The UK is now at the heart of the coronavirus storm and the economic and financial effects are becoming clear. While companies have worked on their processes to cope with implications of Covid-19, attention is some quarters has fixed on whether corporate leaders are fit to guide their companies through the crisis. It seems many may not be.
Research from Odgers Berndtson, an international head hunting firm, reveals only 15% of executives believe their leadership will succeed during disruption, including unexpected events like pandemics, tech advances, shifting demographics and climate change.
That pessimistic assessment is accompanied by an emphatic belief that handling “disruption” should be a core skill of executives in charge of companies. A Harvard Business Review Study found 95% of executives believe it is “critical for companies to succeed in turbulent times”.
Turbulence and disruption are one thing; the enforced closure of businesses by government policy designed to halt a global pandemic are another challenge entirely—one that will certainly test the most competent of chief executives.
According to Karen Meager, co-founder of leadership training consultancy Monkey Puzzle, the strains on chief executives are real: “The less desirable aspects of their behaviour are likely to come to the forefront,” she says.
She is not alone in her concerns. In a recent blog, Gary Burnison, chief executive of consulting firm Korn Ferry, wrote: “The natural inclination in a crisis may be to go into command-and-control. That’s not leadership.”
—Gary Burnison, Korn Ferry
It’s no surprise. The crisis is likely to cause everything from supply chain breakdowns to staff shortages; income and working capital issues will come to the fore while unpredictable government action could end trading temporarily and represent an existential threat.
The “key”, according to Meager, is for board members to “look behind the behaviour” and think about its causes.
“Often they [chief executives] feel a lack of control, so may need more updating or reporting during this time. They may need different forums to keep in touch with priority projects.
“Boards need to think ahead of their CEOs and think of what they need from a contact and information flow perspective.”
Training and skills
Of course, it’s hard to prepare for an event like a global pandemic. Though there have been past outbreaks and epidemics in which businesses have had to cope. Lessons can therefore be learned—if they’re taught. Perhaps a particular problem, therefore, is leadership training and the preparation of executives to head a company facing challenging times.
—Carum Singh Basra, Institute of Directors
That places the focus on skills, a concern for the Institute of Directors as it observes the current crisis. Most directors, the institute says, receive no formal training for their role, their responsibilities, or the skills they require.
Putting the skills in place means much of the executive work of handling a crisis has to be done long before it hits.
Carum Singh Basra, corporate governance policy adviser at the Institute of Directors, says: “Improving the competence and professionalism of corporate leaders through director training and professional development helps to safeguard against preventable failures, particularly in a crisis.
“Ultimately, it’s strong leadership skills that enable directors to solve problems, cope with crises and change. And crucially, to inspire others to follow them in difficult and uncertain times.”
Elsewhere, observers believe companies place too much importance on chief executives alone. They argue that investing all responsibility in a single leader is an error.
Andrew Kakabadse, professor of governance and leadership at Henley Business School, says: “The focus has unduly concentrated on the CEO.”
—Andrew Kakabadse, Henley Business School
It is, he says, “leadership” that is important not “the leader”. He says leadership teams need a “robust dialogue” to develop a “shared perspective” of their challenges. He adds that the benefit of “rapid decision-making” is a “myth”: leaders need evidence and clarity.
“The powerful CEO sometimes uses their strength to hold back from deciding until all necessary evidence has been gathered and analysed,” he says.
Teamwork is required, as is the development of a clear vision based on evidence, shared urgency and regular briefings.
“Ironically, in these high-performing management teams, voices are rarely raised, people sit calmly and listen intensively, responding when needed. The more familiar image of high, even explosive energy as the leader behaviours to deal with crises are likely to make the situation worse,” he says.
“Clear thinking and a sense of calm must predominate leadership decisions and actions. A cohesive leadership exhibiting best practice wins the trust of all, especially through the most damaging stages of any crisis.”
Mark Braithwaite, managing partner of Odgers Berndtson, sums it up: successful leaders are more likely to be collaborative.
“If leaders have the humility to accept that they don’t know everything, they can create a culture of innovation where they include a lot more people in thinking through business problems, not expecting to be right every time,” he says.