COVID-19 is a test of an organisation’s purpose, resilience and the values of its leaders; this is even more profound and challenging for firms operating in emerging markets. Rajesh Chandy, Academic Director of the Wheeler Institute for Business and Development was joined in conversation with Amit Mehra, Managing Director of Growth, Strategy, Innovation at Accenture to discuss what to do when growth stops or goes into decline. Interview recorded on the 6 of April 2020.
- The crisis is an opportunity for leaders to demonstrate the values they truly stand for and garner the creative and innovative energies of employees to emerge stronger from the slowdown;
- Firms need to stay connected with their community of customers and stakeholders and engage with the entire ecosystem it operates with;
- Organisations that have pursued a systematic approach to growth initiatives have a better chance to find new avenues of growth and value;
- Companies in emerging markets and developed world alike should make greater use of digital technologies to upskill their workforce, enable more efficient collaboration, and to make their costs more variable.
Good leadership and the importance of values
While a CEO’s immediate responsibility is to ensure continuity of operations, according to Amit Mehra, the COVID-19 pandemic is an opportunity for leaders to define their company’s role in the wider community. He believes the crisis is a test for business leaders who need to be able to react quickly and make it clear what their organisation stands for. Management teams must be cohesive, take decisions thoughtfully and demonstrate that people can trust their leaders to provide hope and direction to emerge stronger from the crisis.
During Amit Mehra’s conversation with Rajesh Chandy of London Business School’s Wheeler Institute, Mehra says It is useful to look at organisations from two related but separate lenses, that of the day-to-day business and that of the organisation as a whole.
From the business perspective, the most pressing thing is to maintain continuity of the operations and responsibly control cash and expenses. Robust businesses should have the resilience to weather such slowdowns with technology-enabled variable cost structures (for instance by leveraging cloud technologies or AI-led chatbots and digital collaboration tools) that can be rapidly adjusted in line with revenue movements. Mehra thinks this is also the time for innovative action on accelerating experimentation with new revenue streams and business models (as we are seeing some businesses do). Here again, robust businesses will already have a systematic approach and a balanced portfolio of new growth initiatives they have been incubating. This is the time to prioritise a few initiatives for market-led validation, wherever feasible, albeit through tightly run pilots considering the unavoidable cost pressures. Thirdly, he states, businesses must remain connected proactively with their ecosystem of partners, including the suppliers to reconfigure commercial relations. This can lead not only to cost savings but also new business models including initiatives that can help better interact with, engage and therefore win and retain existing and new customers.
To Mehra, the organisational dimension is even more vital. How leaders set the tone through their communication and actions has a profound impact on whether the downturn unleashes creative and innovative energies of the employees or adds to their natural anxiety. Some of the organisational decisions that the business imperative will force the leaders to undertake – like we are experiencing in travel and the hospitality sectors – will indeed be painful. But how thoughtfully they are carried out is entirely dependent on the organisational leaders irrespective of their sector or industry. And much in parallel, leaders must articulate the direction and approach to restart growth when the environment improves, not just what is possible in the immediate term but how to emerge stronger. People will act with focus and energy on that guidance only if they trust their leaders. Mehra thinks a growth slowdown or decline, especially a sudden one like we are experiencing now, is a true test of the values of the organisation and what the leaders truly stand for.
As we emerge from the crisis, one very likely outcome is the changing nature of work, especially the sustained rise of digital technologies as employees, customers and partners become more tech-savvy and comfortable with online tools. In addition, it might also change the way we see work itself. For example, he believes that employees are likely to no longer simply see their role at work limited to just what they individually contribute to and get from the organisation, but rather to what extent they – and their organisations – play a wider role in the communities in which they operate. To Mehra, this will have even more profound implication on leaders to shape and articulate their firm’s role in the community that it is part of. Therefore, leaders will need to reflect on how the organisation connects the entire ecosystem it operates in so that they can engage their employees even more effectively.
Mehra thus considers this global pandemic a clear test of the resilience, purpose and values of an organisation and stresses that leaders must be able to demonstrate what their organisation truly stands for especially in the near-term crisis. And while the use of digital tools may surge, having pre-existing capabilities with digitally enabled capabilities across the firm will mean a greater level of preparedness.
Opportunity for developing countries through digital innovation
Digital capabilities will be as relevant in developed markets as developing markets. Mehra cited Accenture’s ability to help the NHS migrate all 1.2million members of its staff to Microsoft Teams in one week as an example of a wide-scale change initiative, which will help an organisation deal with the challenges that they are facing and improve collaboration during these times of crisis. This may improve long-term performance if it proves to be of benefit and could be applicable to any organisation globally.
In developing markets, the crisis is even more profound because issues are more complex, more dynamic, more uncertain and the infrastructure is not always in place to the same extent as in the developed world. Besides the more profound role of the leaders in the short-term to provide guidance and direction to their frontline workers to deal with the higher levels of complexity and constraints, Mehra thinks this is an opportunity for firms in emerging markets to use digital technologies to upskill and reskill workers to be prepared for the different world that will emerge after the crisis.
Read an article from Accenture on COVID-19: Managing the human and business impact of coronavirus.
Amit Mehra’s conversation with Rajesh Chandy marks the first episode of the Wheeler Institute COVID-19 series – bringing together the expertise and experience of our extended community to understand, illuminate and offer solutions to the challenges created by COVID-19. Our differentiating factor is the role of business in addressing these challenges, with a focus on the implications and actions for those in developing countries. If you’re interested in following the Wheeler Institute COVID-19 series, check out our next episode ‘How mobile payments can help hard to reach individuals and communities during crisis’.
Rajesh Chandy is the Academic Director of the Wheeler Institute for Business and Development. He holds the Tony and Maureen Wheeler Chair in Entrepreneurship and is a Professor and Area Chair in the Marketing Subject Area at London Business School. He also serves as Academic Director of the Market Driving Strategies executive education course at London Business School.
Amit Mehra is Managing Director with Accenture, London advising C-suite of large corporations to drive new growth and economic value. Prior to that, Amit was the founder, CEO and Board Director of RML/Reuters Market Light, a globally-awarded agri-tech company. He founded and built the firm as a start-up in Reuters, London, later spun it off and ran it as a separate company in India. Amit graduated from LBS with an MBA in 2001.