The COVID-19 public health event, and similar 21st century threats impacting business continuity, require plans for immediate action while management and boards may face an extended period of financial and operational uncertainty. The current crisis is one of those times when core operational impacts demand immediate leadership attention and rapid decision-making. Even organizations with robust emergency response and business continuity plans are under operational and financial stress to continuously prioritize, analyze, and adapt. Ankura has identified ten focus areas that should be top of mind with business leaders for accelerated consideration and execution during the current crisis. Our experts will consider the key short-term actions, identified risks, and future considerations in a series of articles.
In part two, we examine:
- Human Capital
- Crisis Communications & Messaging
- Virtual Project Management
A Note on Terminology:
Throughout these articles, we use the term “crisis” as an umbrella term for COVID-19 and correlated volatility. We use the phrase “next normal” to highlight the as-yet unforeseen future state beyond the initial crisis. This “next normal” does not refer to life pre-COVID-19. Rather, it is to be envisioned as the unfolding future state geopolitically and economically, in which organizations will reposition to operate.
1. Human Capital
ACTIONS FOR THE NEXT 30 DAYS:
Assess Workforce to Reprioritize Strategy: Define how your workforce can execute relevant strategic activities considering health and safety constraints, across individuals, teams, functional groups, and the overarching organization.
Focus on the Right Costs: Optimize workforce costs through focused analytics. Cost reduction does not necessarily equate to a reduction in headcount, as there may be other fixed and variable costs assessed in the initial cost analysis. Tighten financial controls and escalate decision-making. Were the workforce to be impacted via a strategic reduction, there are reasonable ways by which rightsizing can occur (e.g., furloughs, PTO, and sabbaticals).
Accelerate Performance with the Right Human Capital Levers: Pursue accelerated performance in-crisis by examining and executing on key human capital levers. Consider both salaried and hourly workforce in connection with current customer demand and redefine key performance indicators (KPIs) and operating procedures as necessary to accelerate the meeting of performance objectives.
Consider Culture: Consider the organization’s unique culture and the impact of crisis on employees. Determine approaches to effective corporate communication to guide teams through volatility and manage expectations.
KEY RISK FACTORS:
Siloed Functional Efforts: Siloed responses and execution within functions can occur when leaders are not clearly and consistently communicating on strategic activities.
One-Dimensional Cost Reduction: One-dimensional cost-cutting and its negative cultural implications can be harmful. Leaders should not take a single financial lens to cost-cutting (e.g., headcount reduction). A focused, non-strategic reduction in the workforce has severe cultural implications, with organizations exiting the current crisis potentially bereft of critical high-value talent. There are additional legal, customer, and brand considerations to consider when cost-cutting through generalized workforce reductions.
Shifts in Customer Demand: Changes in customer demand in-crisis (and beyond) will impact the relevant essential human capital requirements going forward. Leaders must be aware of shifts in customer demand transitioning into the “next normal”.
KEY CONSIDERATIONS FOR THE FUTURE:
Talent and “Next Normal” Strategy: As organizations transition to the next normal, they will necessarily be operating differently. There will be long-term shifts in business models and customer experience efforts. As leaders define ongoing strategy, it will be important to link strategic activities through the appropriate talent pool. Leadership teams must work together to refine what human capital requirements have increased, decreased, or remained relatively stable throughout the crisis period.
Prepare for, and Mitigate, Organizational Burnout: For many organizations, in-crisis execution will put enormous strain on leaders and teams. To transition to the “next normal,” leaders need to emphasize the reconstruction of work-life boundaries, as well as encourage the maintenance of their employees’ physical and mental health.
Restore Culture and Reinforce “Next Normal”: Depending on necessary cost reductions or business model transitions during the crisis period, leaders may need to restore cultural expectations and reinforce “next normal” strategy with employees. This includes consistent, clear communication on reprioritized strategic initiatives and the future vision for the firm.
A component of this effort should include quantitatively reexamining human capital to understand the different resources required to drive evolving value propositions.
2. Crisis Communication and Messaging:
ACTIONS FOR THE NEXT 30 DAYS:
Align on Crisis Response and Stakeholders: C-suite leaders must collectively align on their crisis responses and determine appropriate messaging across relevant stakeholders. They must identify the key stakeholders and messaging required to support employees, customers, financial stakeholders, organization boards, and other partners.
Develop Communication Strategy: Once messaging and stakeholders are defined, leaders must develop a communication strategy and plan covering messaging, channels, and communication cadence. The most critical communications must come from the leadership team to establish trust and authority.
Select and Blend Communication Channels: Formal and informal outreach should be blended, with teams leveraging new and old channels when appropriate (e.g., email threads and video conferencing happy hour calls). Leaders should communicate honestly and transparently, discussing the crisis’ impact while taking a tone of resolution and hope. Communicate what is known, what is not yet known, and the steps necessary to pursue stability in the face of change.
Focus on Key Crisis Communication Attributes: When defining crisis communication, leaders should focus on the following attributes: empathy, transparency, simplicity, context, and follow up actions. For example, from a customer perspective, organizations should clearly and concisely provide information on safety, operational continuity, and availability of products and/or services. When possible, communications should leverage visual elements to simplify messaging and provide additional context.
KEY RISK FACTORS:
“One-Sizing” Communications: Organizations are at risk of “one-sizing” communications, but one size does not fit all stakeholders. There will be different contexts across internal and external stakeholders, depending on the industry, geography, and market environment.
Overcommunication: Organizations should not overcommunicate without consciousness of relevant context. For example, do not promise store reopening without clear internal context and internal strategizing. Iterative communication is recommended, as it allows a tailored message considering ever-changing circumstances.
Reactive Communications: Leaders should proactively pursue a crisis communications strategy before the appropriate narrative is circumvented by misinformation or rumors. Fear and anxiety abhor a vacuum, and stakeholders will fabricate a message if left without context and structured communications. Additionally, leaders must remain vigilant to communicate in a unified and authoritative fashion, while balancing empathy for all impacted parties.
KEY CONSIDERATIONS FOR THE FUTURE:
Define the Vision and Communicate the “New Normal”: Leaders must define the vision for their organization’s “next normal,” strategically communicate and reinforce the vision across their organization and to relevant external stakeholders.
Develop Decision-Making Agility: Leaders need to reframe their decision-making criteria and process to focus on agilely responding to ongoing events. When possible communicate decisions with simplicity, clarity, and empathy.
3. Virtual Project Execution:
ACTIONS FOR THE NEXT 30 DAYS:
Leverage Cross-Functional Teams: Initiative leaders will need to leverage cross-functional teams to execute crisis-focused initiatives rapidly. Focus on initial buy-in for these crisis initiatives and connect them to the overarching strategies designed to protect the business throughout in-crisis volatility. Additionally, consider a faster-paced cadence of communication for highly critical initiatives (e.g., touchpoints twice daily).
Reprioritize Work Efforts: Reprioritization of work efforts will remain the norm throughout this crisis period. Leaders will be required to make tough calls and reallocate resources when necessary. It can be helpful to leverage adaptive, agile governance structures to drive decision-making. Leaders should enforce clarity on decision-making rights and escalate issues quickly to remove roadblocks. For example, one partnering organization has created a forum for rapid problem solving leveraging a virtual communications platform.
Balance Accountability & Empathy: Employees will be balancing the pressures of work in the context of ongoing anxiety surrounding in-crisis risks and safety. Enforce accountability while balancing empathy. Make sure goals are communicated clearly while remaining available and responsive to concerns and feedback.
Train for Remote Work Efforts: Teams will require training on communicating and executing from remote locations. Leaders must communicate expectations on response timeframes and the best channels for specific work efforts.
Define & Develop New Management Models: Leaders need to define and develop new models for managing, evaluating, and coaching resources through virtual channels. Whenever possible, create space for human connection, balancing task-focused efforts and people-focused talent development.
KEY RISK FACTORS:
Mis-Prioritization in Crisis: Leaders must be prepared for rapid strategy reprioritization as the crisis evolves. Difficult decisions will have to be made to de-emphasize formerly critical initiatives for the rapid execution of newly identified efforts.
Slow Execution: Leaders must closely monitor critical strategy execution and provide clarity of purpose and direction, as resources strive to execute in the face of volatility.
Miscommunication & Under Communication: It is vital that leaders communicate with clarity on work efforts and expectations to reinforce appropriate action. The odds of miscommunication or missing communication increase in times of high volatility and stress.
Missing Voices/Input: Virtual meetings can reduce holistic inputs from a full team. Work to capture the “quiet” or “missing” voices in the virtual room to make sure valuable perspectives are not lost.
KEY CONSIDERATIONS FOR THE FUTURE:
Plan for Future Scenarios: Leadership teams should be prepared to plan for multiple virtual work scenarios moving forward. Tasks formerly considered not possible virtually may transition more easily than expected to virtual execution. Other efforts may still require in-person execution, requiring leaders to carefully consider and coordinate efforts to protect the health and safety of employees.
Examine New Processes for Ongoing Innovation: There will be opportunities uncovered in the development of in-crisis virtual project execution. Leaders should assess any relevant lessons learned from reorganizing, reinventing, and reinforcing these new practices. There are potentially long-term practices that can be leveraged to drive effective and efficient project execution.
Continue Pursuing Digital Innovation Strategies: Virtual execution will likely broaden in the evolving “next normal.” Leaders should continue to intentionally strategize and pursue digital innovation opportunities for both employees and customers, depending on the products and services they offer.
Look back on part one of this series, where our experts’ discuss liquidity and business planning, secure remote workforce, government aid, and business interruption claims.
© Copyright 2020. The views expressed herein are those of the author(s) and not necessarily the views of Ankura Consulting Group, LLC., its management, its subsidiaries, its affiliates, or its other professionals. Ankura is not a law firm and cannot provide legal advice.
