News and Press | April 3, 2020
When you're responsible for the well-being of an entire organization, there's no such thing as an easy day at the office. That's truer than ever during these uncertain times, but the right decisions can help you not only survive, but thrive.
For many organizations today, it is far from business as usual. Those that have managed to continue operations while facing the realities of the COVID-19 crisis may be doing so virtually for some or all employees. Other organizations are being forced to make much tougher choices, affecting core competencies or their workforces. When faced with tough choices during uncertain times, business leaders should demonstrate sophisticated decision-making techniques, as well as deliberate and inspiring communications.
The best strategic business plans generally approach decisions by listing known facts and reasonable assumptions generally influenced by historic trends and experience. This approach is appropriate in stable business environments. When faced with unexpected or unforeseeable events, the number of unknowns generally rise and require different decision-making strategies.
Well-drafted business continuity, disaster recovery, and emergency response plans not only provide basic blocking and tackling for short-term urgent issues (e.g., initial response, damage assessments, employee mobilization, etc.), but also provide a framework for decision-making. This framework is especially helpful when the level of uncertainty is high or fluid. The COVID-19 crisis is a prime example of an unforeseen event that requires business leaders to make decisions with limited information and in a quickly evolving environment.
There are varieties of decision-making disciplines an organization can adopt, usually determined by risk tolerance and market norms. For example, when only a few outcomes are probable or the unknowns are limited, some organizations use scenario planning. These scenarios construct the various outcomes to best inform and prepare the organization should one of the scenarios materialize. Valuation models and game theory can help leaders run through these scenarios efficiently. However, when several outcomes are possible or more unknowns are present, more sophisticated forecasting models may be needed.
Developing, adjusting or refining the organization’s business continuity, disaster recovery, and emergency response plans to include various tools to support successful decision-making can be the difference between a well-prepared response that will enable a quicker business recovery, from unnecessary cost, time and business impact.
The best leaders inspire trust and demonstrate calm, agility, and proficiency while navigating uncertainty. The current health crisis is testing even the most seasoned leaders. Embodying these characteristics helps an organization remain focused on immediate priorities (those things necessary for the protection of people and critical business operations) while also preparing for future strategic and tactical realities resulting from the initial event.
Effective communication in times of uncertainty requires four essential elements:
Your people – as well as other stakeholders – will take the cues from you. It is essential that your messaging strikes the right balance between optimism and realism. When crafting these messages, ask yourself if they accomplish the following:
Woven throughout the communications should be encouragement for your people to focus on the mission, vision and values of the organization. A leader can generate goodwill by acknowledging the challenges of the new reality, being open about the inevitable twists and turns, and thanking employees and other stakeholders for their flexibility. With the right decision-making support infrastructure and effective communication strategy, your organization will follow your lead in even these most uncertain times.
An adapted version of this article appears in Chief Executive magazine.
This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.
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