting the company, the one who helped them most with cash in their time of need, became a natural priority. Business as usual was impossible, so they needed a new job. The new purpose was to protect the assets of the company: its facilities, its grounds, and its equipment.
Give employees a reason to act.
Though good communications - relayed in most instances by short, read-aloud letters or conveyed over a single radio - the owners and the bosses showed that if they help protect, there will be a cash-paid allowance. The promise of cash (first proven by the delivery of cash) gave employees a reason to fight to protect the company.
Make employees feel like cared for and part of a family.
Many North American companies may have trouble with this idea, yet unless the company creates an emotional bond and is a major contributor to employee’s safety and purpose, it will be difficult to implement any meaningful restart program. Consider this scenario: Company: “Hey everyone, it’s time to restart.” What’s the likely answer of an employee who has not been cared for? “Hum... What do you want?” all the while thinking “Why should I risk anything for them?” Now, what is the likely answer from an employee whose company did the most it possibly could have during the COVID-19 crisis? “Sure, what do you need me to do?”
Empower employees to self-start and solve problems
In the current situation, there are going to be so many problems that management will be overwhelmed. It’s simply the nature of the situation. Truth be told, systems for granting approval were just not in place, as communications did not exist for some time. Those who could solve problems did so. They emerged as natural leaders. By having just a small portion of the workforce begin to solve crisis operating problems without management intervention, the demands on operations declined markedly (thus allowing operating executives to focus on challenges that were unique to the current situation). Management bandwidth grew by at least 30%, maybe even 40%, as a consequence.
Accept that some may not survive, especially the unfit and unwilling leaders
It is often said, “uneasy lies the head that wears the crown.” For those who had wanted the “glamour and power of being in-charge” but did not want to accept the “responsibilities and demands of being in-charge,” their time at the company after the crisis waned was short. Employees were ruthless in their assessment of who had been on their side and who hadn’t. With their increased sense of empowerment and new young leaders offering strong inspiration, the tolerance for fear tactics and bullies dropped. Some leaders were lucky - though they lacked the necessary perspective, knowledge, or life experiences to solve the biggest challenges - their positive mindset and their willingness to lead “response” implementations and “restart planned” was valuable and rewarded.
Truly the foundations of this company’s strong RESTART were built during a highly-effective RESPONSE period that put PEOPLE first.
Summary: What leadership did well to set up the RESTART
Protected the human capital. Ensured employees' availability (and loyalty) by solving the most critical employee problems - not just talking about those problems or just showing empathy.
Gave the employees a new and clear purpose. Setting a new agenda. Giving them jobs they could do then and there given the circumstances.
Empowered employees to take charge on their own; see a problem, solve a problem.
Helped them believe, have hope, and faith. Though these words sound soft for most leaders in Corporate America, think of this: what would any restart be like if employees have lost their belief in the company, feel no hope, and no faith in the future?
Showed employees the path to the future beyond the crisis. Helped them understand that this crisis would pass and that the company and their jobs would survive.
About the Authors:
Peter R. Classen is a Chief Transformation Officer, crisis navigator and a speaker-author on “leadership in challenging, high-stress, and uncertain business environments.” As relevant to the RESTART conversation, he chaired for almost five years a multinational steering committee that built a playbook for governments to better manage Post-Disaster Reconstruction Programs. The work of his committee and the development team is in use in more than 25 countries around the globe. Over the past two and a half decades he has helped ~35 organizations respond, restart, and recover from disasters. Find Peter, our partners, and our teams at www.grahampton.com.