Sole responsibility lies with the author. The European Commission is not responsible for any use that may be made of the information contained herein
Depending on geography and sector, companies are at different stages in the fight against the crisis. However, regardless of this factor, CEOs must act similarly when facing a crisis. We have identified five key qualities of resilient leadership that a good manager should have:
Heart and head: a resilient leader must be empathetic and able to put themselves in the shoes of their employees and customers, but at the same time be firm and rational to protect the company’s economic performance.
The mission comes first: leaders must be able to stabilise their companies during the crisis and, in these extraordinary circumstances, look for new opportunities.
Quickness is important: a resilient leader must take decisive action in the short term.
Leading the narrative: it is essential to take the initiative by being transparent about the current reality while drawing a compelling future scenario that inspires and motivates workers to persevere.
Long-term vision: leaders must maintain a vision of the future, anticipating the new business models that are likely to emerge and looking for the innovation that will define the company of tomorrow.
A crisis unfolds in three-time frames that CEOs must take into account and allocate resources accordingly:
Respond: the company must deal with the current situation and manage continuity.
Recover: the company must learn from the experience and emerge stronger.
Prosper: the company prepares and shapes its new reality.
This crisis can become an opportunity to move forward, create added value, and generate positive social impact
with the right approach.
Resilient leaders need to be empathetic and consider the human side of the crisis. The priority must be protecting employees, ensuring their health and safety, followed by their economic well-being. In addition, for the sake of those same employees and customers and creditors and investors, leaders must protect financial performance during the crisis by making firm, fact-based decisions.
To do so, they must:
Centralise decision making for consistency, speed and firmness without allowing uncertainty to paralysing us.
Catalogue the sources of financing available to the company, including unused credit lines, equity contributions, etc.
Articulate the different economic scenarios in which the organisation may be involved, ranging from mild to moderate to severe.
Predict the financial impact of the different scenarios on the company’s profitability and liquidity.
Define which products, services, customer segments, business lines or employees are the most critical to cash flow, both in the current and future scenarios and should therefore be preserved.
Identify the company’s tools to influence financial results, such as reducing discretionary spending, hiring freezes or temporary plant closures.
Companies that already have a crisis plan in place in the face of a recession have an advantage and may only need to make some adjustments to deal with the current circumstances.
We must keep in mind that, during a crisis, a company’s purpose must remain strong. This is non-negotiable, as the purpose is where the head and the heart meet. While many organisations today have articulated a purpose beyond profit, it risks being ignored in day-to-day decisions. In a recent survey, 79% of leaders believe that an organisation’s purpose is fundamental to business success. However, 68% stated that it is not used to guide decision-making processes within their organisation.
Making decisions that align with organisational purpose is particularly important during a crisis when companies are under increasing pressure and stakeholders pay close attention to every move. When companies focus on authentic purpose, employees feel that their work has meaning, customers increase their loyalty to brands and empower their transformation.