Martin Reeves , Nikolaus Lang and Philipp Carlsson-Szlezak en Harvard Business Review.
The Covid-19 crisis has now reached a new critical phase where public health systems need to act decisively to contain the growth in new epicenters outside China.
Clearly, the main emphasis is and should be on containing and mitigating the disease itself. But the economic impacts are also significant, and many companies are feeling their way towards understanding, reacting to, and learning lessons from rapidly unfolding events. Unanticipated twists and turns will be revealed with each news cycle, and we will only have a complete picture in retrospect.
Nevertheless, given the very different degrees of preparedness across companies, the further potential for disruption, and the value of being better prepared for future crises, it’s worth trying to extract what we have learned so far. Based on our ongoing analysis and support for our clients around the world, we have distilled the following 12 lessons for responding to unfolding events, communicating, and extracting and applying learnings.
Events are unfolding with astounding speed, and the picture changes on a daily basis. Only several days ago, it looked like the outbreak was mostly confined to China and was being brought under control. More recently, a number of fast-growing epicenters of infection have sprung up beyond China, signaling a new phase and potentially necessitating new strategies of mitigation rather than containment. Our team initially decided to communicate updates every 72 hours, but we moved to a daily cycle, not only for updating data, but also for reframing our overall perspective.
News organizations often focus on what’s new rather than the big picture, and they sometimes don’t distinguish between hard facts, soft facts, and speculation. Yesterday’s news is likely to frame how your organization thinks about the crisis today. When exposed to fast changing information, be it a new technology or an emerging crisis, we have a systematic tendency initially to overlook weak signals, then to overreact to emerging issues before we eventually take a more calibrated view. As you absorb the latest news, think critically about the source of the information before acting on it.
In our connected world, employees have direct access to many sources of information. Leaders might reasonably conclude that there is so much information and commentary available externally that they don’t need to do anything additional. We have found, however, that creating and widely sharing a regularly updated summary of facts and implications is invaluable, so that time is not wasted debating what the facts are — or worse, making different assumptions about facts.
Experts in epidemiology, virology, public health, logistics, and other disciplines are indispensable in interpreting complex and shifting information. But it’s clear that expert opinions differ on critical issues like optimal containment policies and economic impact, and it’s good to consult multiple sources. Each epidemic is unpredictable and unique, and we are still learning about the critical features of the current one. We need to employ an iterative, empirical approach to understanding what’s going on and what works — albeit one guided by expert opinion.
A big-picture synthesis of the situation and a plan to deal with it, once captured on paper, can itself become a source of inertia. A Chinese proverb reminds us that great generals should issue commands in the morning and change them in the evening.
But large organizations are rarely so flexible. Managers often resist disseminating plans until they are completely sure, and then they are reluctant to change them for fear of looking indecisive or misinformed, or of creating confusion in the organization. A living document, with a time-stamped “best current view” is essential to learn and adapt in a rapidly changing situation.
Controversial, sensitive, or high-profile issues will typically attract review by senior management, corporate affairs, legal, risk management, and a host of other functions. Each will have suggestions on how to best craft communications, leading to an overly generalized or conservative perspective and a slow, cumbersome process.
Assembling a small trusted team and giving them enough leeway to make rapid tactical decisions is critical. Overly managing communications can be damaging when each day brings significant new information to light. Use the clock speed of external events as a guideline for pacing the internal process, rather than starting with the latter as a given.
A living digital document can enhance speed by avoiding the rigamarole of issuing and approving multiple documents, and also reduces risk, since it can easily be updated or withdrawn as necessary. Furthermore, distinguishing clearly between facts, hypotheses, and speculations can help in communicating a fuller and more nuanced picture.
Efficiency reigns in a stable world with no surprises, and this mindset is often dominant in large corporations. But the key goal in managing dynamic and unpredictable challenges is resilience – the ability to survive and thrive through unpredictable, changing, and potentially unfavorable events. Our research on resilient systems shows that they generally have six common characteristics which should be reflected in crisis responses.
Covid-19 is not a one-off challenge. We should expect additional phases to the current epidemic and additional epidemics in the future. Our research on the effectiveness of organizational responses to dynamic crises indicates that there is one variable which is most predictive of eventual success – preparation and preemption. Preparing for the next crisis (or the next phase of the current crisis) now is likely to be much more effective than an ad hoc, reactive response when the crisis actually hits.
Many companies run scenarios to create intellectual preparedness for unexpected situations. Scenarios must be updated and customized, however, in the light of the most material risks to a business at any given time. Those risks have shifted even over the last few days, with the rise of new disease epicenters.
Intellectual preparedness alone is not enough, however. Something can be well understood but unrehearsed as a capability. Scenarios should therefore ideally be backed up by war gaming to simulate and learn from behaviors under stress. A war room set-up, with a small dedicated team empowered to decide and execute, can cut through organizational complexity.
Rather than heaving a sigh of relief and returning to normal routines when the crisis subsides, efforts should be made not to squander a valuable learning opportunity. Even while the crisis is unfolding, responses and impacts should be documented to be later reviewed and lessons distilled. Rapidly evolving situations expose existing organizational weaknesses, like an inability to make hard decisions or an excessive bias towards consensus, which constitute opportunities for improvement.
For example, airline safety is one of the most effective global learning systems we have in this respect. Each time there is an incident from minor mishaps to tragic accidents resulting in lives lost, root causes are investigated in forensic detail according to pre-agreed protocols, and binding recommendations are made. It’s not surprising that flying has become one of safest forms of travel, thanks to cumulative learnings and adaptations from previous misfortunes.
We should expect that the Covid-19 crisis will change our businesses and society in important ways. It is likely to fuel areas like online shopping, online education, and public health investments, for example. It is also likely to change how companies configure their supply chains and reinforce the trend away from dependence on few mega-factories. When the urgent part of the crisis has been navigated, companies should consider what this crisis changes and what they’ve learned so they can reflect them in their plans.