If you follow the current reports about the economic consequences of the Corona crisis, two main narratives can be identified. The first is that of a threatening wave of insolvencies. It is primarily affecting companies in the gastronomic, tourism, and events sectors, which are suffering the most under the new measures to contain the pandemic. The Association of Gastronomy expects one-third of businesses to close permanently in the coming weeks. This narrative is defined by fear, desperation, and the feeling of helplessness in the face of the circumstances.
At the same time, another narrative can be observed. It focuses on the possibilities and opportunities that the current crisis is creating. The assumption: When things, as we know them, disappear, new things inevitably emerge – and set progress in motion. This narrative is defined by curiosity, courage, and the feeling of being in control of the new situation.
Both narratives are justified. Neither is wrong, better or worse than the other. Every closed business, every threatened existence, every loss of creative space and identity that is created by small, owner-operated businesses, is tragic in itself and deserves to be seen as exactly that – a tragedy. There is no doubt that the government must help when people are pushed into existential need.
However, we need the second narrative to move forward. We must look ahead. Only if we are able to see the current situation as an opportunity, can we muster the strength and mental fortitude to jump into action and get creative. Although many businesses are currently facing huge challenges, many of them still have some wiggle room. It is up to them to use it.
“Resilience” is the word of the hour. The ability to withstand external influences, to embrace change, and to carry on, even under new conditions. Again and again. Because digital transformation has merely begun and is just one of many complex global developments with climate change being the front runner.
How can companies increase their resilience? How can they spring into action even in times of great uncertainty? – We have put together five essential steps for you.
1. The foundation: People & Purpose
The easiest way to get active is to know why and what you are doing something for. Understanding what motivates an organization, especially the people within the organization, is essential. Your own purpose stays the same, even when the surrounding parameters and processes fundamentally change. The same applies to a strong culture of interpersonal relationships. Organizations in which the individual members have strong relationships are not easily shaken up. “Vulnerable Leadership”, a leadership style that relies on being open, listening, and asking questions, that allows mistakes to be made, promotes a culture of cooperation at eye level, provides security, and motivates people to go ahead and try things out.
2. The reflection: Just new skins or new wine too?
If your products or services no longer make sense under the new circumstances, the time is ripe to critically examine the underlying business model. In times of crisis, the consumer’s behavior will not only reveal their most essential needs and what they will miss if they can no longer obtain it, but also what they can very well do without. Products and services disappear from the market, others adapt to the new conditions, even if that means a complete overhaul of the business model. In his new book “Werdet WELTMUTFÜHRER” (“become WORLD COURAGE LEADER”) Philipp Depiereux lists the questions organizations should be asking themselves right now:
- “Do I have the right business model to survive the next five or ten years?
- How can I facilitate digital exchange and doing business with new and existing customers (…)
- What changes do I need to make to my business model to be able to contribute to the social and ecological challenges facing the world?
- How do I need to adjust my organizational structure, way of working and innovating to keep up with new digital competitors and rapidly changing markets?”
In the start-up scene, which has also been hit hard by the crisis, this type of realignment is known as “pivoting”. In this process, the vision, purpose, and culture of the organization are retained, while undertaking a radical change of course in terms of product, target group, and sales channels. Tandemploy has also successfully pivoted: instead of a job-sharing portal for applicants, we are now developing talent marketplace software for organizations. With this move, we are not the exception, but the rule. World-renowned companies have completely repositioned themselves in difficult times:
- Twitter – from podcast platform to microblogging service
- Groupon – From donation portal to voucher provider
- Starbucks – From shop for coffee machines to stylish coffee house
- Apple – From computer accessories dealer to computer giant
- PayPal – From PDA security software to payment service provider
They all once faced the dilemma of how to implement their vision under new circumstances, to what extent they would have to adapt their product, and how they would have to reposition themselves and their teams to best achieve their goal. Did this step into the unknown frighten them? Did they have doubts? – most certainly. And yet they went ahead and tried it, knowing that adhering to the existing business model would have far worse consequences. In his keynote on the topic of “resilience” at the HR Technology & Conference Expo, Marcus Buckingham, New York Times bestselling author, put it very nicely: “We do not need leaders to sugarcoat things for us and pretend things are going to go back to normal. (…) What makes people feel better is reality. (…) If we know the changes that are going to happen at work, we’re not only fine, we’re better. We’re stronger.”
3. Be flexible: learn from Start-ups
Young companies, especially in the tech sector, are known for their open structures and short innovation cycles. They usually cope well with changing conditions, often even see them as a positive incentive to tailor their product even better to their target group. Established organizations can learn a thing or two from this to prevent getting stuck in crisis mode in the first place and instead forging a path to new beginnings as quickly as possible.
One possible approach is the “Effectuation Method”. In contrast to traditional management, which endeavors to predict and plan the future, the Effectuation Method is based on the assumption that the unpredictable will happen and that it comes down to staying flexible and responsive.
What makes this method especially attractive in the current situation, is the focus on what is available now, on the accessible resources and means. After all, most organizations still have their most valuable resource: their employees. They are the starting point for positive and proactive change. Now is the time to move forward together, to look closely at the talents and skills that are already available in the organization and how they can best be linked together to make a fresh start and take charge of the future.
Besides higher level methods, such as effectuation, there are many tools and work hacks from the start-up world that companies can use for their own benefit. A small selection:
Lean-Start-up: Keep processes as simple and manageable (lean) as possible, eliminate unnecessary hierarchies and approval cycles and test products on customers repeatedly during the development phase. This requires that managers trust in their employees’ skills and judgement and give them sufficient room to maneuver.
Think in roles: There is an area in the organization that is very important but doesn’t fit into any existing job profile? Then you need new profiles! What applies to product development should also be used as a rule for collaboration within an organization: maximum user focus. Do you need someone to facilitate the introduction of new digital tools in the company? – Appoint a “Digital Officer” or a “Miss Digital”. You want to highlight the topic of “healthy eating” in your employees’ daily work routine? – Appoint a “Chief Vitamin Manager” or a “CHFO” (Chief Healthy Food Officer). Each role should have a description showing the responsibilities and tasks that come with it, which all employees have access to.
Test, test, and test some more: In times when you don’t know today what will be next week, it is more important than ever to be connected with your target group. Even if the product isn’t perfect, companies should make it accessible to people. User feedback is an essential ingredient for the continuous development process. Experimentation should also be encouraged within an organization: Ask your employees how they work best at the moment, what they need to be as creative and productive as possible and then go ahead and test suitable collaborative (digital) working tools together with them.
4. When things work out: Strengthen the foundation
What builds strength and resilience for an uncertain future? – Irene Montero, the Spanish Minister of Equality, has a clear answer to this question: equal pay for equal work, regardless of gender. The corresponding decree was issued promptly. The minister sees this as an important step against an economic crisis. In Spiegel Online she is quoted as follows: “To recover from this emergency situation, women have to be paid the same as men for equal work.” Companies who value equality, diversity, and openness towards all people and lifestyles are more likely to emerge from this crisis stronger. Ultimately, they are much more likely to create products that appeal to many different kinds of people.
5. Last but not least: Become a network organization
Social distancing rules have shown us once more that people are social beings. Our quality of life and work is largely measured by the quality of human interactions in our day to day life. Good relationships make us happy and resilient, even in the face of setbacks and austerity. Investing in strong relationships among employees is therefore an investment in the future. Exchange, joint learning formats, and interdisciplinary teams are among the basics of a modern network organization.
In conclusion: In order to master the crisis well, we need a realistic, optimistic, and future-oriented narrative. One whose goal is not to return to the “old normal”, but that focuses on the changed conditions and new opportunities, that relies on strong human connections despite social distance. There are many great examples of how people and organizations have emerged from crises stronger than before. Let’s take these as inspiration, without forgetting those who have fallen into existential need because of Corona.
A brief overview of our five milestones on the path to a more resilient organization:
- Build a foundation: People und Purpose
- Reflect: Check business model and pivot if necessary
- Be flexible: learn from start-ups
- Strengthen the foundation: Promote diversity and equality
- Become a network organization: Strengthen internal and external relationships