The Covid crisis is resembling a five-act Shakespearean play, with the drama deepening with each act.
We spent last year in the first three acts. Act I comprised three defining moments, all of a tragic nature. Australian bushfires in January made us stare at the complex truths of climate change. In March we realised that Covid-19 was truly deadly. Then George Floyd was unlawfully killed on 25 May, showing us just how deeply wounded our society is by racial injustice.
In act II we tracked the characters in a long climb to obtain that new view of changed surroundings, only finding it at the top of the mountain. And in order to get there, we needed to successfully bypass the easier paths that peter out on the lower slopes and take the better ones that are harder to find and steeper to ascend but produce the most revealing perspectives.
Now we find ourselves in the closing phases of act III extremely fatigued by stress and the loss of our sense of control and agency. Usually we feel we have some control over what happens to us but, in 2020, life happened to us and history was written without us.
However, the human spirit continues to show its mettle with optimistic and silver-lining talk and, for some, this is enough to shout down the worries.
In the stock-take of small mercies there are a number of components that constitute our resilience – you could call these ‘micro-resiliences’. These are our many small coping mechanisms and daily habits as well as those minor triumphs, exercise hits, reconnections to what matters and instances of ‘paying it forward’ in which the response to a kindness received is to heap multiple kindnesses on others.
And there are significant opportunities for organisations to do all this and to scale up by redefining their boundaries and make more widescale change for the benefit of their biggest asset – their people. The early signs are good that organisations are stepping up by becoming more emotionally intelligent and humanistic. But their success relies on something quite special. It needs a new form of leadership.
At a time when leadership’s time has arrived, with new expectations to carry and new narratives to deliver, it just got a lot harder. Isn’t that ironic? While good judgement has always defined leadership, that judgement is challenged by increasing complexity. Where decisions juggled two or three things, now it’s many more that vie for attention, each with more uncertainty. Views on an issue were less divergent, now opinions are highly polarised and tough decisions will be contested by a broader group of stakeholders. The battle for hearts and minds has never been harder.
The key leadership traits start, as ever, with communication and connection. Currently, being adaptable and agile to innovate under pressure is a trait in demand as is the ability to mix dominant and serving leadership styles as appropriate. Forward thinking is a natural trait for many leaders, but emotional intelligence is not – and it helps a great deal to shape the others, particularly in times such as these.
Take Jacinda Ardern the New Zealand leader. Lots of emotional connection there. Her references to ‘my team of five million people’. And her maxim was to ‘judge me on my actions, not my words’. And yes, New Zealand has one of the best Covid records in the world.
Research from management science identifies the traits of dominance and serving as the two critical pathways for leadership. There is a dominant, confident and support-demanded approach, and there is a serving, empathetic, and support-volunteered approach. Old leadership did dominance. Game changers employ both. This is how Ardern dealt with the coronavirus by martialling both styles.
It is important to remember that in times of uncertainty and stress, the bond you get from your leader is critical to giving them your trust. And the confidence you can get from dominant leadership styles matters, because it can mobilise their team to high-velocity action.
Act III features both leadership game changers as well as three landscape game changers that require our attention.
First, the impacts of Covid itself are compounding the many changes and uncertainties that were already present. In many cases it is speeding up trends. It has certainly been deepening the societal fault lines which stem from issues of inequality. Think of the rise of bigger government. Game changer one.
Second, there are new drivers of success. The shifts from “things” to “ideas”; to markets where winners-take-all; and indeed markets-of-one. Think of the rise of Google, Facebook and Amazon. Game changer two.
Third, there are changes to financial markets. Investment markets have been defined mostly bottom up by the quality of the ideas and products generated by thousands of individual companies, but they are increasingly now positioned top down as a transmission channel for monetary policy, or even an after-effect of it. This is propelling capitalism itself into a new phase. Game changer three.
How big are these and how different is it this time? Thinking about some old words that resonate in these new times, brings to mind Sir John Templeton’s advice that the four most dangerous words in investing are: This time it’s different. Exploring this maxim helps to answer the big questions.
Surely, it’s never different. Our inherent behavioural biases and our reversion to old habits, individual and groups, don’t change. People fundamentally don’t change.
But it’s always different. The state of the world and markets are uniquely complex and adaptable to new situations. History doesn’t repeat but it does rhyme.
Could it be more different this time? The game changers – both the situational disruptions and the leadership disruptors – are enormous this time and are making more of a difference. You have to understand the past to recognize the differences in the present.
In the previous paradigm there was a stronger emphasis on ‘never’ than on ‘always’, however it seems there is now a more equal balance, precisely because of the advent and significance of the game changers.
The important additional thought here is that there are increased returns available to those who can successfully manage the complexity associated with it being more different this time, especially because the future is particularly clouded by uncertainty at this time.
And this leads to thinking about change and the conditions needed to make it work well.
All the management research literature points to the conclusion that making change work well is an odds-against human endeavour. McKinsey studies have repeatedly suggested that less than a third of change processes achieve what they aim for.
The reasons at a high level are clear. Everything needs to go right for a change process to work and the bringing together of a number of seemingly disparate parts: the hard stuff like processes; the tricky leadership stuff; the softer stuff like cultural alignment; the softest stuff like letting go of old ties and getting emotional bonding to new ideas; and being patient over time to turn inches into hard yards.
Change is difficult because it hurts, but as we pass through act III of this Covid play, oh boy, do we need it to be in the script. And we need to be making the most of the opportunity.