It is said that leading an organisation in a steadily growing market is relatively straightforward, and that leaders are truly defined by their decisions taken during more turbulent times – whether a declining market, unfavourable regulation or even a rare event like a market shock.
Well, there can be no more turbulent and shocking period than this current 1st quarter, as the Coronavirus negatively impacts all countries, markets, and organisations. I originally wrote this piece as guidance to the many young and dynamic start-up CEOs with whom I have recently met and exchanged ideas. In the midst of this crisis, I now realise that it is relevant to the most experienced leaders at medium-sized and large companies too.
The following thoughts are informed by my 30 years of leadership experience in one of the world’s largest corporations, having successfully navigated the 1997 Asian financial crisis, the 2001 terrorist attacks in the USA, and the 2008 global financial crisis:
1. This time will define you
Leading in unprecedented times will challenge you like never before. You will have to draw upon all of your resources: keeping calm while many people around you panic, thinking rationally in a sea of irrational behaviour, managing ultra-short, medium- and long-term priorities simultaneously, and showing maximum flexibility in adapting to a dramatically changing macro and micro-environment. How you react to these challenges will define you. You will be “judged” not only on the final outcomes, but on the path that you navigated to achieve them – the decisions you took, how you behaved, and how you treated people along the way.
2. Look after the team
This global pandemic is unprecedented. Even typing the words makes me shudder. As a leader, it is critical that you think about your team first. Their health and wellbeing – and that of their families – is paramount. In large organisations, ensure that all staff are accounted for; in start-ups or as a line manager, take a personal interest in making sure that your team is safe and feels supported. Showing basic human empathy and doing what is right for the individual are crucial.
3. Support your customers
If your organisation is feeling the turmoil, you can bet that your customers will be too, perhaps even more acutely. While securing your own organisation and team, remember to reach out to your key customers. Try to identify their pain points and reassure them that you are there to support. You will have to do this in a very short period of time – maybe during a truncated phone call or even by email, where details will be sparse. Reassurance during a global pandemic may be to guarantee business continuity, or to mobilise support to directly address these acute pain points – supplying more face masks and PPE, for example!
Or, as we have seen this week, you may have to completely re-focus your design capabilities and production capacity to manufacture ventilators, when your core business is actually Formula 1 racing. Mercedes, McLaren, Red Bull and Williams have all stepped up to the challenge, amongst many others. Do not wait to be asked! Several of my start-up contacts are now seeing how their innovations can be adapted to help in the NHS’s battle against Coronavirus. It is not being opportunistic; it is mobilising and supporting customers at their time of most critical need, and shows great adaptability.
4. Cut your cloth accordingly
This is not a sequential list. You will need to juggle customer and team concerns with the financial health of your own business. During and after any market shock (yes, plan for the aftermath too!), demand will reduce, dramatically in some cases. If you are in the airline & travel industry, you will have to cut deeper than businesses in the food retail, or healthcare supply chains. As a start-up CEO who may not have been in this situation before, what can you do? Firstly, you should seek advice from your lead investors and business mentors. If your funding is currently only from public grants (i.e. you do not have a VC investor to provide input), make sure that you have a good business mentor – probably through an accelerator or incubator organisation. If you don’t have this, feel free to reach out to me.
Essentially, you need to forensically analyse and manage your funding runway. How many months are you able to survive in this current environment? Try to rapidly understand the science and modelling behind the virus and your government’s responses. If you are UK based, the current authoritative publication is this report, led by Professor Neil Ferguson at Imperial College London:
In these unprecedented times, you should only work on what is essential to meet your already defined Commercial goals (these will vary depending on the nature of your business and development stage). For example:
- Completing CE Marking and/or other regulatory approvals; Supporting ongoing trials / studies which aim to provide the necessary data / proof points to substantiate your (clinical) claims and validate your solution; Continuing commercial pilots – as long as your customers are in a position to do so; Using the new capacity available (through not travelling or exhibiting) to work on developing your commercialisation strategy and go to market plans.
Cut all expenditure which does not help you get to revenue in the shortest possible time. Advertising and Promotion, although necessary in the long term, is the first expense to be cut in a large organisation. How does this translate to your situation in a start-up? Obviously staff costs are next. Again, this will differ depending on your size, stage of development, and funding situation, but the principle is the same: hiring staff who will not add short-term commercial value should be put on hold. As a CEO, you may have to look at taking a pay cut or inevitably losing some of the team around you. Your decision must be firm; your manner should be fair.
This is a rapidly changing situation. The clamour for the British Prime Minister to provide daily updates was because the general public wanted transparent, open, and direct communication. They also want to put their faith in the executive leadership and be led through these difficult times as safely as possible. This is no different for your staff, customers, and business partners. With most staff working from home, set-up a regular (even daily) communication rhythm – not only to update them on the current situation, but also to keep them focused on the new goals ahead. Keep customers updated of your progress in helping them to get through the next few months. Utilise your business network as never before, sharing ideas (and maybe even resources) in order to minimise disruption to your company.
Above all, look after your own physical and mental health. The road ahead will be long and unpredictable, but as CEO, you need to provide clear and coherent leadership throughout this chaotic time.
Director - Onyx AI