Leaders are in a state of tension. Stuck between investing in employees, generating long-term value for shareholders, dealing fairly with suppliers, delivering value to customers, and supporting communities. Leaders willingly walk into this tension. In fact, in August 2019, 181 CEOs, including Jeff Bezos and Tim Cook, committed to the Business Roundtable statement that redefined the purpose of a corporation to promote ‘an economy that serves all Americans.’
While that commitment is all well and good during the longest-running bull market in 2019, CEOs must now choose how to balance the tension of stakeholder groups during our current pandemic. A recent survey found that the large majority of corporate leaders are considering some sort of financial action as a result of the outbreak. Many organizations are investigating other revenue streams, like restaurants that are now offering takeout or creating meal kits for customers. Others are looking to furloughs or layoffs to mitigate some of the financial strain. Leaders who are facing layoffs and furloughs are looking directly at the tension between stakeholders. Specifically, between employees and shareholders.
While we can’t (and shouldn’t) tell leaders how to make these very difficult decisions, we can offer some advice from our experience and conversations with clients and friends about how to handle the arduous decisions that are confronting them.
Make Decisions with Your Values
In the middle of uncertainty, there is one thing that leaders can count on – their values. This doesn’t just mean the words that are on their walls or in the employee handbook, but the real company virtues (as author and legendary VC, Ben Horowitz would say) that guide every decision.
At Credera, we’ve found that our four core values (integrity, humility, professionalism, and excellence) have been instrumental in how we weather this storm. In fact – these values are on the first page of our business continuity playbook to remind one another as leaders what we should go back to when decisions get tough. This is the most important part of making difficult decisions. Make sure they align with your values and then walk forward in compassion.
Seek Out Alternatives
In the best of times, leaders have a lot of opportunity to take their time making decisions and looking at all of their options. But the rapidly evolving nature of our current situation does not offer that luxury. We would recommend taking a page out of Chip and Dan Heath’s decision making book, “Decisive,” to avoid falling into decision making traps. Their first step in the process is to “widen your options.”
Looking at a variety of options can trigger creative alternatives in your problem solving process. One of our clients had to make the extremely tough decision to furlough employees. However, the executive took the initiative to work with the company’s vendor partners to ask them to consider his employees for any open positions. The kindness and focus that is displayed here is a great example of looking for different options to care for employees.
Other options can include strategic innovation to take the tools or assets you have and create something new. During the 2008 recession, Credera did just that. With the additional capacity available during the downturn, we turned our attention to building an open-source, e-commerce platform, Broadleaf Commerce. Eventually, Broadleaf Commerce became a standalone company and has been successful ever since.
Find Clarity in Your Strategy
Many organizations had a business continuity strategy in place before the virus. What many didn’t anticipate was the widespread and global impact and the speed with which market conditions have changed. It wasn’t just one country or location that experienced outages, or one product or aspect of business that was impacted, but the entire globe and all aspects of business, basically all at once.
During this melee, your executive teams will most likely be meeting daily and focused on creating new ways to do business if you are experiencing significant disruption. Organizations that can focus on their future strategy will find opportunities to invest or cut based on a clear plan instead of fear.
Product offerings may be different in the “new normal” post-COVID. But as the dust is still swirling, organizations that take stock of their assets (e.g., increased capacity, changed customer demand, and others) may be able to innovate to create a competitive advantage that serves them well into the future. EmployBridge, a Credera client and the U.S.’s leading staffing company, used the necessity to go online as a catalyst to transform their in-person processes to be all virtual. Not only will this transition help their clients and employees in the meantime, but EmployBridge will be more agile in the future.
Make Your Framework
Creating a framework to guide your decisions is more important now than ever. Consider leaning on your core values to create a foundation, look for other alternatives, and leverage a newly clarified strategy. This will create a guide for decision making that will be incredibly useful as we learn to navigate the increased demand for agility and innovation that will no doubt be the “new normal” for business.