COVID-19 is not just a major health care problem affecting countries worldwide; it is also having a devastating impact on business. To help leaders manage the challenges facing their organizations due to the pandemic, I recommend a customized one-day workshop following the VUCA (volatility, uncertainty, complexity and ambiguity) model, as the types of challenges leaders currently face are similar to that model.
Coronavirus’ Impact on Business
The COVID-19 pandemic is the greatest challenge we’ve faced since World War II. To date, the number of reported cases is close to 5 million, and the number of deaths exceeds 300,000 worldwide.
The pandemic is also having a devastating impact on business. People are losing jobs and income, with no way of knowing when normalcy will return. The International Labor Organization estimates that the pandemic could cost 195 million jobs. Even when the short-term effects end, the long-term economic impact will ripple for years.
Coronavirus and VUCA
All four characteristics of VUCA are true of the challenges we face due to the coronavirus:
- Volatility: Changes due to COVID-19 are taking place every day, unpredictable, dramatic and fast.
- Uncertainty: No one can predict with confidence when the pandemic will end or when we will have a cure or vaccination.
- Complexity: The pandemic is affecting all aspects of life — including health care, business, the economy and social life — in complex ways.
- Ambiguity: There is no “best practice” that organizations can follow to manage the challenges caused by the pandemic.
Leading With VUCA
Successful leaders can use a different VUCA model to build their strategies for leading during this crisis:
Effective leaders do not allow change to cloud their vision; however, they might revise their strategy to achieve that vision. In their 1996 Harvard Business Review article “Building Your Company’s Vision,” Jim Collins and Jerry I. Porras wrote that a vision consists of two main elements and two sub-elements: the core ideology (consisting of core values and a core purpose) and the envisioned future (BHAGs for 10 to 30 years from the present and a vivid description).
In this time of change, leaders should stick to their core values; core purpose; and their ambitious big, hairy, audacious goals (BHAGs). Of course, they can amend their strategies to match the situation, but they must always keep their vision in mind.
During such a quickly-changing and unpredictable environment, leaders must fully understand those changes and their impact on their business and then develop strategies to manage these changes. In his 2008 Harvard Business Review article “The Five Competitive Forces That Shape Strategy,” Michael Porter highlighted the five forces that may affect the strategy of any product or service in a competitive market environment: the threat of new entrants, buyers’ bargaining power, rivalry with existing competitors, the threat of substitutes and suppliers’ bargaining power.
The importance of each of these forces differs from one industry to another. For example, in tourism industry, the current main driving forces are the threat of substitutes and buyers’ bargaining power, while in the digital marketing industry, the threat of new entrants and rivalry against exiting competitors are the key factors, due to the rising trend toward digitization. Leaders must study the changes in these forces and amend their strategies accordingly.
Most organizations’ employees currently have questions regarding job security and income stability. In his book “The 21 Irrefutable Laws of Leadership,” John Maxwell emphasized the important of communicating clearly with employees. Law No. 10, “The Law of Connection,” advises leaders to “communicate with openness and sincerity”; “focus on them, not yourself”; and “offer direction and hope.”
For example, if, after trying all other options, senior leaders decide to lower employees’ salaries or to lay off part of the workforce, they must be able to clearly communicate the justification for their decision and offer all the support they can provide to the staff they laid off.
Adaptability and Agility
To face the significant changes caused by the coronavirus, leaders must be flexible and agile and adapt their strategies based on the new situation. They should reevaluate all environmental and competitive forces and either amend their current strategy or adopt a new strategy to realize their goals.
In their book “Blue Ocean Strategy,” W. Chan Kim and Renee Mauborgne advised strategy creators to stop competing in overcrowded industries and to explore uncontested market spaces where competition is irrelevant. As an example, some leading pharmaceutical companies are trying to find treatment or vaccination for COVID-19. This market is a new one, representing a real example of a blue ocean. Another example is the rising trend of telemedicine, where patients can consult physicians virtually without the need to go to a hospital or clinic. Companies in all markets can do the same type of exploration by finding market segments that are not well served by current companies and creating products or services to satisfy the needs of these segments.
Proposed Workshop Agenda
Training managers can use this proposed workshop agenda to design and deliver a customized training program for leaders, adding breaks and modifying it as needed to match learners’ needs: