What opportunities arise for managers and companies
In the eye of the VUCADD* hurricane: the ongoing Covid-19 pandemic has transformed the business world at a breathtaking pace, offering audacious executives plenty of opportunities to experiment. Transformation experts Prof. Kathrin Köster, a faculty member of the WU Executive Academy, and Helga Pattart-Drexler, Head of Executive Education at the same institution, have analyzed the opportunities for leadership created by the current situation and the potential positive impacts for managers and enterprises.
Today’s VUCADD world has been discussed in both business and research time and again, with experts pointing out that we live in an increasingly volatile, uncertain, ambiguous, and diverse world. And by now, this has almost become an understatement. Overnight, the pandemic caused by the coronavirus has catapulted us into the eye of a VUCADD hurricane: “Suddenly, ‘expect the unexpected’ has become the new normal – the default setting for all realms of life. There is no need for further theorizing; this fact has already been vividly demonstrated by the current goings-on,” Prof. Kathrin Köster and Helga Pattart-Drexler say.
Combating the spread of the coronavirus has entailed drastic measures: people stay at home as much as possible and also work from home; the economy has all but come to a standstill. And there is no way of predicting how long this will last. Köster pinpoints the predicament: “The question is, how do we leave this state of paralysis behind?” “All of us can, collectively and individually, use this crisis to create a new and improved normality for society,” Pattart-Drexler adds. The two researchers expect “a collective leap of awareness.” They give credit to Heraclitus, who expressed the impermanence of the world in the phrase panta rhei, “but what we are currently experiencing is a gigantic acceleration: change is taking place at the speed of light.” Particularly the global dimension of this enormous transformation is a first: “At the moment, we are all going through the same things in fields where our experiences differed greatly in the past,” Helga Pattart-Drexler says.
*VUCADD: volatile, uncertain, complex, ambiguous, diverse, dynamic
The two transformation experts have observed that the Covid-19 crisis provides a boost of unparalleled force to the megatrends prevalent in today’s world of labor, creating a wealth of opportunities for enterprises and managers. This is underscored by the following 7 beneficial leadership effects produced by the coronavirus crisis, which Köster and Pattart-Drexler present as the result of their analysis:
Köster likens the current crisis to a gigantic magnifying glass. Procedures and behaviors that have never been questioned in the past are now being scrutinized. For instance, brave leaders revisit whether making decisions all by themselves is really a sign of strength and actually expected of them, or if consulting with others who have a different perspective might be a more effective way to lead. Novel leadership styles are gaining traction, Köster says: “‘New Pay,’ for instance, focuses more strongly on the emotional needs of staff members, which have been brought to the limelight as of late, offering aid in building resilience instead of just money. Another example is the 80-20 rule: employees take responsibility for allotting work time to projects they are passionate about (20%) and mandatory tasks (80%).”
At the moment, nobody can say what will happen tomorrow. Overnight, enterprises have had to reorganize their workflows to make them suitable for remote work and digital and virtual communication. Leaving the well-trodden path can always create a sense of uncertainty. However, the lesson to be learned here is that there is always something to be gained as well. “Uncertainty always opens up new space – space to be creative, bring forth new ideas, and develop new ways of collaboration,” Helga Pattart-Drexler says.
A 2019 Deloitte study showed that 97% of surveyed companies had already created the option to work from home. This impressive number becomes less so looking at the detailed results: at almost 40% of these organizations, remote work was an option only for a select group of employees. Eighty-five percent of companies were eager for their employees to physically show up at the office. This is likely to change post-coronavirus. For years, the trust-versus-control dichotomy has been a hot topic among managers in organizations, Köster explains: “Now, as decreed by law, companies had to take a leap of faith – and it worked.” The control that was “necessary in the business models of the industrial society is no longer needed,” says Helga Pattart-Drexler. Once the crisis has been overcome, we have to make sure we do not fall back into old controlling habits. “Now we need to reflect on how we have changed, providing evidence of the new work style’s advantages for all. No more theorizing,” Köster says.
Social conventions are also changing: “People are less prone to interrupting each other in a video call because they need to be able to focus more effectively. They are more attuned to each other and listen more closely than in a physical meeting,” Helga Pattart-Drexler finds.
As a result of social distancing and having been forced to make do with less, people are becoming more mindful of each other. There are increased efforts to express gratitude, which is, for instance, reflected in the respect paid to the people who are essential workers in the current crisis.
Due to the coronavirus, people now also consume and shop differently. “Home ownership and a garden are considered luxury topics. Now people greatly appreciate it if their colleagues ask how they are doing. This reveals what is truly important – values have shifted in a palpable way,” Kathrin Köster analyzes. Helga Pattart-Drexler agrees: “The current crisis is a chance to bring new values to the fore and actively question things that have been tolerated in the past: should a company using the short-time scheme really pay out dividends to its shareholders? Let’s engage in a proactive discussion of such questions. In the past, there was little trust, so a lot of control was needed. Sounds like it would be a good idea to change that, don’t you think?”
There will be very few enterprises that will come out of this crisis without a slump in their revenues, and some will even disappear. “We should not look at such cases as individual examples of failure but meet them with solidarity and view them as chances to learn how to grow as a society,” Helga Pattart-Drexler says. Kathrin Köster points out what the situation has taught us: our current economic system is not sufficiently resilient to crises. She emphasizes that it is key to recover from the shock of this realization and start experimenting. Staying open to learning new things and giving novel approaches a try is how new perspectives can be gained, Helga Pattart-Drexler adds.
To realize a new work and leadership style, you have to start with yourself. “For managers, it is particularly important to know their own needs: physically, mentally, and emotionally,” Köster explains, recommending that we focus on what she calls our “inner team.” In her book “United States of YOU,” she describes personality traits in an anthropomorphic way: Mr. Mind interacting with Buddy Body and Conscious Me (our inner observer). “We have so many resources within. Relying solely on reason, which was how things have been done in business so far, would amount to sheer waste.” What is more, being aware of one’s own inner diversity helps managers value people’s diversity more and, as a result, appreciate the individual inputs of all team members.
The two experts’ advice for managers is to reflect on these issues, really taking some time for this process in dedicated “coronavirus reviews” that consider mind and soul. As lockdowns continue, teams around the world are currently mastering highs and lows together, learning to collaborate in a more flexible and effective way. “What has gone well and what hasn’t? What can we learn from that and what can we do differently?” These are the questions we need to ponder now.
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