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ArcelorMittal won applause for guaranteeing people’s safety during the 2014-15 Ebola outbreak in Liberia and for maintaining the iron ore production of the steelmaker. He has asked veterans of that West African crisis to report their reaction to the coronavirus, from Luxembourg to the United States. However, the road ahead is still largely unexplored. At times, the group simply had to “take a leap of faith and say” we move forward, “” says Bart Wille, head of human resources at ArcelorMittal, about the prompt response to the pandemic.
Managers are now entering a new phase as some Asian and European economies cautiously emerge from the blockade. The consequences of decisions already made, at both the corporate and government levels, should be clarified, but the dilemmas facing executives are possibly more complex. They should consider to what extent to relax the grip that some have exerted on decision making; which of many ad hoc solutions to the crisis to preserve; how to take advantage of potential opportunities that lie ahead; and, in some cases, if the company has a future at all.
Some common themes tie together how leaders and managers have responded to the crisis thus far.
One is the speed with which companies had to react. Some with operations in China had a sneak preview of what was to come. Still, they were forced to speed up and simplify decision making on the go.
Glen Walter, president of North America, for Mondelez, the snack maker, said the group started by allowing existing teams to take additional responsibility for dealing with the crisis. “It was clear within 48 hours that this was different,” he says now. “If we asked our supply chain leaders to take care of people’s safety, government protocols, etc., they would feel overwhelmed.”
Mondelez created a “framework that allowed a smaller core group to strategically identify a much smaller set of priorities.” . . so that the organization’s leaders can move quickly and agilely. ”
Walter also divided the leadership group of the United States. A part of his team handled the safety of people and related issues; Another explored how to handle the increased demand for Mondelez products, including hiring more than 1,000 people as temporary labor and branding and pivoting advertising to adapt to the new situation.
“No matter what we do here, there will be criticism,” he said to his colleagues, “but I will be wrong on the side of completely repositioning ourselves.”
Serco, the outsourcing group, faced a similar challenge. Some areas of his business, such as managing leisure centers in the UK or managing driver’s licenses in Canada, closed entirely. Others, especially the supply of cleaning products to overloaded hospitals, faced extraordinary new pressures.
The company has reduced the time it takes to employ people from five weeks to less than three. It has also redeployed staff across areas of its business: Some 500-600 people were transferred from leisure companies to support the contract to provide Covid-19 test facilities.
Rupert Soames de Serco: “What we have to get used to is having a situation in which everyone has some kind of conflict in their private life” © Anna Gordon / FT
Rupert Soames, executive director of Serco, says the most stressful moment was when staff, sick or forced to isolate themselves, stopped showing up for work. “When the non-filing rate started to rise and went to the 25 percent mark in healthcare companies, [I was] wondering where that would stop, because if it had gone north of 30 percent, we wouldn’t have been able to cope, “he says.
Serco has also been attacked for alleged flaws in the operation of the test system. “The pinch point changes every day,” says Mr. Soames.
Struggling to stay open
Other businesses struggled to stay open as mandatory government blockades went into effect. John Roberts, founder and CEO of AO.com, the UK’s online retailer of white goods, says: “The first messages from the government were mixed – that created concern for people. He was working his way through that while trying to keep the working wheels on. ”
At one point, he found himself arguing with a UK government official who was not convinced that AO.com provided an essential service. “Can you imagine turning off the national [electricity] Grid? “Roberts asked the official, who replied,” That would be ridiculous! “” Well, what the hell do you think electricity works? “He replied. AO.com delivery trucks could stay on the road.
Executives have also had to think about the rate at which they close their businesses, or whether they close at all.
“What is different is that we are close to entire sectors,” says Miles Roberts, CEO of packaging manufacturer DS Smith. “It is not just a recession. It is out of people’s control: [we see] the powerlessness of government and society to deal with this. ”
Standard Industries, which has a large residential roofing business in the US The US, opted for a “hot” shutdown, suspended staff for just two weeks and maintained its facilities in the US. USA Ready to reopen. Since then, he has decided to restore 80 percent of the reduced workforce and restart production. “The demand stayed longer than people would have expected,” says David Winter, co-CEO. “Others overlooked and then struggled to get [workers and production] support for.”
Still, Mr. Winter says he found it extremely difficult to make decisions that juggled the future of the company and the well-being of workers. There comes a point, however, “where you have to make difficult decisions. Everyone wants to be compassionate. . . but you have to have a healthy company that comes out the other side. “
Understanding worker requirements, and the pressures on them, has become even more difficult for managers due to the imperative that almost everyone work outside the office. Even in good times, high-level teams are not in touch with the reality of their workforce conditions, says David D’Souza, membership director for CIPD, the UK human resources association.
“If you are the CEO of a large organization, you are probably not managing work from a perched laptop,” he says. Those with roommates and babysitters who stay home may not understand the challenge of those who have to combine work with childcare. So the narrative spread by top executives that everyone has made the transition to the task smoothly doesn’t match reality, he says. “There is a high level of stress and some people are really struggling, while worrying about jobs.”
Mr. Soames de Serco says: “What we have to get used to is having a situation where everyone has some kind of conflict in their private life, while running a business at 90 miles per hour.”
Strong culture matters
Leaders emphasize the importance of a strong culture. Jill Ader, president of Egon Zehnder, the executive search group, says: “If leaders had not relied on their firm values before, they will not be now.”
Jill Ader of Egon Zehnder believes that innovation departments will have to redefine themselves as it becomes clearer how solutions to crisis problems were generated in all organizations © Anna Gordon / FT
Egon Zehnder’s board of directors and executives reviewed the company’s principles when the crisis hit and wondered “what would keep us strong and grounded and focused in the months ahead and how we can get out of this with our heads held high, knowing we take the right decision”. as bad as it gets?
A clear conclusion, helped by the fact that the group has no external shareholders and entered into crisis in good financial health, was that Egon Zehnder would not cause anyone to be fired. “Ethically we believe it is correct,” says Ms. Ader. “If you fire someone, they will not receive [another] job.”
Providing “psychological security” for staff is an investment in the future, she says. “If we lose confidence. . . we have, it will take years to get it back. “
Existing management teams have vastly increased the frequency of interactions, with the help of online tools. ArcelorMittal’s global management team, led by CEO Lakshmi Mittal, used to meet four times a year and now meets three times a week. His Covi-19 task force, including Liberian executives, spoke every day until the end of April.
The crisis has pressured leaders to take the reins, in a top-down style that is out of fashion during the quieter times. Mr. Roberts of AO.com says: “People look at leaders [and ask] “What is the plan, Stan?”, He adds, he is “very practical, but only from an insight and orientation point of view, not a” do “point of view.
Balance is difficult to achieve. If leaders try and retain too much control, or avoid decision-making, they cause bottlenecks and delay response, says McKenzie Lloyd-Smith of Cass Business School. He has written a forthcoming article in BMJ Leader, the clinical outlet for the British Medical Journal, which discusses the redistribution of the healthcare experience in the pandemic. “Leaders benefit from loosening control during crises, allowing staff to respond creatively and intuitively to an uncertain and unfamiliar situation,” he says.
Mr. Soames de Serco has always operated a “loose” system, delegating local decisions to the 150-200 managers of Serco’s 500 contracts. Soames, Winston Churchill’s grandson, set a bulldog tone from the start in video messages for staff, emphasizing his role in maintaining vital public services. He says he told managers that correcting this crisis was “the most important thing you will do in your work life.” . . You need to rise to the level of events and all these things that you think you are good at: now you have a chance to prove it. ”
In Mondelez, USA. In the US, Walter says he is trying to get comments from his direct reports on whether his style is getting tough by clearly signaling his intentions. He says to them, “This is what this [new framework] it is designed to do and this is what it is not designed for. [If] my definition of a framework feels oppressive and very hierarchical, you need to check us out. “
Whats Next?
As the blockade begins to ease, CEOs and managers also begin to think about how to manage the aftermath of the acute phase of the pandemic. One difficulty is evaluating the relative contributions of managers and staff.
While it’s easy enough for managers to understand where the gaps in staffing are in the retail or manufacturing sector, this is much more difficult in the knowledge job. With so many job and permit losses, Mr. D’Souza of the CIPD says the “people run over” trend [about] what they are doing “is high.
Joe Cainey, director of data science at Peakon, which measures engagement, says anonymous polls during the crisis show that employees are eager for how productive they are. “Companies are not very clear about the objectives or their performance management framework,” he says.
“Part of the reason CEOs think the plans are going well is because no one wants to say no,” says D’Souza. In a time of job insecurity, few people will dare raise their hands and admit to being underemployed.
One woman who raised her hand was Brittany Becker, a talent acquisition specialist at XOJET Aviation, a Florida-based private jet company. She admits that she felt “vulnerable,” adding that “fear of the unknown is obviously scary.” Now she is working in maintenance management. It’s “completely different. I was used to being the company’s first impression… Much of my job before was to make judgments and now it really works according to the book, as there really is no gray area in maintenance.” He also had to quickly learn new software and terminology, although he believes it has given him a better understanding of a different department.
Mr. Lloyd-Smith of Cass says that previous research suggests that after an urgent crisis there is a pause of energy and motivation after the crisis, as workers suddenly lack a critical purpose. “There may also be a feeling of envy from those who have played important roles, but are not celebrated.” For example, those who continued to work hard in their normal roles, keeping the organization afloat, were discouraged at having received little praise, compared to those in front-line jobs.
Business leaders certainly believe that some of the fast-paced change during the crisis will endure. The need to work remotely and use virtual collaboration tools has made them and some of their teams more productive.
Ms Ader from Egon Zehnder believes that innovation departments will have to redefine themselves as it becomes clearer how ingenious solutions to crisis problems were generated in all organizations. Winter at Standard Industries has been able to accelerate the move to further digital roofing sales: “We’ve increased adoption with people who would have otherwise been more reluctant. We hope this is one of the kinds of things that will hold up when we go out. from this “.
After the crisis
Soames says he hopes that after the crisis, “people will value public services more.” They will value the people who deliver them the most. They will be kinder to the people who clean their garbage cans, to the cleaners. “However, if they are paid more, it is still” a case of supply and demand, “he says, as public sector customers with Liquidity is likely to be under great budgetary pressure.
The prospect of a global recession looms on the horizon, one that will push even company managers who survive a new round of tough decisions.
Serco has given some of its executives the responsibility to think through the implications of larger government deficits and the need to catch up on the work that healthcare clients delayed in dealing with the coronavirus. But Mr. Soames says his managers spend more time “rushing” dealing with immediate priorities: “Overall, we don’t want most of the organization to think about thinking: most are up to their ears” doing it. ”
Similarly, Mr. Roberts of DS Smith says he has to focus on “the here and now.” “We are trying to untangle, when this blockade recedes, what this means… Is going to be a future of consumption. [but] What will that look like? . . . We have come out of the bogus war to “this is real” and we are right now and we have to focus on really keeping the company together. “
Above all, he is aware that DS Smith, until now, is one of the lucky ones. He spoke to a client, a successful German family-owned industrial company, which employed 4,000 people but had to suspend 3,800. “We talked to them about starting [again]. They said, “We don’t know if we have a business.”
