The past few months have been unique in all of our lives. Leaders need to accurately predict what the changes that are currently underway (and will likely be in place for the next few years) will mean for their organizations – both in terms of the risks and the opportunities.
In this article, we provide our own view of what those changes will look like and four traps that leaders need to avoid in order to safely guide their organizations across the chasm to a brighter tomorrow.
The Landscape (Next 2-3 Years)
COVID-19 is gradually coming under control across the country with a general acceptance of the restrictions imposed by governments and a measured reopening of the economy both regionally and by commercial sector. A “new normal” is taking hold and, as with any change, there are winners and losers.
- Food Take Out/Delivery
- Any products or service that facilitate working from home
- Domestic pharmaceutical/medical manufacturing
- Manufacturing of basic food ingredients and home food preparation equipment & supplies
- Home exercise equipment as gym memberships decline
- Suburban real estate as work from home reduces the need to live close to urban work centres
- Home renovations
- Vacation expenditures on recreational vehicles, camping and cottage real estate
- Mortgage foreclosures as unemployment remains high as government support is withdrawn
- Personal and business insolvencies
- Sanitation supplies and equipment
- Infrastructure spending
- Social services
- Drug overdoses/clinics
- Community colleges as education becomes a short-term alternative to unemployment
- Sit-in restaurants
- Large gatherings – sports, entertainment, conventions
- Air travel
- Aircraft manufacturing, maintenance, supplies
- Travel to the U.S. (recreational and business)
- Public transit
- Ride sharing
- Fuel consumption
- Clothing retail and manufacturing
- Food/beverage service to restaurants
- Urban real estate, especially condos
- Commercial real estate
- Shared office complexes
- Green energy production
Unfortunately, the U.S. has had an overall poor response to the COVID-19 challenge due to a lack of leadership at the national level, despite excellent efforts at the state level in many cases, leading to contradictory messaging. Politicization of the issue and the equating of control efforts as a challenge to basic freedoms has exacerbated the problem. The plateau of new infections at a high level, without a steep decline, will inevitably lead to a choice between an unacceptably high number of deaths or the need for strict adoption of control measures. A forecast of 300,000 deaths by the end of 2021 is probable.
The “new normal” in the U.S. is more dynamic and evolving than in many other parts of the developed world because it has yet to stabilize. In many respects, the trends will be the same as in Canada, but delayed and magnified.
In addition, the election of Joe Biden and a Democratic Congress, and possibly a Democratic Senate, will lead to a multi-year review and reform process that will include:
- Election funding
- Public education
- Rebuilding of relationships with allied countries and international agencies
The scourge of COVID-19 in the developing world will get much worse before it gets better, leading to 3 million deaths worldwide by the end of 2021. The economies of developing countries will decline for several years and then plateau for 5-10 years. Part of this will be due to developed countries onshoring manufacturing and shortening supply chains, especially for critical medical and pharmaceutical supplies.
CEO Action Plan
CEOs need to consider the above and avoid the following traps in the coming months.
Not Adjusting Quickly Enough to New Markets
New opportunities are emerging quickly and need to be identified and acted upon. Even more urgent is the need to identify declining markets and resist the temptation to “status quo” through what might be a permanent shift.
Not Adjusting Senior Team to Match New Skills and Experiences Required
New ways of operating may require different skill sets and (more importantly) increased flexibility and ability to adapt. Not everyone will be successful in doing that.
Having good data is always important, but now it is absolutely essential to have objective and timely feedback on every aspect of a business to know how to adapt quickly.
ANTIDOTE: Strategic Plan Hierarchy
A renewed and refreshed review of the strategic plan hierarchy of Mission, Vision, SWAT, Objectives, Strategies and Action Plans will go a long way to keeping the organization focused.
- Grasping a Short-Term Advantage
Investing Heavily in a Transient Market
While it is important to be on the lookout for new opportunities as suggested above, there is a danger of over-committing resources to a sector that is only a short-term opportunity which will be heavily saturated by competitors.
Hiring Too Quickly and Not Carefully
Hiring key people quickly without careful consideration of all possible alternatives and without investing in a logical process can be quick and cheap but often not good.
ANTIDOTE: Long-Term Scenario Evaluations
The better approach is to survey new opportunities with a long-term perspective. Financial and human resources are best deployed with a multi-year view in mind.
- Flogging a Dead Horse
Failing to Fold ‘Em When the Writing is On the Wall
It is a proven fact of the human psyche that the fear of losing a given item or quantity is greater than the hope of gaining the same item or quantity. This tends to lead humans to prefer the status quo for longer periods than pure logic would advise.
Failing to Allocate Resources to Opportunities with the Highest ROI Expectation
An offshoot of the same “status quo” tendency can lead to sub-optimal investment decisions. A robust emphasis on data collection and reporting, as suggested above, will tend to remove the emotional element and make clear-headed decision making more likely.
Protecting Pet Projects to the End
There is no room for “sacred cows” in a turbulent environment where survival is uncertain and tough-minded decisions are critical.
- Settling for “Average” When “Superior” is Required in All Things
Especially When Choosing Senior Team Members
The impact that a team member makes (positive or negative) is directly proportional to their position in the organization. A poor hire at a senior level can do a lot more damage internally and externally than a misfire at a lower level.
Average is 50th Percentile – Shooting for 75% is a Minimum
Average is for losers. Set your compensation and hiring criteria to attract top quartile candidates at all levels. Constantly upgrade your approach to training, team engagement, communication and evaluation.
Passing Grade Is Not Enough When Dealing with Clients
The “new normal” will emphasize competition and give a clear advantage to those who can differentiate themselves by delivering a superior product or service and by making for an excellent customer experience.
Phone Systems, Website, Proposal Content and Appearance All Must be Excellent
A review of all aspects of how your organization presents itself must be undertaken with a critical eye towards the pursuit of excellence.
It is going to get rough out there in many ways. Flexible adaptation is the key. Some sectors will be more dramatically affected than others, but every organization needs to be keenly alert for opportunities and threats and to take early and decisive steps to maximize their potential for both survival and longevity.
Kathbern Management is an executive search consultancy based in Toronto, helping companies find the executives and senior managers who not only have the experience and credentials to fulfill their responsibilities, but also have the emotional and “fit” requirements that will enable them to be successful in a particular environment. We simplify the process and, through our deep research, are able to bring more and better candidates forward than would ever be possible through a do-it-yourself passive advertising campaign.
Contact us today for a free consultation about your key person search.