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How does C-suite leadership deal with something as unprecedented as the COVID-19 pandemic? Enterprises that have invested in disaster recovery and business continuity are ahead of the curve, but few, if any, could have prepared for a crisis of this magnitude. As former heavyweight champion Mike Tyson once said, "Everyone has a plan until they get punched in the face."
But perspective is important. The coronavirus is "only" the most recent crisis we've had to face. There are lessons to be learned from past crises that can help companies get through these down times and thrive on the other side.
John Chambers knows this better than most. The former CEO of Cisco estimated that he's had to navigate five major market crashes in his professional career, including economic downturns in the '90s, the dot-com bust of 2001, the housing bubble crash in 2008 and the current coronavirus-driven crisis.
That perspective is important because many C-suite leadership executives today have an experience gap to overcome. "The earlier financial crises occurred closer together and senior leadership learned how to survive," Chambers said in a video address sponsored by Techonomy on March 20. "But we've gone 12 years without such a challenge and there aren't as many data points people remember."
Chambers sees dark times ahead for the economy, but it's also a time for companies, specifically C-suite leadership, to act decisively. "The speed of the downturn is going to be brutal. In the next quarter we're going to see the fastest GDP drop in our lifetime," he said, adding, "I hope I'm wrong."
What should companies do?
However bad it may be at a company, Chambers and others interviewed for this story have specific advice for dealing with the crisis.
Like other experts, Chambers believes we will know a lot more one month to 45 days from now about whether the plan to flatten the curve of the coronavirus spread has worked and where the economy is headed.
Once you're ready to make the big calls, Chambers said it's important to act decisively and take the hit once rather than drag out disruptive layoffs and budget cuts over time.
"Deal with the world the way it is and analyze things the way a doctor does -- not focused on symptoms, but figuring out how to get the patient well by addressing the underlying issues," he said.
Big projects like digital transformation may be put on hold, though Chambers said those companies that can afford to continue that work will come out stronger when the economy recovers. "Some things are going to be put on hold for a bit. Any marketing effort is coming to a dead stop," said Maribel Lopez, founder and principal analyst at Lopez Research.
On the other hand, she said this a time when big companies may be looking at ways to modernize their ERP and use technology that helps them communicate more effectively with the supply chain.
The CIO challenge
C-suite leadership is facing all sorts of obstacles, but CIOs have a particularly tough challenge because they are dealing with a rapid acceleration of business and technology priorities. "Companies weren't prepared to shift everyone over to working from home overnight," said Lopez. "Unless you were a cloud-first, tech-native company, you did not have a structure in place that lets 98% of the company work from home securely. I feel for the CIOs because they're among that small group that don't get to stay home because they have to deal with infrastructure issues."
A recent article by McKinsey noted that CIOs have a responsibility to make sure the work environment is safe for those who still need to be physically in the office. The research firm said one company has created six work zones and the rule is no one is allowed to cross from one zone into another. The thinking is that if someone gets sick in one zone, they can isolate it from the other zones quickly. "At one European financial organization, leadership has organized shifts so that key leaders are not in the same room and has identified backups for executives and key managers," the report said.
Crisis management as a skill
Kim Hirsch is another veteran of crisis management. Earlier in her career, she was the crisis response manager at a major financial institution and currently serves as manager of advisory services at Fusion Risk Management, which specializes in business continuity and other crisis management offerings including pandemics.
While the coronavirus outbreak is far beyond anything we've faced, Hirsch said there are proven approaches to dealing with a crisis that still apply. Companies that have already invested in business continuity -- such as financial institutions that are required to -- are better prepared. "By now, everyone's heard about things like social distancing, but if you've been involved with crisis management in the past 20 years, you already knew that was going to come into play," she said.
While the ability of the CEO to lead is critical, Hirsch said it's important that anyone in a C-suite leadership role be a calming presence. "Experts should lead in what they do best and C-suite [leadership] should let them do their job," Hirsch said. "The CIO has to be sure everyone is getting the support they need in concert with the rest of the executive team."
As one example, Hirsch noted that there's now a massive wave of employees who have to work from home. "Working from home a day or two a week is one thing, but every day is something else," she said. "People start to realize they aren't as productive with a smaller notebook screen, so maybe the CIO has to make sure, if possible, that employees are able to get external monitors."
Keeping both a short- and long-term perspective
ABI Research didn't mince words in a report on the coronavirus, noting a significant cost of human life and impact on both society and business. There is no silver lining to any of that except the hope that we emerge from the worst of it sooner than later.
"Taking a step back… companies cannot do anything but make bold decisions to survive. We have seen this in the scientific and technological gains emerging from World War II (WW2), as well as after the numerous stock market crashes in the 1920s, 1980s, and 2000s," said Stuart Carlaw, chief research officer at ABI, in the white paper. "Perhaps the Coronavirus Disease (COVID-19) outbreak and the global reaction to the pandemic is stimulation for change of the magnitude that will force companies to radically rethink how they operate and embrace technological investment to make this happen."