From the beginning of the Covid-19 crisis, organisations have experienced an unprecedented situation. Dealt with like a temporary health crisis, it has now become a long-lasting one forcing organisations to rethink their economic models. It is no longer a question of managing a single crisis but of building a new trajectory resistant to crisis episodes. Preparing for the exit whilst building resilience will both be key for organisations.
SHIFTING FROM A CRISIS TO A CRISIS TRAJECTORY
Coping with the crisis
It began during March 2020 and tested organisations’ resilience in the face of quarantine and sustaining a minimum production level when possible. Interestingly, the invisibles of the market have become increasingly visible: the crises highlighted groups of key players such as delivery personnel, cashiers and all those who have to manage physical transactions. As the French President put it in his speech on April 13th, “the balance will consist in maintaining three main effort areas”: first, save the carers, then the food and logistics operators, finally the entire population.
Lockdown and re-openings: crisis episodes to be overcome
Several signals indicate that this is not a time-bound crisis, but long-term trajectory made up of a succession of crisis episodes. For example, the loss of 8% of French GDP at mid-April highlighted an unprecedented decline since 1945 for the French economy. Added to this is the French Prime Minister’s speech on April 19th on the fact that vaccines would not be available until the first half of 2021. If lockdown represents one crisis episode, re-opening is another.
On April 13th, the French President raised the idea of a gradual end to lockdown on May 11th. The announcement sprung relief and anxiety as to how it is going to take place. Indeed, although companies are preparing for re-opening, they are reworking with uncertainty. Business leaders must thus learn to manage crisis shifts in a very short period of time and build organisational resilience.
Safeguarding business continuity
Many employees found themselves either remote working or working both remote and physically, requiring adaptation with an inherent health risk. Organisations reshuffled their activities from an operational and economic point of view.
At the beginning, companies considered the Covid-19 crisis like an exogenous constraint. They took measures to address the lockdown, believing this mode of operation would not last and hoping for a quick return to the previous state of operations.
MANAGING THE LOCKDOWN CRISIS
Corporate strategy has turned into an ability to maintaining business under lockdown existing legislative constraints whilst complying with new restrictive measures, interrupted market exchanges, and stress-out labour forces.
Dispel fear through discussions
Crisis is an emotional shock that calls into question all past achievements. It also highlights the frailties of what once seemed natural: the survival of oneself and loved ones. This fear alters behaviour, judgement and also social life interactions. Concerns need to be expressed as change often creates a shock. However, covid-19 affects something that is called the human ontological security: the psychological and existential balance.
Innovate to seek operational solutions
On the one hand, companies have tried to stabilise production chains where possible; on the other, they developed innovation. In doing that, they resorted to different modes of operation: food manufacturers and logistics players have secured supplies, (agricultural cooperatives for canned vegetables reviewed producers’ contracts for instance); Air Liquide, PSA, Renault and Schneider joined forces to produce respirators for hospitals, and so on. Innovation helped find operational solutions to the current situation.
Find what we were not looking for
Flexibility is important, but we talk of “serendipity”. The random discoveries organisations are making are an important source of innovation. Companies should use them to rethink their operational modes and ways of working. One well-spread example is that they are developing social distancing to an unprecedented level, and that it is remote working. It would be delusional to imagine returning to the “normal” way after that.
WHAT COMPANIES HAVE AND WILL HAVE TO HANDLE
The psychological health of employees
Management’s support to employees during these times is essential. More than performance, managers must emphasize on psychological needs as 25% of quarantined employees may risk depression.
The leader’s speech
In an uncertain environment, teams develop high expectations in terms of communication. There is a dilemma: how can we raise awareness without being too alarmist? Frequency of communication comes into play: when should a leader intervene? To be effective, communication must become a carefully crafted ritual in line with the leader’s expectations.
For two reasons: capture attention and simultaneously provide hints to manage concerns related to the crisis. Communication must be upward and downward to allow the message to spread and social interactions. Being in a group of people who are experiencing the same emotions channels fear.
The communication triptych may help here: observation, explanation, proposal. Indeed, understanding allows the development of resolution processes.
The importance of operating teams
Who operates tasks? Who’s on the front line? Those on the front line take more risks which should be collectively valued. Expertise, courage, willpower but also sometimes constraints are the reasons why some people operate on the front line. The crisis has also thus triggered the development of delivery mode postures (taking risks, initiating action, producing, managing constraints, using resources, finalizing).
Consumerism and social ambition-based models have been roughly shaken in these times. Today, consumerism should serve the sense of societal benefit. Works on the creation of meaning in one’s actions (by Weick) provides us with different needs that determine people’s level of commitment: needs for security, future-looking and recognition.
People must be able to carry out their professional and social activities without fearing for their life and health. The members of a community expect both material (salary) and symbolic recognition according the social justice theories on the perceptions of fairness and inequity. Therefore, leadership must address these needs: all decision-makers, may they be parents, heads of state, business leaders, must find a plan to manage and exit the crisis as seamlessly as possible.
"Individuals are looking for strong and weak signals that give them a glimpse of a possible future."
Driving ordinary innovation
Urgency is everywhere: quick solutions must be found often with local means. Ordinary innovation embodies somewhat serendipity. Indeed, it is a matter of finding solutions through multiple iterations that may prove relevant and even disruptive. Nevertheless, it requires thinking out of the box and prototyping solutions almost in real time. That way, companies can test crisis responses.
That’s not all though: innovation also relies on open-mindedness and believing that everything is always possible. For example, when pharmacy students decide to produce hydroalcoholic solution, it is a matter of urgently producing something that is useful to the community using the available resources.
ORGANIZATIONAL RESILIENCE =
Communication + Leadership + Ordinary Innovation + Immediate Response + Operating Actors
MANAGING A MULTIPLE CRISES JOURNEY
Organizations will need to develop their resilience to be part of a crises journey whose duration will be inversely proportional to the level of resilience achieved.
A crisis is an existential revelation: it tells us what is really important and what we want to save at all costs. In Japanese culture the notion of change is defined through the binary pair “tradition/innovation”: one must ask oneself what should be kept at all costs? What should be changed?
From this point of view, the proposal considers two frontiers. The first is about what has been achieved and the fundamentals that should be retained. The second refers to the new greenfields.
"We associate normality with the pre-crisis situation. But is a return to “before” possible or even desirable? We need to invent a new "normal" that integrates this long sequence of unprecedented crises that will last."
Gilles Bonnenfant, Président of Eurogroup Consulting
What has been achieved and the fundamentals to be retained
The first frontier lies in the vital elements we want to preserve. It is a question of preserving the means and ways of production in order to continue the economic activity even though elementary processes will probably require adjustments. Working on the company’s purpose and mission is one way of managing its first frontier in a positive way. This amounts to questioning the meaning given to production and its place with regard to collectives.
Greenfields to investigate
The second frontier is that of innovation on working modes. In reaction to what has happened, new forms of management and organisation will emerge. Remote working is increasingly taking a major place in companies’ strategies on the one hand. On the other hand, the local and circular economies will gain extra momentum.
The value given to front-line workers may shift and materialise through changes in career paths. Institutions must support all these idea generations which will contribute to economic value and develop local jobs.
Our economy is comprised of three sectors being agriculture, industry and services. What about a fourth sector on “social innovation”? In organisations, it will take the form of entrepreneurial projects, designed by employees who wish to invest time and energy in something new. Entrepreneurship (and/or intrapreneurship) is a means for individuals to fulfil themselves and create value for society. This second frontier is meant to become tomorrow’s first frontier, the one of a world of progress that integrates past achievements as well as mistakes.
David Autissier, Senior Lecturer HDR IAE Eiffel, Director of the ESSEC Chair in Change and Managerial Innovation (France)
Cécile Michel, Partner at Eurogroup Consulting France