How should business leaders respond to the COVID-19 crisis?
Date: April 2020
Author: Subhasakdi Krishnamra and Kanchanok Bunsupaporn
The global spread of COVID-19, including in Thailand, has brought about not only severe health impacts, but also far-reaching economic damage. The Bank of Thailand recently revised down its forecast of Thailand’s economic growth to -5.3% in 2020, the worst since the - 7.6% contraction recorded during “Tom Yum Goong” financial crisis. Even during the “Hamburger” crisis, the Thai economy only registered a - 0.7% GDP decline. Therefore, business leaders now have to grapple with the enormously challenging and uncertain circumstances. They are also very concerned about how their companies will be affected and what they have to do next to address the situation.
In the heat of the current crisis, how should business leaders respond? A Deloitte Insights article, “The heart of resilient leadership”, analyzes how chief executives and business leaders can successfully guide their enterprises through difficult times. The article identifies 5 fundamental qualities of resilient leadership that will help leaders get through the crisis.
1. Lead with the heart and the head. In times of crisis, it is critical for business leaders to demonstrate high levels of emotional intelligence, as well as express sincere empathy and compassion for their employees and customers alike. During these most difficult times, people’s top priorities are their safety and health. Hence, the most important thing is to take care of your employees and customers. At the same time, it is equally crucial for business leaders to protect their companies’ financial performance amid high uncertainties. Leaders should centralize decision-making to ensure clarity and speed. Moreover, all decisions and steps taken should be driven towards the company’s main purpose.
2. Ensure business continuity. Faced with a myriad of urgent matters, business leaders must identify priority areas and focus their energy on the most pressing issues.
A study of organizations that have successfully dealt with past epidemics shows that leaders should respond by setting up a special command center, make greater use of digital technologies, and stay regularly engaged with customers.
3. Aim for speed over perfection. Confronted with a growing number of emergencies, leaders must make daring and swift decisions. Leaders must also prepare contingency plans to cope with the uncertainties. Having clearly defined goals will help leaders make sound and speedy decisions, even with imperfect information. In the absence of complete data, leaders should make use of proxy data to guide decisions. When the situation returns to normal, leaders should conduct a review with a view to improving information quality in future crises.
4. Build trust with all stakeholders. Trust is of utmost importance in times of crisis. Trust can only be built with the following three elements. First, ensure transparency through open and frank communication. Second, build good relationships with customers, business partners and employees. Third, stakeholders need to have confidence that your company’s promises will be kept. Trust is the most crucial factor in uniting all stakeholders to overcome the challenges.
5. Look for opportunities in the emerging “New Normal” Business leaders should find the right balance between short-term and long-term strategies, between cost saving to ensure short-term survival during the economic downturn and making investment for long-term future growth. The COVID-19 crisis has triggered rapid structural changes, for example by forcing companies to embrace technologies. Business leaders who are only focused on short-term thinking and overlook the long-term view will miss out on long-term growth opportunities, such as investing in technologies and launching a digital transformation. This will deter the company from achieving its growth potential in the next emerging ‘new normal’.
Business leaders with these 5 fundamental qualities will inspire their organizations to get through the crisis, raise their brand to a better position, and be prepared to respond effectively to future developments. This crisis will also lead to new learning opportunities, organizational change, value creation and deepening trust with all stakeholders.
To read this article in Thai language