Leaders around the world are in a “psychologically fragile” state as they ponder the prospect of a second wave of Covid-19, according to new research from Gartner.
Based on a global survey of 131 senior executives in multiple industries, the business intelligence and advisory firm ranked a second wave as the top emerging risk to corporates, replacing outdated strategic assumptions (which News & Views covered in the weeks before the pandemic broke).
Indeed, that risk no longer figures in Gartner’s Top Five at all, with topical factors such as the US Presidential Election and forthcoming US-China trade talks edging out more traditional areas of concern.
Just behind the second wave in leaders’ list of worries is the new working model the pandemic has necessitated, while in third place are the strategic corrections that firms have had to make to contend with the virus’s commercial impacts – so Covid-19 and its broader effects are clearly dominating senior managers’ thoughts.
Speaking on behalf of the firm’s Risk and Audit Practice, Gartner vice president Matt Shinkman said: “The concerns about a second wave of the pandemic reveal the psychological fragility of most business leaders heading into summer. Executives have been grappling with reopening strategies, complicated by different stages of the coronavirus in different regions.” (Gartner, 17 July 2020)
Somewhat ominously, Shinkman noted: “It’s now becoming clear that a ‘re-exit plan’ will also be a required part of any such strategy” – hinting that leaders must consider how they may need to reverse out of recovery again, even as they gear themselves up to pursue it.
Outlining his thoughts on how firms should cope with the new working model, Shinkman advised that employees and customers alike will require psychological guidance and encouragement with how to act in this changed environment.
Turning to strategic corrections, he highlighted the dangers that could arise from two potential missteps: i) overcorrecting, and ii) failing to take into account regional differences in working conditions – both of which risk hobbling any attempt at a robust recovery.
In Shinkman’s view, risk managers could play an important role in helping leaders contend with both the new working model and the strategic corrections. However, which sorts of behaviours and skills should leaders themselves harness to deal with these uncertainties?
The Institute of Leadership & Management’s head of research, policy and standards Kate Cooper says: “We must remember that it’s not only Covid-19 that we’re uncertain about. Yes, there are concerns about whether a second wave will happen, when it will unfold and in which geographical or national regions – and, indeed, what the global and local economic impacts could be. But fundamentally, the future is always uncertain. And when it comes to managing risk, we know as leaders that we will always have to respond to things we didn’t expect – be they black swans, as coined by Nassim Nicholas Taleb, or ‘grey rhinos’, explored in the work of Michele Wucker.”
Cooper notes: “That sense of constant, looming threat from something we haven’t thought of yet is often the hardest thing for the keenest strategic planners among us to understand. One solution, as risk managers would typically advise, is to find ways to spread or hedge that risk. But for me, there are two, big factors that emerge from this territory:
“Firstly, there’s the trust that leaders have placed in their staff at a time of widespread home working, which had to be arranged at very short notice. Leaders must grasp that the trust they have invested in their employees since the start of lockdown doesn’t just apply to working from home. Trust your staff to work more independently than you would once have deemed necessary. Trust in their ingenuity, and their ability to respond at speed to rapidly changing circumstances. Keep in mind that it wasn’t artificial intelligence or management software that came up with solutions to the problems that Covid-19 presented – it was the people who work in our organisations.
“Secondly, when we turn to how we should manage these seemingly unwieldy events, I’m reminded of that old adage, ‘Think globally, act locally.’ You cannot control what goes on in Kuala Lumpur from London. But you can trust your people in Kuala Lumpur to know how to respond to the events that are affecting them. Just as flexible working should be applied only to the points where flexibility is required, rather than enshrined in some blanket policy, we must trust the people who work for us to know how to respond to their own context.”
For further insights on the themes raised in this blog, check out the Institute’s resources on developing strategy and evaluating risk
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