Chairmen and chief executives from companies in Hong Kong, Singapore and Italy share lessons from their crash courses in crisis management.
Seeking insights from companies that have survived the worst of COVID-19, due to being located in some of the earliest-hit places, management consulting firm Arthur D. Little surveyed 25 chairmen and chief executives from telecoms, transportation and utilities firms in Hong Kong, Singapore and Italy. The focus was on how the reality of the pandemic diverged from their expectations, and from their crisis management plans.
Several issues stood out: the problem of finding reliable information, the speed of the crisis, the unanticipated degree of disruptions to supply chains and partners, and the importance of talent retention. These are interrelated, since information about the fast-spreading and previously unknown virus has been subject to frequent change, and because it struck in many parts of the world simultaneously. This is in contrast to natural disasters, which tend to happen in isolation.
Karim Taga, Managing Partner of Arthur D. Little Austria and one of the report’s authors, noted that Asian firms generally seemed better prepared. Having endured and learned lessons from the SARS epidemic, and in some cases from recent civil unrest in Hong Kong, they were able to spring into action immediately, setting up “war rooms” within the first few days of the outbreak.
Addressing the first priority – the safety of employees and customers – requires laying out specific rules on social distancing and on procuring personal protective equipment (PPE). The latter has been a vexing task across regions. One company, however, was able to provide two months’ supply of surgical masks for employees and their families. Another distributed thousands of laptops to enable employees to work from home.
Operational continuity is the other top priority of crisis management, and in this regard, the efficiency trend of recent decades has not served companies well. Many have come to rely on tight supply chains, leaving them with fewer or even no alternative suppliers when existing ones are disrupted. One solution is to create internal backup teams to keep critical corporate functions going when the supply chain breaks.
Many chief executives found their leadership style put to the test. While they had been trained to arrive at decisions only after careful, data-based consideration, they suddenly had to take them at warp speed, due to the unpredictability factor. The tone and nature of their communications with employees and middle management has also had to adapt, in that it needs to be clear, jargon-free, and frequent.
Finally, many of the executives gained a new understanding of the need for talent retention, finding that “hanging on to key personnel is critical”, The Economist reports, to the interests of operational continuity and longer-term survival. The notion of employees as stakeholders, once the stuff of platitudes, has become the basis of a vital support system. Taga said he was surprised by “the human aspect”. CEOs “were really determined to look after their employees.”