Leadership and Crisis Management During the COVID-19 Outbreak
“In this uncertain environment, one thing remains true: Leadership and strong management can alleviate fear and build confidence” - John Chambers.
By John Chambers, former Executive Chairman and CEO of Cisco Systems and current CEO and founder of JC2 Ventures
The Novel Coronavirus (COVID-19) has disrupted our world. From restaurant closures and public transportation cancellations, to wide-sweeping remote work policies, and supply chain interruptions due to irregular supply and demand. Businesses, governments, and citizens alike are learning to adjust to a “new normal” I expect might last three to five quarters. In this uncertain environment, one thing remains true: Leadership and strong management can alleviate fear and build confidence.
When COVID-19 first started jolting global businesses and governments, I was immediately reminded of other crises I’ve seen throughout my career, leading Cisco and now as a venture capitalist, mentoring and investing in more than 18 different startups. Financial disasters like the 2001 dot-com crash and the Great Recession in 2008 clobbered many other businesses, while we doubled-down and came out stronger than before. Healthcare emergencies, like Bird Flu in 2005 and 2006, Swine Flu in 2009, and even Zika in 2016, showed us the importance of digitizing the workplace, with Cisco TelePresence leading the charge with the creation of video conferencing in 2006.
After reflecting on those past experiences, of which I was able to count five financial crises, five healthcare crises, and three major global supply chain challenges, I thought of the new generation of CEOs leading today. The stark reality is that these young men and women do not have nearly as much experience managing through extremely difficult situations. What’s more, even if today’s leaders have experienced some significant crises (like the Great Recession), they have certainly not seen anything like COVID-19. That’s because this is a new kind of crisis. In the past, we have only seen one key factor, plus the speed of change, drive a crisis. However, with COVID-19, there are four happening simultaneously: a global pandemic, a slowing global economy, supply chain challenges, and the speed of responses that is required from governments and businesses. The complexity of these challenges – and the rate in which they are happening – is completely unique because our world is more connected than it has ever been before, due to 5G, IoT (the Internet of Things), and AI.
Now, more than ever, leaders need to exhibit strong management and sound decision-making – but only experience (from both successes and mistakes) can point to where to start. During the toughest times of my professional life – which historically had occurred every three to five years, but the last financial crisis was twelve years ago – I wrote down the steps we took and closely analyzed what worked well and what didn’t. Today, I have a replicable playbook for managing through downturns. Over the past month, I’ve been focused on applying a handful of simple steps from that playbook with the startups in our JC2 Ventures portfolio as they manage through the challenges COVID-19 is bringing to their daily operations. But I don’t want to stop there. I think other businesses can follow the same steps during this difficult moment in time.
What I’ve learned is that first and foremost, leaders cannot live with uncertainty, making their decisions one small step at a time. They must be visible and transparent. Crises are not the time to close the office door and agonize over the data alone. Together with their teams, leaders have to assess the situation and calmly determine how much of the crisis was created by the market, and how much was due to internal factors. For example, with a situation like COVID-19, we are of course looking at an externally driven crisis. Armed with that information, leaders can then outline their top five to seven programs to get their business through the crisis. Next, they need to paint the picture (North Star) of what the company will look like as they successfully emerge from the crisis. Then, they should reach out to key stakeholders (employees, customers, shareholders, partners, and members of the media), and share the plan of action and progress on a regular basis. Changes that are agreed on by the team should be made one time – swiftly and aggressively. And last, but certainly not least, leaders must remember that crises tend to last longer and have a deeper impact than originally anticipated. Leaders and their constituents have to understand that they are hoping for the best but planning for a more pessimistic outcome.
It takes discipline to follow the playbook, especially in the hardest times. It’s easier to hide. It’s easier to panic. It’s easier to act based on emotion. But leadership is not always easy.
It’s my belief that if leaders can follow these simple steps, they will be able to move quickly, stay focused on their long-term vision, and keep their businesses running at as high a capacity as possible. We managed to gain market share during various past crises, such as during the Asian financial crisis of 1997 when we doubled down on doing business in and with Asia. As a result, we became the market leader in every Asian market after the crisis had passed. While no businesses are resilient to a recession or the market fluctuations we are experiencing right now, these are steps leaders can take to stabilize and steady the feelings of uncertainty.
During trying times like these, leaders should focus on building confidence and resiliency among the public, inside their businesses, for our global economy, and for society. We have to move fast and deliberately. In the past two weeks alone, our JC2 ecosystem has cancelled all travel and moved every meeting to be virtual. We’ve held Board meetings, customer meetings, and even dinner roundtables from as many as 25 different locations, all via video. If leaders can follow the playbook and stay calm, they can adapt, be flexible, and stay focused on long-term goals, delivering the type of support their stakeholders need all the time but, especially during stressful, challenging times.
https://www.linkedin.com/pulse/leadership-crisis-management-during-covid-19-outbreak-john-chambers/