COVID 19 the tip of the iceberg – Senior leadership teams must not be the 8-piece band on the titanic

Before I write this please be assured that my words are not intended to minimise the significance of the ongoing impact to individual health of COVID 19, I am not suggesting we should stop focussing on this but I am suggesting that now is the time for Senior Leadership teams to start having serious conversations about how to lead their organisation in response to the iceberg below the surface. I use the iceberg metaphor we all familiar with -it’s what is below the water line where the big revealing impact issues lie. It's too easy to become distracted by the transactional now, above the water line. Senior leaders must take responsibility for forward looking transformational leadership actions required to respond to below the iceberg. Let operational leads deal with the here and now. Conversations with SLT must be about ‘where do we take this organisation post lockdown and how do we lead it’? 

The point for raising this is not to highlight we are all doomed and destined to sink – My point is that strategic leadership is about defining strategy now, navigating those icebergs, reshaping organisational capability to sail safely into the future. To not start strategic planning discussions is tantamount to be the 8-piece band on the titanic playing bravely as the ship went down. There is so much more to the future implications of COVID19 than the changing aspects to the way we work from home (which seems to dominate Linked in Posts to date). Even if we just consider 3 elements of any UK business external operating environment: Changing global landscape, Recession in the Economy and UK employment market landscape; the scenarios to be considered by senior teams are significant and far reaching. Some interesting facts for each of these 3 elements are listed at the end of this article if anybody needs convincing of the imperative, but to those strategic questions to be considered now, by any senior leadership team, for the world post COVID19 lockdown please see below. (Set against Mckinsey 7S framework)

Strategy:

• How has our external operating environment changed? – have we re-mapped our market, re-assessed our market segmentation strategies, analysed competitor activity and changing consumer/end user behaviours/expectations
• Which will be our strategic thrust objectives: Market Penetration, Product Development, Market Development or Entry into New markets?
• For our chosen strategic thrust what will be our primary objectives – Build, Hold, Harvest or Divest?
• How do we adjust/realign our strategy to optimise performance in a changed market and trying to achieve that with organisational capability that has been diminished during lockdown and will likely not be at optimum performance again until Q4
• What are the implications for this on our current operating model?
• How do we communicate a required change in strategy that maintains confidence, engagement of shareholders, stakeholders and staff?
• How do ensure changes to strategy are cascaded through to department goals and individual performance objectives?

Structure:

• How appropriate will our current team structures be against a changed operating model?
• What will be our policy/mandate for hiring policy within the context of vastly reduced budgets resulting from re-forecast?
• How do we realign global P&L models, governance models to reflect changing globalisation landscape?
• How do we maintain productivity whilst operating changed staffing ratios of virtual working v office working?
• How do we restructure our business to achieve increased agility, flexibility, with leaner teams, flatter structures and increased spans of control resulting from the necessary down-sizing redundancy programmes?

Systems:

• How do we adapt our current governance process and systems to reflect the structural changes we may need to make above?
• How do we maintain our digital transformation imperative whilst at the same time adopting a more contained/holding strategic objective?
• How do we adapt performance management/reward systems to absorb the reality of a performance delta against budget, whilst at the same time not impacting individual performance contribution levels?
• How do we ensure our communication systems adopt robust change management principles (ADKAR) for customers, shareholders, stakeholders and staff post lockdown?

Staff:

• How do we re-engage our staff to a post COVID19 lockdown business world? What is our considered Gallup Q12 score?
• How do the current demographics of our workforce influence any new workforce planning strategies we may consider?
• Do we have a robust change engagement strategy for all our staff, and have we assessed change readiness for our staff to influence that change strategy (Change Kaleidoscope assessment)?
• How do we explain to our staff that budgets and performance expectations are unlikely to be reset by our parent/corporate – even though the staff will have lost best part of a year’s quarter productivity potential to achieve their own targets?
• How will we manage staff motivation and engagement should we need to restructure our business and cut headcount costs – in particular the staff that remain and are not impacted?

Skills

• Do we have skills matrix for our organisation highlighting critical role coverage map that will help us inform any business restructure programmes?
• What skills are a priority for the next 12 months to help us stabilise as an organisation? 
• How can we blend our resourcing strategy to access the skills we need on a contingent basis in the short to medium term?
• What skills do we need for the future – in response to our revised Strategic Thrust and Objectives?
• What are the likely in demand skills from 2021 (Post COVID19 landscape) and how will we compete to ensure we can attract those? What does our updated talent attraction strategy need to be?
• How do we identify the priority skills development needed for our organisation over the next 12 months to help us allocate Training and development budgets?

Style (leadership)

• How do we enable our leadership population to lead our people during this time?
• What do we see as the required present leadership style that enables optimum business performance whilst at the same time engaging our employees?
• What is our role as the EXEC/SLT as a leadership team during these times and are we all clear on our purpose and how we should be performing?
• Have we defined our Leadership Charter and how will we communicate this to our teams and ensure this is upheld?
• How will we optimise communication channels to enable 180 degree, transparent, honest, dialogue with employees at all levels

Shared Values

• What do we need to do to ensure our External Brand, Employer Brand stays aligned to our core values during difficult times?
• If our organisation has to make difficult decisions how do ensure we approach this in a way that is aligned to our culture and values?
• Shared values undoubtedly become stretched and tested during difficult times – what is our role in minimising the impact of this as much as possible?

I hope some of these questions help trigger a sense of urgency for discussion - Just a few questions to consider and to start driving the agenda topics for Exec/SLT meetings moving forwards. If anybody remains unconvinced of the significance of change post COVID19 – some food for thought below:

Globalisation: Are we moving from Think Global Act Local - to Think Local Act Local and Act again Local?

·     *International Monetary Fund warned that jitters over trade policy were dampening global growth prospects. It was at this critical juncture that Covid-19 emerged. The pandemic has exposed the fragility of cross-border supply chains and relationships. Covid-19’s threat to world trade took a more insidious turn last month. In January, Beijing stopped the export of certain medical supplies, such as face masks, including those produced by foreign manufacturers. Since 1 January more than 50 governments have imposed exports curbs on medical supplies. Germany stopped the export of 240,000 masks to Switzerland. India, a major producer of generic medicines, imposed a range of export restrictions on medical supplies and drugs, including fever-reducer paracetamol. *Moneyweek

Recession:

• GDP expected to contract by 5% in the first quarter post lockdown and then contract even more 2nd Quarter
• By the end of March FTSE 100 had recorded its biggest loss in 30 years
• Leading index of UK company shares reduced by 25% - a slump in share value not seen since Black Monday 1987
• The OBR expects the UK economy to slump by 35% between March and June and contract by 12.8% for the year as a whole. Unemployment is set to increase by more than 2 million to 10% in the second quarter, before gradually falling.
• Increased government borrowing to ￡273 billion – around 14% of GDP – in 2020. UK’s debt burden could increase sharply in 2020-21 as a result of the recession, higher borrowing and the accounting consequences of the Bank of England’s stimulus measures, and will be above 100% for most of 2020 before falling to 95% by the end of the financial year.

Employment Market:

• 6 million individuals furloughed (30% of businesses)– the cost of this effectively comes back into company headcount costs post July
• Virgin Atlantic predict making 3000 of workforce redundant and British Airways predicting 30% staff redundancies
• ONS - 25% of businesses currently cutting staff levels.
• CIPD-25% business expected to make permanent redundancies by end of 2020.
• 30% fall in employment expected – (resolution foundation think tank)