Leading through COVID: 7 - Balance short-term & longer-term thinking

Welcome to this 5-minute 'deep dive' on the seventh of 8 recommendations for those leading through these challenging times. If you've come straight here, without seeing the summary of all eight, you'll find it here.

Depending on where you're at with your own response to COVID, you might choose to focus more on some recommendations than others. That's fine. They're all connected, but they're designed as standalone 'modules'. Huge thanks to Claire Davey at CD-Performance for her contributions and support.

Before covid, most leaders, teams and organisations were already under-attending to the longer term and bigger picture. There is a huge risk of that pattern being exacerbated under current circumstances. However, as you may have seen in Recommendation 1: many normal rules do still apply. Thinking beyond what's right in front of us is definitely still business-critical, despite the lure of the here and now.

Indeed, a Harvard Business Review assessment of corporate performance during the past three recessions found that, of the 4,700 firms studied, those that cut costs fastest and deepest had the lowest probability of outperforming competitors after the economy recovered. We're reminded of Ernst & Young's Global Chair and CEO, Carmine Di Sibio - speaking alongside the CEOs and Chairs of BP, Barclays, Unilever and Dell. Like, Di Sibio has found that the more experienced leaders - those who've led through challenging times before - are better able to attend to both the short term and that longer time horizon.

We're also reminded of the fact that covid-19 is no 'black swan' event. Far too many people are treating it like a bolt from the blue that we could never have seen coming. It's not a black swan, it's a perfectly white swan that swam slowly towards us with its siblings ahead of it - SARS, MERS and H1N1 being merely the most recent. The reason it's hit us as hard as it has is because too many of us have been failing to lift our noses out of short-term 'do-do-do' mode to look at the horizon. Let us, please, not make the same mistake now as we made to get us into this situation.

Where the bigger picture is concerned, you only need to look at the news to see how much this one topic has squeezed out so many things that seemed really important beforehand and will continue to be important in the longer term. Brexit, for instance - such a huge deal in the UK for the past three years - has all but vanished now that covid has come to the fore. The bush-fires in Australia dropped out of British news long before the flames began to subside. And climate change is struggling for attention, barring news and fake news about the positive impact of remote working on smog and wildlife.

At the same time, when we're afraid or in shock, our vision narrows. Other topics simply don't seem relevant. We may need to wait to address some subjects with our teams until the shock has passed and the anxiety has settled. There might be little point having a long-overdue performance conversation with one of your team right now, if all they can think about is the virus and whether their elderly parents will be okay.

There's a flip-side to this, though. For many, a change of focus will be a welcome relief. The right topic will galvanise people and give them something to get stuck into. It'll give them a sense of being able to take some control at a time when it feels like the world has snatched control away from them. As you may have seen in Recommendation 2, that'll boost their mood and energy.

A tool to help us focus

One approach that helps us attend to the demands of the immediate present and those beyond in time and space comes from Professor David Denyer at Cranfield School of Management. At times like these, he says, being resilient at an organisational level means managing two important tensions, or 'polarities'.

The first is between a defensive or progressive stance, shown in the image below.

We'll get more into the pros and cons of these approaches once we've put the second polarity on the table. Suffice to say, the defensive stance is totally valid and totally understandable, although it can also be counter-productive. It's where we tighten up on cash-flow; down-size or furlough staff; reduce hours and/or pay; force staff to take 'holiday' while they're on lock-down. The progressive stance can be costly as it's focused on reaching out and focusing less on self-interest, but can also prove a wise investment.

The second tension, or polarity, is between ensuring 'consistency from the centre' and enabling 'front-line flexibility'.

Again, both poles bring value and protect us from the potential downsides of going too far the other way. Central consistency is often demonised as faceless, heartless concern for business over its people. I'd argue that it can be a genuinely caring approach, protecting people en masse by focusing on everyone's safety, security and stability. Local flexibility's way of caring is, perhaps, to attend to higher order needs - our need to feel that we matter as individuals and that our organisation trusts us enough to let us make decisions. We need both types of caring at all times, but most of all when times are hard.

As David points out, where we fall on these two axes determines which of four approaches we're pursuing with greatest energy at this current time.

Unsurprisingly, David's research supports the common sense notion that, as a crisis evolves, we need to shift which of the four approaches we’re majoring on - while remembering to still attend to the other three. Hence Alan Jope, CEO at Unilever, sharing that when covid-19 first arrived the leadership team committed quickly to no one losing their jobs - it's part of their mantra that, if they look after their people and the wider ecosystem, then their shareholders will benefit in the longer term. Unilever then turned to the wider community, seeking ways to help with the response to the virus. Then, he says, they invested in managing the supply of products to their customers. Next came attention to cash-flow.

Preventative control

This is where we centralise certain policies and establish a 'command centre' that ensures consistency and efficiency. We decide what’s non-negotiable and work out where the cash will come from to keep us afloat. We take preventative steps and make contingency plans. For instance, we plan to avoid whole departments becoming submerged by additional workload and have a backup plan if they do. We protect against critical staff or whole leadership teams becoming simultaneously ill, and have a backup plan if they do.

This is essential work, particularly in challenging times. However, it can come across as impersonal and controlling, so preventative control needs to be done with humanity. If it isn't, it'll affect morale and potentially stir up rebellion. If people resist or sabotage those attempts to control, then the measures won't work and the command centre faces a difficult choice: relax essential controls or come down even harder and risk an all-out revolt.

It's important to bear in mind that preventative control is the immediate reaction of most organisations facing a crisis - at least, once they've accepted that crisis exists. That's understandable, and often sensible. We just need to watch out for the tendency to stay here and become increasingly rigid. Organisations that over-egg this stance find their options become narrower and narrower, which eventually cripples them.

Mindful action

Playing defensively at a local level, with autonomy based on ground-level data offers us a great deal of flexibility and agility. It also gives people and teams that important sense of having a hand in their own destinies and being able to tailor central 'guidance' to their own specific circumstances.

In defensive mode, the dance between central control and local flexibility involves negotiation and friction around the best ways to offer autonomy while avoiding people overreaching their remit, skills or capacity - or inadvertently doing harm. The key throughout is being 'mindful', which takes us right back to Recommendation 1: being mindful and making conscious choices - both at the centre and on the 'front line'. Maintaining genuine, open and creative two-way communication will be key.

Performance optimisation

Performance optimisation includes getting our house in order (covered in Recommendation 6). As Deloitte points out, 'more than 200 of the Fortune Global 500 firms have a presence in Wuhan, the highly industrialized province where the outbreak originated' and which was hit really hard when the virus was at its peak in China. That may have been a far less obvious supply-chain vulnerability in 2019 than it is now, but times like these offer a real opportunity to hunt out similar risks and improve the way we're doing things.

Master Kong, one of China's a leading producers of drinks and instant noodles, optimised its performance by reviewing tell-tale data on a daily basis and adjusting accordingly. It predicted hoarding activity and the effect on stock in retail outlets. It preemptively upped its capacity for e-commerce and its attention to smaller stores. It tracked vendors' plans to re-open and worked hard to increase flexibility all the way down its supply chain. Consequently, HBR reports that that supply chain had recovered by more than 50% just a few weeks after the outbreak and Master Kong was able to supply three times as many stores as some competitors when the recovery began. 

The term 'never let a crisis go to waste' is close to a cliche already, but it's not yet as socially awkward as saying we should 'exploit' circumstances like these. Nevertheless, 'exploiting' is inherent in David's model and rightly so. Exploiting a crisis needn't mean exploiting the victims of that crisis. Frankly, the thought of it makes us sick. Instead, we'd counsel always looking for the opportunity in the challenges we face - no matter how horrid or difficult those challenges seem. A lot of organisations are booming naturally at the moment, without turning into ambulance chasers. Demand for webcams and related equipment have outstripped supply. People are investing more in bikes, yoga mats and other equipment for exercise. Home and garden items are selling fast, as are outdoor and indoor games. Reading material is in high demand and people are buying white goods and other electrical equipment. The list goes on.

The temptation is to assume we're not one of 'those businesses'. If that's where you're stuck, then maybe it's time to be more creative.

Adaptive innovation

In David's model, adaptive innovation is focused at the local level. Our Recommendation 5 offers four tools to help boost creativity in the teams you work with, so we'll not get too caught up in the nuts and bolts of adapting and innovating here. The word we really want to focus on when it comes to this fourth of David's four positions is 'imagining'.

What is the future that you and your team can imagine? This current challenge is forcing many of us to adapt in ways we probably could have imagined twenty or thirty years ago. We might not have thought it likely, but working from home en masse is hardly science fiction! Most of the habits and technology we're adopting have been around for a long, long time, in some form or other. Organisations have been collaborating creatively for as long as any human being can remember. Very, very few of the tools we're using to combat the virus and mitigate its impact are entirely new inventions.

It's fairly easy, then, to imagine a future that turns up the volume on some of the things we already have. We can look for the green shoots already emerging. For instance:

• How many meetings have you already cancelled, rather than switching to virtual, because they were never all that important in the first place?
• How much value is remote working creating that could continue to be created going forward?
• What are the positive changes in your connections with colleagues, clients, friends, neighbours that could extend beyond this ultimately finite period?
• What adaptations are you making now that, if you're honest, you should have made earlier?

None of those is particularly ambitious or imaginative. You and your team can do far, far better. To do so really effectively, though, you'll need sufficient trust and psychological safety in the team. You'll also want people to be okay with a bit of creative tension. You will disagree if you do this properly, and it's in that disagreement that you'll find the seeds of creativity that'll drive adaptive innovation.

One way to go further and truly imagine is to look beyond those green shoots in the present and work up proper scenarios for the 1-5 years ahead. Yes, that far - the most senior leaders in a lot of organisations have already been asking themselves what they want to be able to say about their response to this challenge when they look back on it from 2030. While none of us knows how the world might look in 2021, let alone 2025, there aren't really a multitude of entirely different options...

Attending to the future

Many people and organisations are already imagining the world and workplace of the future. Whether things are changed forever or drift back to 'normal' remains to be seen. Much will depend on our individual and collective determination to take the best of these times and hold onto them.

Whether it's at the local level or as a central 'command centre', we'd encourage you to get together, virtually, and map out five different 'storylines' that run forward from the present. You'll probably come up with no more than five and it's probably best to either start with the worst or throw it into the middle, so you don't end on a downer.

Then, for each of those potential future scenarios, come up with the most creative, adaptive ways to respond. Recommendation 5 will help, but so will the concept of being 'antifragile'. As Nassim Nicholas Taleb points out in a rather divisive book: we have no word in English for the opposite of 'fragile'. We use words like 'robust', 'solid' or 'rigid', but 'fragile' means something breaks under pressure, so those words aren't really opposites. They refer to something being unaffected by pressure. For something to be 'antifragile', it would be positively affected by pressure. Plenty of things in nature are exactly that: our muscles, for instance, strengthen and grow only when we work them hard enough to break down the fibres they're made from. So, in what creative ways can your team make itself antifragile in preparation for each and all of those potential future scenarios?

Another great source of inspiration when leveraging and preparing for the future is 'Three Horizon Thinking'. There's a book on the topic and you'll find video here showing the idea applied to climate change. We use the practice a lot in our work and would highly recommend it.

Three final things to bear in mind when taking the progressive stance and attending to the future:

1. While some commentators caution that the underlying purpose of your team or organisation should remain non-negotiable in times like these, you may need to be a little more flexible. One way is to dig deeper into the 'why' of your current mission and purpose. For example, if your mission is to be the leading provider of tech in your markets, ask yourselves ‘why’ being the leading provider in those markets is important. What real-world purpose does it serve?
2. Drawing on the wisdom of the late Victor Frankl, when the world changes around us, we sometimes need to create a new place for ourselves - a new role and new meaning. Clinging to what (or who) we were, in a world where that no longer applies, sometimes only brings us pain.
3. It takes conscious effort to move from each of David Denyer's four quadrants to the others. You'll know full well that, even before covid-19, we never truly find time to step back and look at the bigger picture. We have to make it.

In summary, then, when it comes to balancing short-term & longer-term thinking:

1. In times like these, it's important to take a conscious approach to two polarities: a defensive vs progressive; consistency from the centre vs front-line flexibility
2. These two tensions present us with four ways of 'showing up', each of which has its pros and cons
3. We'll need to major on each of those four at different times, but we should do so consciously and without overlooking the others
4. Invest in collective scenario planning and Three Horizon Thinking
5. We'll never find time to attend to the longer-term and bigger picture; we can only make it

Thanks for the time you’ve invested, to step back from the immediate and attend to the bigger picture. Take care.

If you'd like to explore our 8 recommendations further:

You'll find links to each of the other 5-minute 'deep dives' below, and the original summary of all 8 recommendations here.

1. Be mindful and make conscious choices: five steps to keep your wits about you and steer clear of the palpable panic that's gripped many leaders and their organisations who are already making well-meaning but highly questionable decisions
2. Manage your own and others’ well-being: the best practical tips we could find, plus insight into the ways different kinds of people will experience the coming weeks - and how things will change over time
3. Use ‘virtual’ really, really well: we cover the 9 essential ingredients for getting maximum value when bringing people together on video. We're all already adapting quickly on this front, so this isn't 'Zoom for beginners'
4. Do remote working really, really well: Three Core Disciplines for leadership and team performance, expanded and applied to the world of remote working
5. Embrace and encourage creativity: four highly impactful and easy-to-apply techniques - one idea from one of these saved one organisation over £1m
6. Get your house in order: how best to invest for payoffs in the short, medium and longer term
7. Balance short-term and longer-term thinking: including managing those tensions with the help of a crisis management framework from Cranfield, and Three Horizon Thinking
8. Go beyond your normal ‘borders: including tips, benefits, mutually-sustainable virtual circles, and sources of inspiration