Stepping in – The Core Executive Roles in the COVID-19 Crisis

 This is my first blog on COVID-19 recovery and sustainability series

As said by Winston Churchill, “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” As the world struggles to contain the pandemic, there is a real risk of resurgence. It is more important than ever for Core Executive Teams to pick the right questions and guide their companies towards the “next normal”.

COVID-19 has engulfed most parts of the world with some countries slowly starting to resume work and others continue being impacted dealing with the global pandemic.

This is a true crisis for almost all the Core Executive Teams out there with operating challenges such as strained supply chains, liquidity issues and moving to Work-From-Home environment; the list just goes on.

So, what’s the true impact of the COVID-19 to the global economy? No one knows…

However, at this point of time, it is evident that some swift decisions need to be made. The way the executive team handles the crisis and do their work is going to be a critical factor in surviving the crisis and push forward for recovery for the benefit of all the stakeholders. We’ve been in the crisis mode for a while, yet there are number of uncertainties such as impact of government measures taken to contain the pandemic and the extent to which companies are strong enough to endure the crisis. There is also some uncertainty in the degree of impact to the workforce in the long run.

Organization are doing everything in their power to stabilize the current situation – actions taken now are going to define how the company is going recover once the pandemic is contained. According to Deloitte in their recent article explains that a typical crisis plays out over three time-frames: Respond (how to react to the crisis); Recover (how to position for the rebound) and Thrive (how to ensure success in post COVID-19 world) (Deloitte, 2020).

Core Executive Teams clearly have a critical role to play in guiding and overlooking the organization while giving adequate support to management teams. There are no playbooks to help handle the current situation, therefore the core team should acknowledge the same and be practical in governing their organizations.

(Deloitte, 2020) A good crisis response is about solving what can be solved to the fullest extent possible. Executive teams should play an active overseeing role related to crisis management, and engage and discuss: Management’s risk assessments amidst COVID-19; Business continuity plans; Organizational resilience; Development of new digital strategies; How to enable the digital workforce; Plan of communication with both internal and external stakeholders.

The role of the Core Executive Teams in a crisis can be to be supportive of Management in some other ways, as well: can set the tone of the organization for the response and to make sure Management’s actions and communications are effective; can balance support and challenge the management team at the same time; has perspective and more time to help think through dilemmas, when to support Management and when to push Management to make difficult decisions. These can be issues the Management may be hesitant to look at; has its own situational awareness of the bigger picture which is the actual strength of the Core Executive team in a crisis. The Core Executive team come with diversity of experience to the table.

The ability of the Core Executive team to fulfil this role relies on its strength of relationship and exchange of information with Management.

Strategy and scenario planning

The Core Executive team has a critical role in supporting a progressive agenda and in making sure that the organization aligns with the new normal that will follow the aftermath of the pandemic, identifying opportunities for the company to thrive.

Is the primary responsibility of the Executive team to navigate the management team on the aftermath of pandemic? Yes, beyond a doubt. 

The Core Executive team plays a critical role in key strategic decisions by challenging the impact of scenarios and forecasts together.

(Deloitte, 2020) According to the guidance document written by Deloitte, in light of the unprecedented uncertainty that the entire world is facing, experts have developed three plausible scenarios, each outlining a potential path for the global economies, depending on how the pandemic evolves. These scenarios are as follows:

·         Scenario 1 is a scenario where pandemic is contained but manifest in a short-lived economic contraction that is followed by a gradual recover reflecting the long-lasting legacies of the economic plunge. This outcome results in a drop in GDP of more than 1.5 times what we saw during the Great Recession of 2008-09

 

·         In Scenario 2 the pandemic lasts longer with waves of infection lasting through mid-year and into the third quarter of this year. There is also a resurgence of the virus into 2021. In this scenario, the global economy is faced with a prolonged shutdown extending into the beginning of 2021

 

·         Scenario 3 models a worst-case scenario. In this scenario, containment of the virus fails as the virus continues to mutate, preventing the development of a successful vaccine. The global economies experience a long-lasting decline in GDP (i.e. depression).

The organizations that strike the right balance between short and long-term strategies will emerge as winners.

The core executive team can support Management in decision making and how that will impact all stakeholders and encouraging the consideration of diverse needs, including meeting the most pressing societal needs right now.

The questions that Board members should be asking in this regard are: How do we recalibrate KPIs and strategic goals?; Where are our opportunities going forward?; What is society’s “new normal”?; Has the crisis impacted our reputation?; What are the implications of COVID-19 on our talent and workforce?; Is there a comprehensive view of the new risk landscape?; What are the lessons learnt from this; pandemic?; Building resilient leadership in management teams and executing on succession

 

Stakeholder engagement and communications

Should the Core Executive team have a public role and act as a spokesperson for the company.?

This is a challenging question – In some countries, the core team plays an important role in speaking with shareholders and other key stakeholders while other don’t

If the management team is fully focused on crisis management, the core team could in fact communicate with the key stakeholders and regulators etc. However, such involvement of the core team could question the confidence and capability of the management team.

The core executive and management team must work together to see how best communicate their crisis response to their stakeholders. While Management will take the lead in communication of the crisis response and related communications, the Core Executive team should oversee that the right level of engagement and disclosure is provided. In addition, both the core executive team and Management should decide on the best way hold annual general meeting (AGM) due to COVID-19. With the current restrictions on meeting capacity, many companies will be turning to setting shareholder meetings virtually.

Conclusion

No leader would want to face a pandemic such as COVID-19. Having said that, a crucial event like this may enable a significant transformation in the organization. The “new normal” for the company may look different in governance, strategy and ways of working. What strategies, decisions and directions are now on the table for discussion that perhaps were not before? The Core Executive team should be prepared to support change, and lead the change, or even be part of the change. There may be important learning from the current crisis and organization could emerge from it stronger and more resilient.  Such unanticipated crises are going to bring out shaping strategies of new value creation: the market shapers that shape the future of their industry rather than adapt to it will come out stronger and organizations emerging from this crisis by identifying new opportunities and align themselves with the future-shapers of their industry while the competitor continue to focus on the crisis failing to thrive.