5 Lessons for Leading Through a Crisis
Debbie Simpson, former CFO of BCG, weighs in on the lessons learned from prior downturns, and how they apply to the current crisis.
Debbie Simpson was just a few months from retirement when the coronavirus pandemic rocked the global economy. At the request of BCG’s leadership team, Simpson agreed to serve the company for an extra year. In her role as managing director (and former CFO), she is helping the leadership team apply crisis leadership lessons learned from the financial downturns of 2001 and 2008 to navigate the current crisis.
Yesterday, Simpson sat down with Catalant co-CEO Rob Biederman to talk about how the past two financial crises have shaped BCG’s short, medium, and long-term approach for the months and years ahead. In particular, BCG’s actions in the wake of the 2008 downturn preceded more than a decade of enormous growth.
We’ve summarized five key lessons leaders can apply right away.
Take Care of Your Team
BCG did not lay off any employees during the 2008 recession. Why? Because the organization’s leadership recognized that the long-term impact of a talent deficit would erase any short-term cost savings. Obviously every industry is different, but as a leadership principle, it’s important to nurture the team you need to move through a crisis and beyond.
At BCG that means protecting the core people and assets that will enable growth as soon as possible, as well as changing policies, communications cadences, and even employee benefits to accommodate them during difficult times.
Take Care of Your Customers
Long-time BCG leaders like Simpson still hear from customers about the company’s exemplary flexibility and attention during the 2008 recession. With travel restrictions and financial difficulties impacting your ability to find and onboard new customers, caring for the ones you already have should be a top priority. Crisis leadership extends beyond the physical walls of the organization.
“It’s not always easy, but making sure clients know you’re there for them is important,” says Simpson.
Invest in Strategy Execution
Cost management is, of course, going to be a focus for most leaders during uncertain times, but leaders also need to prioritize the most crucial initiatives at the organization and invest in getting them done.
“The highest-performing companies in a crisis are those that make room for strategic imperatives while keeping the lights on,” says Simpson.
So-called “peanut butter budgeting,” in which investment — or cost reduction — is spread evenly across the organization will inevitably work against this goal.
The difficult part is prioritization. Your organization may have dozens or hundreds of initiatives happening at once, so leadership needs to focus on building the systems and processes to evaluate which of those are most important in order to eliminate the others. At BCG, company leaders have built a system in which decision-making authority is both clear and absolute, ensuring that the highest-priority work still gets done.
The current economic crisis is different from past downturns. This means business leaders need to rethink everything, including their operating models. Extended remote-work mandates, travel restrictions, and other realities have fundamentally changed the way work is delivered, and forward-thinking leaders will adapt quickly.
At BCG, travel restrictions have eliminated an enormous cost on one side (consultants tend to travel much more than other people) but an increase in the technology budget for video conferencing and other tools to connect consultants to customers and each other.
At Catalant, our customers are rethinking the way they deliver on their strategic priorities — especially when it comes to aligning their workforce to projects and initiatives. For many, that means fast access to the skills and resources they don’t have in-house. For others, that means focusing on matching internal talent to the right work at the right time.
Because the pandemic hit the world quickly and without warning, it’s natural to long for the days when business was booming. But the door has closed on 2019 already. Crisis leadership means looking ahead to what the world will be like in 2021 and beyond, and orchestrating your organizations accordingly.
Trends like digital transformation, remote work, and more have only accelerated in the past few months. The world that emerges from this crisis will adapt to new behaviors, new technologies, and new perspectives on everything from work/life balance to epidemiology. This presents an enormous opportunity for business leaders to choose bold pathways to the future.
At BCG, that means building resilience and vitality inside the organization and focusing on digitization and other opportunities.
“We’re not going back to 2019. We’re going toward 2021 and things will be different. What matters is how you position your company for the new reality,” says Simpson.