Putting a Face to the Ugly Math of this Crisis
The rollercoaster of the last few weeks continues. As the true magnitude of this pandemic begins to settle in, many of us are still adjusting to our new shelter in place and social distancing realities: working, schooling and socializing, all from home. Globally, we seek to normalize the present, while planning for an unclear, potentially tumultuous, and definitely different future.
But what, particularly for business, does that future look like? McKinsey’s optimistic projections show that even for the least impacted industries, such as apparel, the restart could be late Q2/Q3 2020. Although the full scope of COVID-19’s economic and business effects are still unknown, it is clear that companies will need to be nimble, adjust, innovate and, most likely, make some difficult strategy, budget, and staffing decisions.
We are all still grappling with the day-to-day changes and impact of this crisis. However, on behalf of their mission, users, and employees, leaders need to start looking ahead, with a clear vision, planning for their business and people strategy. This will set them up to act quickly when things begin to stabilize into a new normal pace, and the ripple effects of the pandemic begin to plateau or at least become more predictable.
As we work with our clients, we are finding that in some cases, the natural inclination is to focus primarily on the financial impact. However, our guidance is to adopt a more holistic approach that starts with the people, and includes the emotional toll, cultural impact, employee productivity and resourcing. The long haul of quarantine, social distancing, remote working, and most importantly, the real and perceived attack on the most basic rung of Maslow’s Hierarchy of Needs, will have short and long term effects on the mental, psychological and physical health of the workforce. How leaders balance the financial metrics with the fundamental employee needs will be a crucial differentiator on how to navigate these uncharted grounds.
The components of a holistic assessment include:
1. Impact on people
Understanding the impact on the employee base is critical, not only to understand what they are going through during this time, but also what they might be positioned to do when planning for the recovery phase. Leaders need to recognize the emotional toll the crisis is having on employees and the impact this will have on their ability to meet company goals. We recommend leaders start collecting this data now for the entire organization, as well as for specific roles, job functions and different locations. Consider:
Percentage of employee base directly affected by COVID-19, either themselves or immediate family
Percentage of the workforce not able to work at all due to COVID-19
Percentage of the workforce able to work remotely
Infection rate trends in countries/states/cities of employees
Average duration of employee incapacitation due to COVID-19 illness
Current productive capacity percentage and estimated duration of non-productivity
These numbers serve as a starting point for understanding how employees are doing, and can serve as insights into productivity, the ability to implement a full versus phased recovery, and/or determining realistic business goals for highly impacted functions or regions.
2. Employee Engagement
In many instances, employees can suddenly be juggling a few full-time jobs during this time of lockdown: e.g. their own employment, their children or being a caregiver. Given the stress of doing these jobs concurrently - and well - it is important leaders stay connected with their teams to understand how they are feeling on both the personal and work fronts. A quick pulse check using a short survey, even with a small sample size of employees, can be helpful. Surveying a subset of employees on a regular cadence will help gain insight on how the workforce is coping across different geographies, departments, levels of seniority, and if there are trends as the crisis continues.
Sample Pulse Survey:
Rate the following questions on a scale of 1 to 5; 1 = Lowest ; 5 = Highest
How well are you able to focus on your daily tasks?
Do you need to make any adjustments to your schedule to be as productive while working remotely?
Do you have a clear idea of what you need to accomplish this week?
Do you feel confident that you and your team are well positioned to accomplish your goals?
Are you receiving the support that you need from the company at this time?
3. Business Metrics and Projections
This one may be obvious. Business metrics that companies regularly track, including revenue, sales, growth rate and earnings, as well as any context specific metrics, are leading indicators of any slowdown caused by the crisis. During this particular crisis, especially in the current containment phase of lockdowns and social distancing, the impact of lowered sales and revenue, is pervasive for most industries. However, business leaders and finance teams should view these numbers, not as static, but rather dynamic, considering projections under different scenarios. Potential approaches to consider:
Projections under the best case, worst case and most likely scenario
Using the above to project business goals for the next 30, 90 and 180 days
4. The Leadership Team
The leadership team’s performance and preparedness during this time is mission critical. How the leadership team is faring during the heightened crisis period is an indicator for what additional support might be needed e.g., executive coaching, team development.
To help gauge the leadership team’s readiness, rate the following questions on a scale of 1 to 5; 1 = Lowest ; 5 = Highest
Is the leadership team aligned in their approach for how to tackle this crisis now and into future phases?
Is the leadership team able to communicate effectively with each other and make quick decisions?
Is the leadership team nimble and able to act quickly in the current situation?
Is the leadership team unified in their messaging to the organization, and do they communicate using shared language to cascade messages?
Does the leadership team show up for their teams as both confident and empathetic?
The above data is sensitive, and can be gauged from formal and informal sources. Consider informal conversations with leadership team members, direct staff, and/or managers of large teams.
5. Resourcing: Skills for Today and Tomorrow
Another crucial element of a holistic assessment is reviewing the organization’s current resources in terms of headcount, skill sets and in particular, employee support systems, such as counseling and Employee Assistance Programs. In other words, does the organization have the skills, knowledge, capabilities and training capacity needed in the coming months? Several clients we are working with are adjusting their hiring and employee learning and development strategies in response to this crisis, including a focus on manager development, so that managers can also provide much needed support. It’s important to understand the following:
Is the company resourced with the right skills, knowledge and support systems to take needed actions during the restore and recovery process?
Do the most impacted groups have the necessary skills and capabilities?
Do the teams that will need to adapt the most have the necessary headcount and related resources eg., training budget?
What are the attrition rates in different functions and regions during this period?
What are the hiring rates during this period?
This can be a targeted exercise, focused on specific teams that are most critical for this next phase. Conducting a skills assessment to gain insight into the capabilities will inform how the teams can prepare to successfully execute on a new strategy, in the immediate term, and also as the company scales over time in a new future.
In closing, in addition to all of the above, more than ever before, companies need to hold on to their core values like innovation, diversity, equity and inclusion. Leaders must have keen foresight, business acumen, empathy, and most certainly, openness. Innovation is central to any great transformation; leaders will need to reinforce an environment and culture where their people feel safe and ideas come from everywhere.
If you’re a business leader seeking a thought partner, guidance or recommendations on any of the topics covered in this series, please reach out to us at LetsTalk@peoplerunway.team.