Written by Alistair Wardell, Head of Restructuring (South), Grant Thornton
Stock Markets are falling, furloughing, a word until recently unknown to most, has firmly entered the vernacular and all manner of large, medium and small businesses are warning they may not survive – no industry is unscathed, even the current success of video conference companies will surely be plagued by high risk cyber concerns sometime in the future.
For company personnel, staying isolated, working out in their garage and going goggle eyed over net-flicks maybe a welcome escape from the incomprehensible commercial climate in which businesses are trying to operate. For CEOs, FDs and company boards, however, this is not a choice.
Such is their role, the burying of heads in sands would be untenable; instead they must rise to the occasion and despite the unprecedented circumstances, find strength, composure and confidence to ride the continuing waves of uncertainty facing their businesses.
Good leadership is crucial in times of trouble, as evidenced by some of the greatest – Winston Churchill, Mother Theresa and Nelson Mandela immediately spring to mind but there are other lesser known outstanding leaders from whom we can learn important lessons.
My Easter reading (on the basis that a planned coastal trip is clearly cancelled) will be Lessons from a Warzone: How to Be a Resilient Leader in Times of Crisis, a well-timed delivery from Louai Al Roumani, offering guidance and advice for crisis management.
From 2011 – 2015, he was the Head of Finance and Strategy at Banque Bemo Saudi Fransi, the largest privately owned Syrian bank and reading in the Times this weekend of how his day-to-day role involved dodging mortar bombs, living in fear of kidnap and managing branches blown to smithereens and raided by jihadists, whilst maximising shareholder returns, I feel he might just know a thing or two on living through a crisis.
Indeed, the Times feature on his book resonated with many parallels we are witnessing in this new global environment, as governments and businesses struggle to deal with the daily consequences and damaging effects of Covid19.
Whether your concerns are liquidity, people, customers, suppliers, operations, technology or regulatory, successfully operating in these unpredictable times requires critical thinking:
- I see leaders having three principal roles – the manager, the visionary and, bridging the gap in between, that of the corporate entrepreneur. Does your leadership style reflect these characteristics? When calamity strikes, crisis management can often overtake a leader’s ability to maintain this triple identity. Strong leaders are able to carve out sufficient time to step back and look at the long-term position for their organisation, ensuring short-term decisions are not detrimental to future opportunities which may arise when market conditions evolve.
- Nevertheless, experienced leaders seek to adapt/maintain a sustainable and profitable business model. They know the prudence of building financial reserves, through measures such as cutting non-essential expenditure and securing additional funding lines, as early as possible so if difficult times arrive then, should the current restrictions become protracted (as they likely will), they have sufficient headroom and more time to consider the most commercially viable way to respond.
- As a leader, are you equipped with the right skills and information to learn and adapt faster than the rate of change in the market? Forward thinking leaders are capable of outsmarting disasters. Despite unforeseen changes they recognise the importance of adapting the resources of their business to ensure that talent and skills are redeployed quickly, retraining where necessary, and adopting a flexible approach to scale this delivery in accordance with prevailing market forces.
- Strong leaders recognise the benefit of harnessing discretionary effort and they avoid short term gains that could have a negative impact on stakeholders. Instead, they adopt a different approach, demonstrating their ability to value people, suppliers and customers and forward managing these relationships carefully and sympathetically. How hard are you working to foster internal and external relationships that are going to allow your business to have the ability to sustain trading now and deliver new ambitions in the future?
- Specifically, as a leader how will you communicate effectively within your organisation? This is a time when your people need clarity from the top and strong, honest leadership will be a game changer. You need an effective two-way communication process in place that allows you to disseminate information and also gather feedback. People, during these difficult times, are looking to their employer for reassurance, security and social interaction. How you respond now could be lifechanging for your teams and will build loyalty and trust that could never be bought.
- Forward thinking leaders understand that the time is right to put aside competitive advantage and instead adopt a cohesive approach. They recognise the value of collaboration with other leaders in their market – sharing intelligence and insights together with support and friendship. Leadership can be a lonely if you don’t know where to seek help.
Covid19 is causing multifaceted levels of concern, across personal, professional and commercial landscapes but despite the current adverse conditions we are operating in there will be future opportunities, new innovations and different scenarios to be explored and addressed. Leaders know this and they know that when a crisis strikes, whether it is terrorist driven, health related or a natural disaster they must be ready to execute a turnaround.
What better way to finish this article than to highlight another recommended book from one of Grant Thornton’s own recognised experts – Turnaround Leadership: Making Decisions Rebuilding Trust and Delivering Results after a Crisis, by Shaun O’Callaghan. This book gives readers the tools to make the right decisions after a crisis, communicate those decisions effectively and deliver results. Sorry I don’t have any signed copies to give away, but I know a man who can.