The global economy could be heading towards another recession as a result of the coronavirus. The panic over the spread of the virus has caused the FTSE100 to suffer its worst day in more than 30 years last week, with over half a trillion pounds knocked off its value over the last month as a result of the changing economic climate.
The coronavirus has now reached the highest levels of the government, sporting and entertainment world, with some countries shutting their borders and taking extreme measures to prevent the spread of the illness. As a result, businesses are seeing their workforce working from home, events being cancelled and supply chains being under extreme pressures to meet the changing consumer demands.
The coronavirus outbreak is a huge challenge for the world leaders, not just because they need to contain the rapid spread of the virus, but also mitigate the risks and prevent inciting panic in their countries. Crisis management is perhaps the most difficult test, especially in a situation like this, which doesn’t have a comparable historical precedent or solution.
Leadership skills show in times of crisis
In times of crisis, leaders find themselves in the midst of a stressful and tense atmosphere, with significant mental, psychological and physical pressures. Especially with a situation like this one, with companies being unprepared for the further potential disruptions, the need for strong and transparent leadership is critical.
The uncertainty is impacting businesses and employees at all levels and the unknown can be very unsettling for all. Leaders who can engage directly with people whilst maintaining their sense of perspective, can help to lead through challenging times.
During times of unexpected change, people will be looking for stability and reassurance, and it’s the role of the business leader to provide direction and respond to the situation in a timely manner. Speed is essential, but making hurried decisions could make people nervous, so taking time to understand the situation and define the appropriate steps before communicating to the employees can make a big difference in managing the situation.
Managing the unknown
Leaders might not have control over the situation, but they can control the response. The ability to adapt rapidly is invaluable, as their first response may not be the final response and decisions often need to be adjusted based on how the situation develops. Providing perspective is another important role of the leader and taking a step back to evaluate the situation can be an effective part of the decision-making process.
Even though the magnitude and the duration of the situation might be unknown, people will be looking to the leader to understand how this will impact them personally. Whilst leaders might be worried about alarming people throughout the organisation, it’s important to explain the scope of the situation and manage expectations.
Information doesn’t create informedness. Leaders might assume that with all the information available through the media, no further communication is necessary. However, creating and sharing a regularly updated summary of latest facts and the implication is invaluable and it stops people from speculating and making assumptions.
The key objective in managing dynamic and unpredictable challenges is resilience. The current outbreak is not a one-off challenge - we can expect additional phases to the current pandemic and others in the future, and the best way to manage these is to prepare and learn from what we are seeing today.
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