How will HR leaders shape the post-coronavirus business world? Mark Bouch, Managing Director, Leading Change, examines in depth the role of strategic HR and leadership in rebuilding organisations in the new normal.
Seven weeks into lockdown, people leaders will be thinking about how and when to return to more conventional working patterns. They also need to focus on strategies for the post-COVID world. They, like everyone else, will be uncertain about the near-term future. Whilst there seems to be general acceptance that the situation won’t quickly, if ever, return to the ‘normal’ we left behind, there isn’t much consensus about the way ahead. This article addresses some of the thought processes we recommend leaders adopt to develop strategies for the post-COVID era.
Revisit strategic goals
Many will be tempted to use pre-COVID strategy as their start point. They shouldn’t. Economists, politicians and business strategists broadly concur that we face a period of significant economic fallout and many companies will be highly vulnerable during this period. Business strategy in the post-COVID world must be coherent; put simply it must be realistic and achievable given the opportunities that exist and the capabilities your business has (or can acquire).
Your next set of strategic goals must relate to where your business is now and reflect uncertainties about the near-term future, at least until economies start to return to pre-pandemic levels. Communicating your new intent will be vital. When people are dispersed and fearful, they don’t necessarily feel part of a connected whole, or indeed believe that a now more remote organisation has their best interests at heart. This is a period where leaders should build people’s connection to the organisation’s intent, focussing beyond the maintenance or restoration of operations.
Planning for uncertainty
Uncertainty exists in many forms. We’re uncertain how government policy will play out; we may be uncertain about changes to customer demand, how and when our supply chains will resume operations; when we should re-open facilities and return to the workplace; and uncertain about the business, operational and personal risks involved. This level of uncertainty can, and does, paralyse decision-making. It may seem easier to stand still or ‘wait and see’. Emerging evidence from Gartner suggests that 72% of business they surveyed ‘don’t know yet’ when they expect to be able to re-open closed facilities. Even when government progressively eases lockdown, better understanding of risks and suitable guidance in place, it remains unclear what proportion of our workforce will want to return to work. A new poll by Opinium for the Observer in early May concluded that fewer than one in five of the British public believe it’s the right time to reopen restaurants, pubs and stadia. With individual uncertainty about school provision, the safety of commuting, health and well-being at work, vulnerable partners and so on, it probably unrealistic to assume all our staff will embrace a return to the workplace any time soon.
We need to kick-start forward planning
Despite multi-layered levels of uncertainty, we urge business to kick-start forward planning[1]. Faced with uncertainty, people leaders need to make the best decisions they can, adapting them as the situation changes. Firstly, determine a relevant strategic timeframe to fit your specific business context. As a default we suggest using multiple time horizons including now, next month, up to two quarters ahead and one to two years ahead. This near-term planning is designed to bridge the gap between today and the next period of ‘normal’, whatever that looks like. Effective strategy planning requires a six-step approach which will need to be re-iterated as the situation develops, so it’s a good idea to keep it concise and repeatable from the outset:
- Describe the situation
You need to capture a realistic view of the current situation in terms that will be easily understood. Information is available from multiple sources. Some is reliable and some less so. The forward planner’s job is to look for the best sources of information then determine their level of confidence in the assumptions made. Keep it high-level and focus on what matters most, not the detail. Up-to-date situational awareness enables effective decision-making.
- Develop realistic scenarios
Despite uncertainty it will be possible to develop scenarios describing a range of possible future outcomes. None of them will be precisely correct. It doesn’t matter how likely or unlikely they are provided they are credible based on your understanding of the situation. They should represent a range of possible outcomes and include the ‘worst case’ outcome you can realistically imagine. In time the actual outcome, determined by reality, will probably be a hybrid of some of the scenarios you describe.
- Determine your intent
The next stage is to determine your intent. This provides a ‘compass heading’ or broad direction of travel based on your beliefs. In typical strategy development processes leaders define and commit to strategic outcomes or end-states. Surrounded by high uncertainty, leaders don’t need to be precise, but should spell out the new situation, new realities, what they are planning to achieve and, critically, why it is important. Creating a goal that matters to everyone provides a single unifying purpose for your organisation. But it’s only worthwhile if it is realistic given the post-COVID opportunities likely to be available and your organisation’s capability.
- Screen your existing portfolio of strategic initiatives
Many businesses already have a portfolio of strategic initiatives, but these initiatives pre-date COVID, so review them against your new scenarios, deciding whether they should stop, continue or accelerate. Stopping activity is always tough but makes resources available for new priorities.
- Develop your playbook
A range of scenarios enable you to test where and how the business is most at risk and identify strategic actions most important for your long-term survival. Based on the assumptions you’ve made and your intent, the next step is to develop and validate some strategic courses of action (COA) relevant to a range of scenarios. Each will have advantages and disadvantages, different impact and levels of difficulty associated with implementation. These need rigorous examination to evaluate them, rule out any that are unrealistic and identify those able to be initiated irrespective of the scenario. If your organisation has time and resources, COA should be stress-tested in a ‘socially distanced’ desktop operational rehearsal to assess their effectiveness.
- Support effective decision-making
Decisions about which COA (or combination of COA) should be followed is generally vested in senior executive teams; they are briefed by forward planners. To drive effective and timely decision-making the team should identify the critical information required to confirm which scenario is playing out. When these indicators are observed they trigger executive decision points.