Board Priorities: Now What?
Fantastic considerations of “V-shaped” recoveries and a return to the pre-pandemic, pre-social unrest society of 2019 are finally yielding to the realization that the world will never be the same — too much has happened to too many. Today, risk management gives way to uncertainty management. Hence, standard counsel regarding the uncertainty born of turbulent times applies: Experiment broadly and learn quickly to discover and define a path ahead.
A process for immediate use
Two exercises will help boards guide themselves and their organizations. First, what did we, as a board, learn over the first half of 2020? What did we learn about how we work and about our organizational leaders (especially the CEO and her or his potential successors)? What did we learn about the organization itself, the business and the world? What were best and worst practices? What does the after action review (AAR) reveal? The board’s asking these questions of itself and of senior management will both acknowledge the magnitude of what they traversed over these past few months and authorize pausing to collect learnings before re-entering a now altered fray.
Secondly, organizations have to rebuild differently and, ideally, better. So, what’s the same and what’s different now, about our world, industry and organization? For the moment, think about the next one to two years, not long-term strategic plans. Where do we want to go as a board and as an organization? How do we leverage the “suspension of normal” to enable a reassembly of the organizational pieces in the service of a different future than we might have imagined in January 2020?
Board attention will facilitate executive adjustment to creating something new and, thereby, moving from the grind of survival to accessing the restorative energy of creating some new and desirable endstate, utilizing lessons learned over the first half of 2020.
A few stimuli to prime the process
Speaking broadly, how might you and your fellow directors or trustees avoid filling the above process with now-outdated thoughts? How might you jolt yourselves and your colleagues from late 2019 perspectives or from the potentially overwhelming “now” as you consider the world ahead, the one into which your organization will need to fit?
To answer that question, we best recall a few basics as context for any consideration, such as people will still be people. Deep emotions, like that of loss and experienced threat, stay with them. Similarly, people told over many days to be wary, even afraid, do not suddenly become unafraid. Most homo sapiens do not operate that way. Also, technological advances develop more slowly in the short term and more dramatically in the longer term than we think they will — I know that I am still waiting for my long-promised flying car.
Additionally, where we stand, such as in the midst of a pandemic or aroused consideration of social disparities, affects what we see. Restated, the world looks much flatter when we stand on its surface than when we view it from orbit. Perspective should clarify what has and will change even as it allows us to distance ourselves from the falsehood that yesterday beckons or that economic or human recovery will occur in the shape of a “V.” Arguably, boards should, above all and always, provide perspective.
For instance, boards have always needed to help senior management balance short-term outcomes and long-term success. The uncertainty surrounding organizations today increases the difficulty of discovering that balance and heightens the need for boards to help senior management balance the need to survive today in order to have a tomorrow, even as they support envisioning and delivering a now altered tomorrow. Boards need to ensure that they and senior management explore and refine a mid-term vision, a place to head toward amidst the vortex of dangerous short-term cross currents.
Let’s consider two categories: your organization’s business and its people. What trends has the first half of 2020 boosted or even created? Again, your list should prove much more specific to your world, but here are some considerations to jostle your thinking.
First, the business environment:
- Scientific research. As we learn more, we discover how much more there is to learn. In some ways, the horizon recedes before us even as we cover more and more ground. The carnage of the pandemic pressures us to expand and exploit our knowledge which, in turn, pushes scientific funding collaboration even as it feeds new product development, distribution, delivery and marketing. The related demands for quality science along with artificial intelligence to sort and mine big data will only grow. How will science help us to protect ourselves from disease and its ramifications and, of course, from the associated evermore digital world filled with ever greater threats (along with so many opportunities) and the need for ever better cybersecurity?
- More dispersed work. Stated negatively, commercial office space is probably not a good play in the foreseeable future. Business will want to continue to offload the expense (and risk) of holding space. From a macro standpoint, individual residential “inventory” will see expanded dual use for living and work. Those unable to work primarily remotely may well adopt a very different model, moving back to a past of people living near, in, or above their workplaces in order to minimize travel and the exposure to disease. This migration to more work at home will not only continue to require additional skills and resources for employees, but also for leaders who will need to develop increased ability to lead virtually and to manage from a distance.
- Supply chains. Practicality and politics had already driven reconsideration of many firms’ extended outsourcing, an extension of late 20th century practices. Long supply chains, especially when combined with a commitment to low inventories, create vulnerabilities. In a war, no army wants vulnerabilities. Who will want them in a post-COVID-19 world struggling to find common cause?
- Climate change. It’s here. The seas rise and our weather grows more catastrophic. Pollution harms our lungs and now a sickness arrives to exploit any weakened (or simply under-maintained) respiratory system. And yet, a pandemic that precipitated a throttling back of industry enables the planet’s air to improve within weeks. We can continue as we were and, by necessity, invest deeply in remediation (dikes, emergency relief and masks) or restart the economy with a much greener hue. Whichever way we go will define what we mean by infrastructure and will impact economies and industry around the world.
- A long road home. Whatever fantasies existed concerning a V-shaped recovery have generally receded in the face of the realities of COVID-19 as a virus and a fragmented, even fractured, governmental response in countries such as the U.S. and Brazil. Aside perhaps from designers and manufacturers of COVID-related products, the road back for most organizations will likely prove a long slog that will begin with finding a firm and sustainable footing before advancing with a unique and maintained discipline, including regarding risk taking. It’s a return to business and leadership basics.
As for the people in the organization:
- Infrastructure. Think physical and human. What do we want in terms of our science, our government, our level of general education? How should our public education system prepare people to live in a data-saturated, digitally enhanced, shifting and science-rich world? What about utilizing our ability to identify and track disease spread by tracking individuals and using artificial intelligence to mine the data all but simultaneously with its collection? That said, how should boards guide senior leadership in identifying the skills needed and how to secure them, e.g., through remote hiring and internal skill development? What business opportunities exist for your organization in a country like the U.S., sorely in need of repaired and enhanced infrastructure of all sorts?
- Human Resources. What does it take to be “at work” in a world crippled by a pandemic and bracing for the next one? Who safely cares for and educates the children in order to allow the adults to work? Who tends to aged and chronically ill or disabled family members? What do the adults need in order to work at home, from other remote locations, or in a shared location? What space, software, skills, and schedule do they require? What is the role of an organization in helping its members answer these questions, especially in light of how clearly social disparities, and so often gender, affect how current and potential employees answer these questions? A board can help a CEO lead senior management in updating the expression of organization values, in deeds and resources as well as in words.
- Leadership and the elites. In the 1970s and 1980s we saw the end of the employment contract of “do your job, keep your job.” From 2007 to 2009, employees learned that fellow elites will save the rich lender even as many borrowers drown. Initial bailouts and recent federal winnowing of healthcare coverage amidst the pandemic reactivated these memories for many. What’s left? Polls show a decades-long decline in public trust of U.S. government institutions from about 70% to under 50% and ongoing reports present special benefits to the wealthy of tax cuts, governmental relief and roiling equity markets in a time of fundamental distress for so many. Trust in elites will increasingly be local and in sore need of shoring up. The CEO and executive team should take note and work overtime on securing their connections to their employees — connections that could likely provide a sustained competitive advantage. Many people no longer start from the belief that “we’re all in this together.” Boards can help the CEO to understand this reality and to make an informed choice about addressing it in a sustained and effective fashion.
- PTSD. Will we acknowledge and treat what both COVID-19 and social injustice has done to others — minorities, prisoners, abused women trapped in their homes, the homeless, the “essential workers”? Individuals and collectives alike remember trauma. Untreated, it travels with us. Treating it or not, therefore, will shape our individual and organizational futures. Acknowledging, normalizing and treating trauma does not fall within the skill set or experience of many senior leaders. Boards can inform and guide CEOs and executive teams about the need and the advantage of tending to the troops if you want them prepared for the next battle and motivated to follow the appointed organizational leadership.
- Universal health care. If I am now convinced that my health depends in important ways upon you, then I have much more interest in either protecting myself from you or in improving your health, regardless of who you are or where you live. Tending to one another’s health will salve a fractured society while advancing only self-protection will widen existing fissures. In general, boards can place the following on the agenda: what role should your organization play in reducing the experienced vulnerability of your employees regarding their health, their children’s, or their parents’?
- Connectedness. Patience here — reconnecting will likely be a very mixed and emotional process. Few people will come out of sheltering in place wanting more isolation and yet, public places, including workplaces filled with people, now engender anxiety and even fear for many. Tentative at first, wary of public places, but nonetheless eager for in person interaction, people will venture out. Some will likely rush out. Many will venture out slowly and with great caution. Eventually, people will look to integrate the best from living pre-pandemic to living during the pandemic, but responses will vary. Do not expect uniform or neutral responses, including to anything experienced as more home time — or more public time. Boards can encourage careful organizational planning here for ongoing improvement of remote work as well as of workplace safety.
- Organizational leadership. We have long known the value of crucibles in the development of leaders, particularly senior leaders. They best learn about themselves, both strengths and developmental areas, when confronting challenging and even downright hard times. That knowledge should inform his or her ongoing development as well as how s/he staffs and builds an executive team. What does the board see as it observes the CEO and senior team? Have they risen to the challenge in a way that generates board confidence? What developmental agenda has revealed itself even for the successful CEO? For example, does the board have deep confidence in the CEO and her or his team to engage in established best practices for not just turbulent, but outright chaotic times? Can they enable broad experimentation and quick learning? How skilled is the CEO in guiding others to observe and learn about their direct reports? What has the senior management team learned about organizational talent and future leaders?
In closing, boards at their best guide and center the CEO and her or his executive team. They can support them amidst the current uncertainty to take the time to engage in a process like that outlined above. They can also help them to adopt a broad perspective before reassembling the pieces of the organization. Hopefully, the above list of changes can feed that perspective and thereby help you, your colleagues and your organizations.
Gregory P. Shea, Ph.D., consults, teaches, researches, and writes in the areas of organizational and individual change, leadership, innovation and group effectiveness. He is a senior fellow at the Wharton School’s Center for Leadership and Change, adjunct professor of management at the Wharton School of the University of Pennsylvania and of its Aresty Institute of Executive Education, and adjunct senior fellow at the Leonard Davis Institute of Health Economics at the Wharton School, and a member of the Academy of Management and the American Psychological Association.