Leadership Advice During Crisis from the Experts at Harvard, Andreessen Horowitz & Pear Ventures

The health, social, and economic outcomes of the coronavirus have left leaders around the globe bewildered. Despite the tremendous amount of unknowns and uncertainties ahead, leaders in every sector have to manage this crisis, adapt and learn, and drive their organizations to success. Most of us haven’t experienced a crisis with such scope in our lifetimes and thus haven’t developed a comprehensive toolkit to utilize in times of crisis like this. For that reason, last week I joined various panels held by organizations that I trust, such as Harvard Business School, Pear Ventures, a well-respected and successful early-stage venture investor in Silicon Valley, and theBoardlist, which connects exceptional women with global board opportunities.

More information on each panel and its participating experts are listed here: 

#1: Harvard Business School's panel of Crisis Management for Leaders; presenters were Professors Dutch Leonard and Bob Kaplan

#2: Pear Ventures' panel of Surviving the Downturn Economy; panelists were Heidi Roizen, Mahesh Ram, Bob Tinker, and Mar Hershenson

#3: theBoardlist's panel of Your Board's Role in a Crisis; panelists were Margit Wennmachers, Pat Wadors, Karin Klein, Marina Tsatalis, and Shannon Gordon

These leaders, executives, investors, board members, researchers, and experts have each seen at least a couple of economic downturns such as the 2001 tech bubble and the 2008 financial crisis. Additionally, Professors Dutch Leonard and Bob Kaplan of Harvard Business School have been researching the topic of risk and crisis management for decades and have established frameworks around this topic. Although every one of these experts testified that the COVID-19 crisis is unlike anything any of them have experienced in the past, they all offered powerful tools and insightful advice that I summarized below for the benefit of other leaders who may be seeking best practices during this crisis. 

Overall: 

• Historically, many of our legendary companies have been built during times of crisis. As leaders, you can use this time to your advantage. 
• Doing things the right way during a crisis like this could significantly increase your brand equity. 

Execution:

• In an unprecedented crisis like this, no one really knows the right/perfect answer to the in-hand problems of leaders. 
• If you don’t know the answer, remember to be a human first and treat others with empathy in any decision or action.   
• The best solution in these types of situations is to establish good “processes” for communication, transparency, and execution. 
• Establish a Critical Incident Management Team to oversee all aspects of the issues (e.g., financial, medical, logistic, economic). 
• Assemble the right team of people who understand your business and its priorities well and have the expertise/capabilities to manage crisis.

Communication: 

• Regular and truthful communication during these times is key. 
• A good rule of thumb for the frequency of communication during these times is to double the repetition of your pre-existing communications (e.g. if you used to have your staff meeting once a week, increase that to twice a week during these times).  
• There’s a fine line between transparency and over-communication. Choose wisely what and how much you need to communicate. Over-communication during these times could increase your employees’ anxiety.  
• Ensure you establish policies around COVID-19 as soon as possible if you haven’t already. 
• Have communication and execution plans for when/if your key team members or executives test positive for COVID-19. 
• If someone tests positive in your team, you must inform those who have been in contact with the person in the last 14 days while not disclosing the name of the employee.  
• Set clear expectations and limitations with your hourly workforce, the majority of whom now work from home. Ensure you clarify the boundaries of work hours and your expectations to avoid unexpected numbers of hours worked and potential legal ramifications for your company after the crisis. If you expect them to take lunch or a break, ensure that you clarify that.  

Layoffs: 

• Before you decide about layoffs, ensure you exhaust your other options such as cutting bonuses, promotions, and executive pay cuts. 
• If you need to lay off your employees, do it once, and do it with empathy. 
• Pre-announcement of an upcoming layoff is not recommended, as it will create unnecessary anxiety for all of your employees. The exception is in some states where regulations seem to require some level of communication in advance of layoffs. 

Funding:

• As a founder, you need to assume there will not be much funding available in the next 12 months and increase your runway. 
• Despite the fact that VCs may still have millions or billions of dollars available to deploy, due to their fiduciary duties to their investors (limited partners), they won’t do much investing in the current environment.  
• The tremendous amount of uncertainty in the economy and the turmoil in the public market will force VCs to sit on the sideline for the economy to stabilize. This will allow them to better decide where to deploy their funds and with what kinds of valuations. 
• If you are a founder trying to raise a round in the coming months, you need to re-adjust your expectations about valuation. 
• If you are in a fundraising meeting with investors at this point, it’s a sign of maturity of founders/executives to acknowledge that we are in a different world now.  
• Being a seed stage company is not a bad thing now as your operation is super lean anyway. 
• If you are a founder and need to raise money, you can still try to raise with reasonable expectations; investors will still invest, but it will be a lot less frequent and with very different valuations. 

Sales:

• Your Sales Team needs to rethink their pitches. 
• The most important goal of your Sales Teams should be maintaining the Annual Recurring Revenue (ARR) as much as possible during this time. 
• Spend time with your customers to understand their new sets of problems post-COVID-19, and adjust your feature sets and pitch based on that.  

Board Members: 

• The role of the board is to be your organization’s long-term thinker since the executive teams are focused on executing in the short-term during this crisis. 
• The board should guide the executive team to think about any budget cut immediately. 
• One of the most important roles of the board members during this time is to be an emotional supporter for the CEO. The CEO’s job is already a very difficult one, even in normal days, and this crisis will make their lives so much more difficult.

Thanks to the panelists and experts who shared their advice with the rest of us. Good luck to everyone managing the situation within their organizations. 

Stay healthy, safe, and sane! We will get through this with the power of our minds.

To more sunny days than these…