After the crisis, leaders will refocus on the essential. But on what?

What do business leaders have in mind as the end of the crisis approaches? During the complicated period we have just experienced, they have of course thought about it, having to jointly manage a chaotic present and think about what their business will be after the crisis.

This crisis was for many a shock but also an opportunity to accelerate on issues, to implement things that they did not think they would do or not as quickly and therefore, the opportunity to learn about themselves, their employees and their customers.

What will remain of all this tomorrow? What will be maintained, extended, what will return to normal and what will be radically new in their post COVID world? That’s what the 2021 edition of the ever-interesting “IBM CEO Study”, entitled “Find your Essential, tells us, and I’ll comment on it here with a bit of a delay.

Surviving the crisis doesn’t mean you’re ready for what comes next

Before going any further, one might expect some relief from CEOs: those who have come through the crisis well because they are in a good position to benefit from the recovery and the others because the hardest part is behind them. But no.

As one study participant put it, “Just as war can stimulate military development, when the war is over, military technology must return to civilian uses. It’s all about the year after.”

In other words, the qualities that got us through the crisis are not necessarily those that will allow us to benefit from the recovery. What was done in an abnormal world must find its place in a world that will be, if not normal (but what is normal?), at least totally different.

A more agile, technology-driven business

Unsurprisingly, one of the lessons of the crisis is the need for agility. The businesses that have been the least affected by the crisis are those that have been able to adapt and pivot quickly. Leaders have accepted that changes, whether desired or not, will be numerous and rapid, regardless of their cause, and that they will have to deal with them rather than resist.

On the other hand, they are willing to embrace agility in a global but pragmatic way. Global because it is the whole business that is concerned and not only the IT side, and pragmatic because they have understood that agility for agility’s sake without business impact creates chaos without much value.

Being agile and adaptable also means adopting new ways of working such as remote work. The idea that yesterday’s leaders are not tomorrow’s leaders is gaining traction and they admit that they need to rethink leadership roles to drive a distributed workforce. It is clear that much work remains to be done to harness the full potential of remote work, and it is a task that leaders have realized they cannot afford to ignore.

From my point of view, it is certainly a Copernican revolution that is in the offing if this project goes ahead. We are talking about reinventing the way we work, leaving teams free to organize themselves, co-designing processes, in short, ceasing to protect the past. Is everyone ready to go that far? I don’t think so, and businesses will have to find the right people to go there, even if it means doing without the people who have helped them succeed so far.

But this agile and flexible organization cannot work without technology, and another lesson of the crisis is that unsurprisingly those that came out of it the best were able to rely on robust platforms that made new ways of operating possible and supported distributed teamwork. I note with interest the use of the word “platform”. So we’re not talking about a particular type of tool, but about the foundations, a scalable base that has made it possible to support both internal operations and customer relationship. Among the topics identified are of course the cloud but also IoT and artificial intelligence…but we’ll talk about that later.

The downgrading of marketing and HR

In this post COVID business the cards will be redistributed and they will be in favor of those who make this transformation possible.

As usual, when the boat is rocking, the finance department (CFO) takes the lead, the operations department (COO) is at the helm to change the operating methods and the technology department (CIO) comes in behind to give them the means.

On the other hand, I am surprised by the extent of the downgrading of the marketing (CMO) and especially HR (CHRO) functions.

As far as marketing is concerned, it is perhaps because we consider that the customer experience is more a matter of operations than of communication. I agree with this posture to a certain extent but before serving customers well, you have to acquire them and technology will not do everything.

Regarding HR, this is unfortunately what I have been sensing for some time. They were there to play the fireman during the crisis but their impact on operations and transformation is nil. They will accompany but will not play a critical role. I said it when commenting on the 4th employee experience barometer: hugging during a crisis is good but without impact on operations, it is quickly forgotten once the crisis is over.

But in terms of downgrading, as the study notes, it gets worse. In 2013 67% of CEOs named their chief strategy officer (CSO) as the second most important person after their CFO. That’s down to 6% today. The CSO is certainly paying the price for a more agile vision of the business: after all, why have a strategy if you can’t have a long-term vision and spend your time adapting. But strategy is not only about long-term vision, it is about giving a direction and a guideline, a kind of coherence. And the study doesn’t say otherwise: agility yes, but with objectives and a business guideline. Unless we now consider that it is the CEO’s responsibility to provide this guideline, which would be a fair return to normal. I’ve always considered CSOs the same way as Chief Digital Officers (CDOs): the band-aid of a CEO lacking vision. We’ll see if the future proves me right (by the way, the CDO has also disappeared from the picture as you may have noticed)

From all of this, 5 topics are considered essential by the CEOS: leaders, technology, employees, Open Innovation and Cybersecurity. I will focus on the first 3 here.

Good leaders make a difference

I often hear that only the execution counts, but it is important not to execute just anything and to succeed in bringing people on board.

According to the study, what makes the difference between the businesses that have done well during the crisis and the others is the impact of its management in two main areas.

First of all, in terms of strategic choices: some knew where they were going, others lacked a sense of priorities.

To be honest, I don’t make such a clear-cut analysis of this table, even though it shows that some people were trying to cover a lot of ground at once, while others had a guideline.

On the other hand, and this is not mentioned in the study, I am convinced that those who had priorities already had them before the crisis and that the crisis only reinforced them. On the contrary, when you enter the turbulence already undecided…

Another area where leadership mattered was the ability to engage others, employees or customers. We are told that the top 25% of businesses in terms of employee experience have a sales ROI that is double that of the bottom 25%. Meanwhile, the companies that “outperformed” during the crisis were 53% more convinced of the importance of giving meaning and mission to the business.

In short, for those who still doubt it, a business never succeeds despite its leaders and here we have one more proof.

Technology is more than just tools

If we look at where those who have performed well and others expect to see challenges in the coming years the difference is glaring.

While I agree that this would tend to prove that the more advanced have understood that technology is more than just tools, I’m not sure that this reflects a gap in vision as much as a gap in maturity.

Yes, thinking infrastructure can mean that we are beyond a gadget approach and that we think “global and scalable”. But to get to that point, I think you have to have tried, experimented and learned from it. In my opinion, the “outperformers” were more advanced in their appropriation process and had started earlier, whereas the others have not yet had the time to learn from their mistakes and form a guideline.

Hybrid work is not a given

There is a lot of discussion about what will happen to remote work, and how much of it will be done. According to the CEOs of the businesses that are “outperforming” it is a major issue for 50% of them, while the others are only 25% who feel the same way.

This can mean two things.

Firstly, some think that hybrid work has become a necessity, especially in an agile and flexible business, while others are more in favor of a return to the old norm. Secondly, some think that the game is far from won, while others think that since it worked during the crisis, it will work afterwards and that the subject is therefore closed.

I think that both options are true and that where some see it as a question of workplace (whether they are in favor of it or not), others see it as the transformation of an organizational model that will be anything but easy. Moreover, and this is confirmed by the study, they do not see it as a constraint inherited from the experience of the crisis but as an opportunity to be seized. We can think that they imagine attracting new talent, cleaning up operating methods that were no longer working in the office and that they have understood that just because things were done during the pandemic does not mean that they will be easily prolonged or that they should not be improved.

We can deduce from this that the model implemented during the pandemic has opened a way but has also shown its limits and that prolonging the existing will not be sufficient: the subject of the future of work remains open. We have opened a door, but the hardest part may still be ahead.

Last but not least, the “top of the class” are much more inclined than the others to favour the well being of their employees even if it penalizes profitability. We know that this will survive the crisis but it has certainly helped them to get through it.

Conclusion: a matter of vision or maturity?

My first opinion on this study is that it says more and opens more perspectives than the last PWC CEO Survey.

For the rest, we see gaps of a magnitude that I have rarely seen between the most successful businesses and the others. Often the difference between the two is only a matter of execution, but here there are clear differences in vision, understanding of the issues, and prioritization.

From there to say that in this complex and changing world some have understood everything and others nothing, there is only one step that I will not take. Yes, indeed, some have understood things naturally, some have the right vision in an innate way, but this does not explain everything.

On certain dimensions, and I’m thinking in particular of technology, businesses have been undergoing a transformation process since the 2010s, which accelerated after 2015. Some have been proactive, tried things and learned from their mistakes, while others have been more reticent and have been slower to take the plunge.

Some have had time to learn, others have not, and I think that the diagnosis made by this study reflects more a gap in the maturity curve than radically different biases. The misfortune of some is simply that the crisis arrived when they were only in a learning period.

Image : leader facing the unknown by jamesteohart via Shutterstock

Bertrand DUPERRINhttps://www.duperrin.com/english
Head of People and Business Delivery @Emakina / Former consulting director / Crossroads of people, business and technology / Speaker / Compulsive traveler
Head of People and Business Delivery @Emakina / Former consulting director / Crossroads of people, business and technology / Speaker / Compulsive traveler
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