It feels like we are in Act II of a five-part Covid-19 play that Shakespeare could have written. This suggests we are not very far into the crisis with many uncertainties, twists and learnings left.
Act I delivered three defining moments. 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 by racial injustice our society is.
Act II is going to be about trying to make sense of it all by juggling more aspects, reactions and complexities as new characters, sub-plots and ideas emerge. We have three thoughts for the investment industry to ponder as the plot lines unfold: crisis circumstances, leadership responses and cultural aspects.
First, crises like this generate surges of anxiety, deep vulnerabilities and multiple tragedies. But the silver lining to these dark clouds can be finer values, deeper talent and better truths. This seems truly to be “the best of times and the worst of times”. Dickens’ Tale of Two Cities went on to say “…it was the age of wisdom and it was the age of foolishness”. We will need to go deeper into this play before we are sure where wisdom is and where foolishness lurks. Act III could be pivotal, when critical decisions must be made.
The crisis has revealed much of our prior foolishness: uncaring disrespect for others; status obsessions; reckless misuse of our planet; work / life imbalances; and short-term measured preferred over long-term meaningful, to name but a few. The silver lining is the improvements in relationships and values emerging in new experiences and actions that are tapping into our inner heroes. Think of all the new support networks, the family resets and the new respect for front-line workers. We are finding many more moments when we surprise ourselves.
Second, crisis management by good national leaders have been defined by authentic ‘it’s-all-about-you’ qualities. The bad leaders have acted out ‘it’s-all-about-me’ behaviours. Thankfully, many of our industry’s leaders have demonstrated ‘it’s-all-about-you’ qualities – understanding that people want to be listened to and led with honesty about the present and reasoned positivity about the future.
Third, strong culture has proved such an important underpinning for national and organisational responses and outcomes. It works through good values embedded in behavioural norms that when acted out, particularly in testing times, strengthen ties. Attitudes and actions towards diversity and inclusion are key indicators here. The bad news is the belated realisation of how unsafe black lives have been and still are. The better news is that industry leaders have publicly acknowledged this and have committed to act with urgency to making workforce diversity a cherished asset.
Act II is full of uncertainty and there is no one plot line. Our business strategies will surely need to change and pivoting with optionality will be the prime navigating skill for organisational leadership. There are three actions that should help here.
Work on trust
How we collaborate is being re-configured in the virtual world, impacting organisation’s teamwork- and client-delivery models. We have all experienced the advantages and disadvantages of working from home and, regardless, should recognise that the vital relational element of trust is vulnerable without physical meetings. Notably both the feedbacks and the bonds within relationships are weakened. To avoid decay the ingredients which build and maintain trust – authenticity, logic, empathy and connections – need investment. So paying special attention to moral integrity and values, over-communicating intention and action, and ‘all-about-you’ listening and caring are vital. And the logic of the case must stand up, that is being reasoned or fact-based where our emotions often favour opinions.
Trust does not desert an organisation overnight, but it can ebb away over time if investment is under-powered. Act III may prove defining for some organisations, so extra efforts now to maintain and bolster trust will be worthwhile.
Work on the nexus of purpose, organisational identity, culture and diversity
While there has been a refocusing on organisational purpose in recent years, the state of thinking and documentation of these soft concepts leaves much to be desired. Our proposition is that work on more purposeful organisations must cascade through the organisation, requiring considerably more focused effort. One way is to use online learning and development channels – often developed to train and refresh all staff on policy and compliance issues – to build a better understanding of the soft power of purpose and its connection to their culture.
Work on sustainability in the investment model
Our experiences in 2020 suggest that taking a multi-stakeholder approach really does increase actions around sustainability. It has also resulted in more resource and focus on sustainability in companies through: the integration of ESG; the strategic management of sustainability; and connections to the SDGs. While we have been travelling in this direction for a while, the pace is picking up, as more enlightened self-interest fuels motivation. However the ‘S’ in ESG still lags and more needs to be done to ensure that people – whether the workforce, the supply chain or others involved – are more respected and included than before.
To conclude, as we look into the future there are literally hundreds of paths that radiate out in front of us. Some lead to really bad places. But some lead to a world more healed and more beautiful than ever before where we have made sense of a new normal and not gone back to our old normal. Our transition needs to be to a more resilient, clean and inclusive state than before. Crises reveal the better paths and, if we are wise to seek them out, we can work this out.
As Nelson Mandela said: “It always seems impossible until it’s done”.