By Kim Matalon and Paul Nanson, senior advisors to the SH Leadership practice
The Covid pandemic has disrupted organisations everywhere, in every business and every country. Yet history tells us that, though this crisis has been unique in scope, major disruptions are the rule rather than the exception. From economic recessions to the global financial crisis of 2008, to the Asian financial crisis of 1997 or the bursting of the tech bubble, disruption is a major – and regular – part of corporate life.
Mary Meaney, Senior Partner at McKinsey, puts it well in a recent report:
“Leaders have seen that their companies have been able to operate at an unimaginable pace and with so much resilience and creativity. Now they’re asking, ‘How do we hardwire these behaviors into the organization so that we are stronger in the years ahead?’”
This is why it’s important for organisations of all kinds to use this opportunity to carry out a post-crisis reset.
What is a post crisis reset?
Broadly speaking, we can divide the pandemic response into three phases:
- REACT. Initially organisations were unprepared for Covid and were therefore only able to react.
- RESPOND. Eventually organisations developed strategies and ‘ways of working’ that allowed them to respond to the crisis.
- RESET. Now, organisations should consider ‘resetting’ for the post-crisis environment.
A reset means taking the opportunity to review how your organisation responded to the crisis, in this case Covid 19. It means reviewing what your organisation did well and where it could improve so that it can pivot faster the next time a challenge arises.
The key thing to remember is that the next crisis doesn’t have to be something on the scale of a pandemic or financial crisis. It could be limited to your industry, your business, or even your team. Take the example of the Danish football team’s match against Finland during the UEFA Euro tournament, when midfielder Christian Ericksen collapsed from a cardiac arrest.
The team has been through something out of the normal that has affected their morale and the relationship between team players and between the captain and the team. Now is the ideal time for them to check in on how they responded. What happened on the football pitch in terms of their leadership behaviours and team culture that they can build on, or change, for the next time something happens?
We hope nothing like that ever happens again. But something will happen to that team and they’ll have to respond to it. If they’ve taken the time to reflect and they’ve checked in on themselves, the next time they face a crisis they will pivot much quicker and react even more effectively.
What’s true for the Danish football team is true for organisations everywhere. A reset is a time out during which organisations can review their processes, behaviours, leadership, and culture, and learn from both the successes and failures. It’s also about making formal crisis resets a business-as-usual activity. This helps ensure an organisation engenders a learning culture and becomes more flexible, responsive, and nimble.
Learning from others
It’s always useful to look at other organisations that do this as a matter of routine – that have turned a reset into business as usual. We looked at the British Army which has been bouncing in and out of combat operations for the last three decades. Within it, units and formations have had to return from one operation, re-set, and then deploy on the next.
The Operational Deployment Cycle, as it became known, saw units go through stages and processes including:
- ‘Decompression’. A period to allow the unit time to reflect and acknowledge what it had just been through, and to help individuals adapt to ‘normal’ life.
- ‘Post Operational Report’ or formal review, which captured the lessons identified from across the organisation – what went well and where there was room for improvement.
- ‘Normalisation’. Time to reinvest in the basics and in particular the people.
- ‘Mission Specific Training.’ Working on those lessons identified and turning them into lessons learned.
Whilst the cycle took years to develop, eventually it meant that units could quickly reset and be better prepared for the next operation, often in quite a short time frame.
Which organisations can benefit from a reset
When they are in the public of private sector, every kind of organisation stands to benefit from a reset. This includes local authorities, civil service departments, hospitals, charities, SMEs, and huge multi-national corporations.
Why now is the perfect time to reset
Unlike some of the disruptions or crises of the past, Covid affected everyone. Every industry, every country, every business. Organisations are in the same place in that regard. They all face the same opportunities
On top of this, leadership and culture are topics that have come back into vogue, largely as a result of the challenges of the last 18 months. Before Covid, it was fairly common for organisations to look at business continuity planning as a tick-box exercise, with an emphasis on physical factors such as IT systems crashing. Culture was often an afterthought and leadership often left to those at the top without seeking buy-in from across the organisation.
This recent crisis has brought home to many organisations the importance of the connections between members of the team, including the relationship between the leaders and the led. Post pandemic, this connectivity will be particularly important as organisations strive to re-define themselves.
Companies’ future success now depends on understanding where they are, where their teams are and what needs to happen to support their strategic direction. This is particularly true now so many more employees are working from home.
The risks of not resetting
Many organisations are either looking to go back to the way things were pre-pandemic, or else looking to adjust to the so-called ‘new normal’. As we see it, both of these options are short-term, and fail to take into account some of the fundamental ways the world has now changed.
One key change is working practices – particularly hybrid working. Many employees are now used to a better work-life balance and won’t want to give that up, while others are crying out for a return to the office. Organisations are now grappling with how to approach this, including consulting their people on the best ways to move forward.
Due to remote working during the pandemic, employees have also got more used to making decisions for themselves. Many businesses have realised there are potential benefits to this empowerment and are looking at ways to formalise this going forward.
The post-Covid emphasis on leadership and culture we’re seeing includes organisations focusing more on softer skills like empathy, authenticity, and transparency. They have to care about the social fabric of their organisation and the broader ecosystem within which it operates.
Related to this, with all the talk of ‘build back better’ from policy makers, as well as the changing expectations of employees and consumers, companies are increasingly shifting away from their traditional focus on shareholder value towards stakeholder engagement. They now feel more pressure to focus on the climate, their carbon footprint, and their supply chains, as well as needing to have a response to issues such as Black Lives Matter and or MeToo.
The fundamental nature of leadership and management has changed, and there’s no going back. Organisations that refuse to engage with this evolution may well find themselves falling behind.
At an operational level, firms that choose not to examine what worked well and what didn’t during this last crisis risk repeating their mistakes and failures. Worse, they risk not even building upon what they did well. On top of this, they will miss the opportunity to demonstrate the importance of a learning culture first-hand, which helps to build employee trust.
Key challenges organisations will face when attempting to reset
No organisation will benefit from attempting a reset if they approach it with the wrong mindset. Your whole leadership team needs to be open to understanding not just what the organisation as a whole did well and did badly, but what they themselves did well and badly. They need to accept that processes and behaviours might need to change – including their own.
It’s also vital to ensure that everyone understands that looking back at past performance is not a means of apportioning blame for failures, but a way of understanding route causes and making adjustments as needed. This is about looking back with the purpose of looking forward and making positive changes.
Related to this is the key risk that organisations don’t fully grasp the purpose of a reset. Those who think it’s about getting back to the way things used to be – or adapting short-term to the new normal – will miss that opportunity to learn and pivot more effectively in future crises.
Finally, organisations also need to resist the traditional temptation to take action without taking time to reflect or to challenge their existing assumptions. Organisations historically judge themselves on pace – on moving, doing, delivering. They may see a reset as time-wasting navel gazing, and wonder whether it will be productive. To this we say that sometimes an organisation has to slow down in order to then accelerate in the right direction.
We all need some ‘decompression’, to take a moment to acknowledge that what we have just been through has been challenging. If you don’t slow down, events may well take you in a direction you never intended to go. You could be caught in an endless spiral of being reactive rather than proactive. When that happens, it often becomes impossible to change course.
The benefits of a post crisis reset
There’s a saying in the British Army. When everything’s going wrong and your troops are looking to you to make a decision under pressure, that’s the time to ‘take a knee’. This phrase has a different meaning today, but for the army this means taking a bit of time out to think through and order your thoughts when chaos reigns around you. We’re in a take a knee moment now as organisations emerge from what we’ve been through.
The more time an organisation takes reflect and think, the stronger they will be going forward. They will make better decisions as they get back into the fight.
Of course, there is a real bottom-line impact to resetting. McKinsey published a report analysing the global financial crisis of 2008 which showed that the companies in the top quartile enjoyed cumulative total returns that were 20 percentage points higher than their peers.
Even more interestingly, the report proved that eight years after the crisis, those 20 percentage points had increased to 150. The point is that the competitive advantage compounded over time.
Resetting after a crisis is not just about who gets out of the gate the quickest. It’s about who can lay the foundations for consistent, sustainable business growth that puts you ahead of your competition. That’s what’s at stake now, and why taking the time to reset will literally pay dividends in the years ahead.
Find out more about how to apply a post-crisis reset in your organisation, contact email@example.com.
About the authors
Paul Nanson served 34 years in the British Army, finishing as a Major General. He served on operations all over the world including Northern Ireland, the first Gulf War, Bosnia, second Gulf War, Iraq and Afghanistan. And he has a broad experience of leading change, be that multiple deployments on operations or more recently, leading the Army HQ working with Capita to achieve a turn-a-round in recruiting performance from 50-100% in less than 18 months. Latterly, and as Director Leadership, he helped change leadership behaviours across the Army by introducing a new leadership Doctrine and Centre for the study of leadership.
Kim Matalon is an executive coach and talent practitioner, spending the last 15 years as the Head of Leadership, Learning, Talent and Culture at Barclays International, where she worked with senior leadership to develop and lead many talent-oriented functions to drive excellence into and through their people offering. She has built and transformed critical global functions such as culture assessment and transformation, global recruiting, leadership development from entry to C-Suite, critical talent and succession planning, performance management, and diversity and inclusion. Prior to Barclays, Kim was a strategic management consultant for 10 years with Booz Allen and Hamilton. Passionate about unlocking the potential within individuals and organisations, she is currently consulting with clients who want to scale up their enterprise with a strong people-oriented and inclusive culture.