The coronavirus pandemic is just the latest of an endless series of crises to hit companies around the world. And, like so many previous ones, it has exposed a serious lack of preparation by business leaders and supply chains. In this conversation with SupplyChainBrain Editor-in-Chief Bob Bowman, Niamh O’Keeffe, author of Future Shaper: How Leaders Can Take Charge in an Uncertain World, lists seven common mistakes that companies make when grappling with unexpected disruptions.
SCB: You have outlined seven common mistakes most leaders make when handling a crisis like the COVID-19 pandemic. What is mistake number one?
O'Keeffe: Thinking that there’s a rule book. Leaders want to be in control, but they have to realize that this isn’t a situation that they can control. It's about a shift from a control mindset to understanding that there’s a different leadership skill they need now — the ability to rapidly monitor the ever-changing situation, and come up with creative and collaborative solutions instead.
SCB: On the other hand, risk managers do like having some kind of document, plan or “war room” ready in the event of a supply-chain disruption. Are you saying that shouldn't be done?
O'Keeffe: The coronavirus is not a typical supply-chain crisis. It’s not an event-based situation like 9/11. It’s ongoing and changing. So it's not about crisis management as usual.
SCB: Mistake number two?
O'Keeffe: Not stepping back to see the bigger picture. This situation is temporary — we're talking about months, not years. We’re not deep in a hole; it's actually a tunnel and there’s light at the end of it. There’s the danger of not understanding that, of getting too much caught up in the moment of the event.
SCB: In this case, however, we’re looking at a serious and possibly long-term economic downtown even after the virus itself subsides. Don’t we need to be thinking about that?
O'Keeffe: Totally right. McKinsey has described it in a way I think is quite helpful, as three different states. There’s the “normal” of before the coronavirus, the “new normal” of the present situation, and the “next normal” when it ends. Supply chains need to think ahead. As an example, the ice cream delivery man realizes he's no longer in the business of selling ice cream; he's in the food-delivery business. Companies are altering their products, services and supply chains accordingly. All of that has implications for the next normal.
SCB: Mistake number three?
O'Keeffe: Not communicating enough. This is standard best practice in a crisis. You need to communicate more regularly than usual, and never cancel a communications event. We see governments holding daily briefings even when they have nothing new to say. They’re just reiterating the same points about staying at home, or they're praising healthcare workers and trying to raise morale. Business leaders need to take a leaf from that. And you should never withhold information. Also, decentralize decision-making down to the local level, because the people who are closest to the ground are the ones who can best respond at this moment.
SCB: Mistake number four?
O'Keeffe: Not asking for help. We’re all in this together — the whole ecosystem of government, community, customers, even the competition. This is the moment where you can collaborate and support each other to meet needs of the customer. That's a win for everybody, so not relying on your partners for help would be a big mistake. There’s nothing to be lost, and everything to be gained.
SCB: Mistake number five?
O'Keeffe: If at all possible, do not lay people off. You’re getting ready for the next normal, and you're going to need your workforce, so unless business survival is an imminent issue, I would say don't panic.
SCB: We’re now on number six.
O'Keeffe: Maybe this is stating the obvious, but do not ignore the impact of the crisis on your employees, your customers and your community. This is where your purpose and values of the organization are tested. People will ask, what are you standing for now? There’s the example of Diageo, which is converting alcohol into hand sanitizers in places like Africa. The point is, what can you do to help others? And how can you lean into that? This is a brands-and-customer relationship, an opportunity to show people who you are, and what you’ve done to harness the power of your organization to help them.
SCB: And finally, mistake number seven?
O'Keeffe: It’s a classic leadership mistake — not setting the right priorities. This links into some of the things I've said earlier, but in a crisis, if you’re not setting the right priorities, you're getting it all wrong. In a rapidly evolving situation, are you investing your resources in the right areas? Skills need to be constantly being refreshed. Are you setting the right priorities? And with new information, are you able to reset them? Often there ends up being so many priorities that nothing's a priority. Figuring that out is a skill that needs to be finely honed in this moment of time.
Timely, incisive articles delivered directly to your inbox.