Leadership in times of crisis #2 – Main ideas
On 27 March we hosted our second series of Leadership in times of crisis, with:
- Radu Atanasiu – Lecturer of Critical Thinking, MSM Romania
- Florin Ilie – Deputy CEO, ING Bank Romania
- Sergiu Neguț – Associate Dean for Entrepreneurial Growth, MSM Romania
- Adrian Stanciu – Associate Dean for Knowledge and Leadership, MSM Romania
You can view the full recording here. If you find it easier to read though, we’ve highlighted the main points below.
- 90% of the tragedies we live never happened, it’s all in our head. It’s important to discover what you think, in what you believe in and what you’re going to do after this is over. I’d use any period like this to make plans (if you have time) and execute them after. Life goes on.
- We need more control and to do what we believe in. We should appreciate what we have now.
- Let’s not consider staying inside a tragedy, a tragedy that can happen is stagflation, something we lived in Romania in the early 90s (definition: persistent high inflation combined with high unemployment and stagnant demand in a country’s economy). We don’t want this because it will cost lives and instead of thinking about going in the park, you’re going to think about staying alive. We’re very lucky now, nothing bad has happened to us so far.
- We are dominated by extreme uncertainty: we don’t know what’s next and we don’t know what we don’t know about what’s next. The right approach now is based on agility: fail fast, learn from mistakes, scale rapidly what is working and so on.
- What we shouldn’t do now is to stand still and wait for it to be over, that’s dangerous. I see everyday more and more signals that people are trying to become relevant in a new reality. It’s hard to say how the world will look like after this is over.
- On medium to long term, we need agility, not centralisation – the latter requires visibility in the future, which we don’t have now. If you perform something perfect, but it’s a bad idea, it doesn’t help.
- There are 2 ways to react now: become more flexible or become stronger from a market position perspective – to use the cash you have to eliminate some competitors who are less prepared than you are.
- Big companies are more likely to be agile, since they have more resources than smaller companies. But both have got a lot to learn now.
- I am very happy about how much we learn now – it took us about 2 weeks to learn about viruses, so we’re probably a month away from starting to realise what we need to do to survive economically.
- I agree with Florin, this is a moment for introspection, to decide how I can change. Because there are a lot of things that work in a growing economy, but may not work now.
- Leadership can only be showed in terms of crisis – when the going is good, anyone can lead.
- As a leader, you need courage and being able to sacrifice – to be able to do something you’re not happy with, but what you need to do. To take quick decisions, to know what you need to be informed when taking them and to not abandon people.
- Nowadays, people know how to do their job, they don’t expect that from a leader, they need a direction. If you look at scoring of leaders in companies, low scores come from lack of direction.
- The risk is we will have high inflation and high unemployment rate and we need to avoid that. Inequalities will be higher, we will have more control. Leadership will be more humane, being better with each other.
- When we look at costs, as freelancers or employees, we need to realise if we’re a luxury spending or not for our employers. And most of us will be in the first category.
- IT employees will suffer because the companies will cut spending with external contractors for software. Professional services will also have a big hit on short term, because they will need to hold liquidity. They will benefit from the delayed bank payments, but they will suffer in 9 months, when they need to pay what they’re postponing now.
- It doesn’t matter if you’re a small or big companies, because we work in an integrated economy and any small company works with at least one big companies.
- In moments of discontinuity, we need to consider the zero-based plan. We need to start the plan from scratch, not redo the existing one: if I would start the business tomorrow, in this context, what would I need? What resources do I need and how do I obtain them?
- If there’s a moment in history when we need to consider scenarios, this is it. We don’t know what’s going to happen in the future. We have suppositions and we need to decide which business structure I need for each of this supposition.
- We should write the scenario, not just think about it. It puts more structure on it when you write them, not just think about them.
- The rule these days is to try to be better than you usually are to everyone around you.
- We also need to focus on growth, not just on avoiding issues.
- You need to take into account the resources you need and constantly look at cash flows and scenarios, more often than you usually did.
- Hold close to you the investors that can support you, potential clients and clients, potential suppliers and suppliers, employees and be transparent and honest to them – this is what I’m struggling with, can you help? There are a lot of people willing to help these days.
- Even entrepreneurs panicking now should take time to reflect – this helps add some clarity
- Question what you see on TV – search how to do fast checking on Google and question the advice you see.
- We will realise that all those meetings across town maybe weren’t necessary and weren’t as structured as the online ones, that we don’t need to come to the office all the time
- Everything related to technology and the ability to interact with technology (like platforms such as Zoom, AI, VR, etc) will have a major boost.
- In regards to leadership, courage is important. We’re in a situation where we need to work without a map and we need to have the courage to try out new things and have the self esteem and an ability to feel good with yourself even if you fail, to consider it a learning opportunity.
- It’s also very important to be transparent and authentic. It’s always important, but during stability, it’s easier to escape this. You need to accept what you don’t know, to be able to generate security and trust from people in the future without pretending you are in control, because everyone knows you’re not.
- If you’re working in the area of nice-to-have activity: I believe that who had success before, had it because they were good at something. I think you need to ask yourself: what am I really good at. Switch from thinking “I am in X industry” to “I am good at X”.
- Then, you need to think what resources you have available and this means people and money. The third question is what can I use these two for. Try to look for new ways starting from the premise that planning future isn’t possible, but you need to fail fast.
- What companies need to do now is to save as much cash as they can. Then, make a note about the current situation and look at it frequently, so you remember this even in the good times.
- If you have excess cash, you don’t have to spend it, you need to save it, because hard times will come.
- Now it’s the time to minimise activity and don’t spend too much money from the cash you’ve saved. A business that reduces activity produces cash, doesn’t spend it.
- Then, you need to look at how to cut costs categories, because most costs are fixed. Even if we get out of quarantine in 2 months, the effects will be held a long time after that.
- This is a great time for learning. If the world will change and it won’t come back to what we know: for example remote working, what are the opportunities we have?
- As a business, I have excess cash, what can I do with it now? How can I use them to gamble on something that is almost certain to succeed in the new economy, after the crisis.
- It’s a great opportunity to ride the digitalization wave that have an opportunity span of 6-12 months, they won’t take years to be adopted.
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