MAP Insights
By Mary Jade R. Divinagracia
Our new world demands a new breed of leaders
The year 2020 is probably the year we will all look back on with much trepidation. After all, it is the year when everything that could go wrong around the world, happened. Wildfires, volcanic eruptions, hail storm, flooding, earthquake, mass protests, explosions and, of course, COVID-19.
Filipinos continue to rise above these challenges as a nation. So it is no surprise that when we surveyed 161 CEOs and business leaders, 59% remain confident of the growth in their own organization in the next 12 months while 90% see this in the next three years.
COVID-19, no doubt, is the biggest disrupter of the century. No force in history has stopped the global economy on its tracks or has left global leaders and business executives so dumbfounded. When faced with the unfamiliar, leaders tend to fall back to doing things they are used to and return to business as usual. Yet, more than ever, this is the time when people look to their leaders for creative solutions under the business UNusual.
CEO survey respondents identified communication, agility, critical thinking, decisiveness and innovativeness as necessary skills that a leader must possess to navigate crisis situations.
Communication — Effective communication during a crisis is critical. There is no such thing as over-communicating during a crisis. People expect leaders to communicate frequently and with a sense of urgency. Frequent communication provides the employees a sense of comfort and reassurance.
One leader who stood out is New Zealand Prime Minister Jacinda Arden. Not only did she use various channels to communicate to her constituents, she also connected with transparency and empathy. She provided regular updates based on factual and scientific information. She was brutally honest about the country’s situation and, at the same time, offered hope by presenting clear plans.
Communication tops the CEOs’ list as the desirable characteristic of a crisis leader. Consistent with this, 69% of the CEOs said that they will prioritize investing in communication software in the next few months.
Agility — At times of great uncertainty, it is common for leaders to adopt the wait-and-see attitude until things become clearer. However, failure to quickly take action, even at times with limited information, can be disastrous to the organization.
We have seen how companies have to continually adapt to the disruptions caused by COVID-19. Business leaders have navigated themselves through the uncertainty by making quick decisions and making adjustments as needed. Decision-making that used to take months have been reduced to days. Leaders are embracing agility in their operations.
Take for instance Dyson and General Motors, which designed ventilators in a matter of days. At the local level, San Miguel Corp. produced alcohol sanitizers just days after the lockdown.
Garment manufacturers produced personal protective equipment (PPE) to address the shortage at that time. Retail companies started selling online to get their products to consumers.
In our CEO survey, more than two-thirds said that they will change their products and services to rebuild their respective revenue streams after the lockdown. The pandemic is just a reminder that we are constantly facing disruptions. Leaders should continue to be agile and flexible.
Critical thinking — The ability to think critically during times of extreme uncertainty is crucial. Situations change quickly and decisions have to be made on the fly. It is easier to follow what others are doing, instead of asking questions. The risk of herd mentality or groupthink increases during crises. As people become anxious about making the wrong decisions, doing it as a group seems to be the safer alternative. We expect our leaders to make bold decisions, through thoughtful considerations and asking the right questions.
Pre-COVID, many of us did not believe that we can work productively at home. And yet, circumstances forced us in this situation. Now, 73% of the CEOs see their organization implementing a work-from-home policy even after the pandemic. Forty percent of these CEOs also see a potential reduction in their office space in the next 12 months. Those who questioned the status quo and the traditional way of doing things came out more prepared to pivot when circumstances called them to.
Decisiveness — Many lauded Taiwan President Tsai Ing-wen’s decisiveness in curbing the coronavirus in her country. As early as February, Ing-wen recognized the threat of the virus, implemented border control and required the use of face masks. Leaders must have the confidence to make decisions amid the uncertainty.
The speed and magnitude of the crisis are daunting. It is easy to see why so many missed making decisive action on a timely basis. CEOs had to balance the decisions of continuing operations and the immediate safety of their employees. While 50% of the CEOs we surveyed believe that COVID-19 has the potential for having a significant impact on their business operations, the safety of their workers always came first.
Hard decisions have to be made, even if it means making it without a crystal-clear view of the future. Not making one, when needed, can be more devastating.
Innovativeness — Crisis can put innovation into overdrive. We have seen a lot of innovations during this pandemic — from changing the way we work to developing vaccines. Leaders who push innovation during this crisis are setting their companies up for success.
Statistics show that companies that focused on innovation during the SARS crisis outperformed the market average by over 30% after the crisis was over. Apple CEO Tim Cook’s philosophy, from the last global crisis up to now, has been to continue to invest and innovate even during downturns. Many of the major companies in the Fortune 500 were hatched during a downturn or a crisis. These include Apple, Microsoft and Netflix.
In our survey, 80% of the CEOs plan to increase their investments in technology or digital transformation. Majority of them said that they will invest in data platforms and contactless payment to cope with the current reality.
Many leaders have proven themselves capable to address the challenges of the pandemic and embrace the new world.
Those thinking that we can still go back to the way it was are missing out on what it can be. This crisis presents an opportunity for us to build a better world. We will continue to see disruptions, perhaps not in the magnitude presented to us by this pandemic, but we should not lose the lessons of this one.
As humans, it is natural for us to be scared of the unknown. As leaders, we should remain to be the beacons of hope and stability for it is on the darkest nights that stars shine the brightest.
For more details about the PwC – MAP CEO survey, visit www.pwc.com/ph/ceosurvey.
Join us today in critical conversations at the MAP International CEO Web Conference 2020 as we discover the new world and reignite the stalled global economy.
Mary Jade R. Divinagracia is a member of the MAP CEO Conference Committee and Managing Partner for Deals and Corporate Finance of PwC Philippines/Isla Lipana & Co.
