The past months have provided an opportunity to study a once-in-a-lifetime moment — how companies function during an unprecedented global pandemic while also navigating an accelerated shift to digital operations.
China was weeks ahead of the rest of the world in dealing with the pandemic and its fallout, so their experience is of interest. We conducted a series of 20 in-depth, in-person interviews, as well as a large-scale survey of more than 350 senior executives, to ascertain how the Chinese corporate world has adapted, innovated, survived — and even thrived — through this uncertain time. The companies we looked at, which ranged from state-owned enterprises to multinational corporations to local private companies, were forced to quickly:
As China emerges from its Covid-19 lockdown, it is becoming clear that many of the challenges they faced are here to stay – and that some of the changes they introduced should be, as well. We identified 11 lessons to help inform business leaders throughout the rest of the world.
Leaders in our survey who reported their firms had successfully managed the crisis told us they regularly kept their teams up to date on the state of their organizations, as well as the priorities and principles that would guide decisions at all levels. These leaders said they plan to sustain this higher level of transparency and information sharing going forward with more frequent, direct, frank, and personal communication.
The increased transparency wasn’t always easy. Multiple leaders told us that they felt their actions were under a microscope, with employees watching to see whether their behavior aligned with stated corporate values. They truly had to “walk the walk and talk the talk.” They also had to accept that not all employees would be pleased with their decisions. But ultimately these leaders reported that the majority of employees adopted a feeling of “we are all in this battle together and fighting the same enemy” that seemed to exceed localized employee dissatisfaction.
Leaders we spoke with reported that communication during the pandemic, although less “in-person,” tended to be more personal. Many avoided email and used audio apps such as Dingtalk or WeChat instead, or internal apps developed to facilitate information sharing and employee interaction. Interestingly, a number of leaders of multinational companies said that they felt handicapped by the incompatibility of their global communication channels with some of the popular local communication technologies used by Chinese companies.
We were surprised to hear that virtual video meetings have continued to be the norm since the return of employees to the workplace — sometimes even when all attendees are physically present in the same office. Many of the leaders we interviewed expect to convene fewer large, in-person gatherings and are planning more virtual events, believing them to be more efficient, direct, goal-oriented, and brief than in-person meetings. Most acknowledged, however, that video meetings are more intense and reduce opportunities for personal conversations and small talk, which have traditionally served to strengthen relationship bonds among colleagues.
The sudden, unforeseen economy-wide lockdown forced firms to switch literally overnight to completely digital models. Speed was of the essence: they needed to find creative solutions for emerging customer needs, overcome process barriers imposed by the lockdown, and find cost savings. Industries that would otherwise have taken years to realize their digital transformation agendas accelerated their efforts dramatically.
The crisis had the unexpected benefit of converting customers who had previously resisted innovations aimed at migrating them to digital platforms.
Traditionally, decision making in Chinese companies has tended to be top-down with numerous reviews and approvals at many levels. During the Covid crisis, many of our respondents reported a diminished role for mid-level managers. Speeding up digital transformation led to automation of some routine activities across a broad set of business sectors.
With leaders able to directly engage the entire organization through digital channels, mid-level managers were no longer vital communication conduits between leadership and the front line. Senior managers were forced to become more deeply involved in strategy and policy decisions to ensure a speedy response to rapidly shifting business conditions. A high degree of variation in local conditions, moreover, drove more real-time execution decisions by empowered front line teams closer to customers and more familiar with the local laws and conditions.
Leaders we interviewed believe that this reduction in organizational bureaucracy will facilitate increased collaboration and execution, crucial enablers of innovation at speed and scale.
Achieving desired changes in a timely manner often required collaborating in new ways with external partners, including customers, suppliers, regulators, and even competitors.
Our respondents also noted the need for swift internal reorganizations with leaders and employees cutting across traditional silos to set up agile project teams to solve problems as they cropped up.
We heard from many firms that leadership and HR are striving to sustain their newfound agility by redefining job responsibilities and work processes to encourage collaboration across functions.
Remote working was rarely practiced or supported in China prior to the pandemic. Given that the 9-to-5 work day was unlikely to transfer from office to home environments, managers needed to accommodate, within reason, varying work schedules based on personal circumstances and constraints. More self-motivated and outcome-focused individuals were able to make the transition seamlessly, but others who were more comfortable operating in a traditional command-and-control mode needed training to be effective.
Most of the leaders we interviewed believe that lifelong learning and a growth mindset will be crucial for employees of the future, especially as work continues to move on-line.
Because of reduced travel and better communication tools, many of the C-suite leaders in our study reported greater involvement as teachers and change managers within their organizations. They reported being actively engaged in developing talent and ensuring organizational alignment.
According to most of the leaders in our study, the pandemic presented a unique opportunity to observe how senior and mid-level managers responded to new challenges and allowed them to form preliminary judgments about managers’ future leadership potential.
The demands of crisis leadership forced leaders to delegate routine work to teams in order to refocus their own efforts on big-picture thinking. Top management was able to see which leaders busied themselves with routine work and failed to develop broader leadership competencies.
Moving down the chain, managers reported a shift to objective metrics, such as number of sales calls made, customer service calls attended, hours logged on, or tickets closed. They used online dashboards and digital data to assess staff workload and performance. However, the quest for daily objective measures risks overemphasizing short-term results. Daily dashboards should ideally be balanced with medium- to long-term, albeit perhaps less task-oriented, metrics. High levels of uncertainty and change, moreover, dictate that managers operate against agile, flexible goals rather than fixed targets.
We heard repeatedly from leaders about the power of employing a “volunteering” approach to identify, motivate, and engage front line employees. Especially when confronting new business initiatives with social impact, they found that individuals assigned to a task did not operate with the same degree of willingness, ownership, and motivation as individuals who volunteered.
Several firms reported that their younger, digitally savvy employees subsequently shared touching videos of their volunteer efforts with friends and colleagues on platforms like TikTok, helping to boost team morale and allay the oppressive mood during difficult periods.
Multiple leaders reported plans to deploy future volunteer-led initiatives to identify and execute complex business model changes, enhance staff engagement, and support a more ambitious social impact agenda.
Many of the leaders we surveyed reported that employees were experiencing high levels of anxiety and lack of motivation. This was particularly true of millennials whose careers had been fueled by the tailwinds of China’s meteoric and consistent growth over the past three decades; they are fearful that the future will be less bright, with growth opportunities significantly reduced relative to their parents’ generation.
The leaders we spoke with expressed a near-universal agreement that the shared experience of coping with the pandemic had engendered higher levels of tolerance, patience, and empathy within their organizations. Seeing colleagues on video calls in their homes, dressed casually, with family members and pets making appearances, for example, made interactions more personal. Most organizations in our study anticipate greater cohesiveness and camaraderie among teams that worked together through the crisis.
We identified two additional findings from our research. First, the market-leading firms in our study — which had strong reserves to weather the storm — actively invested in the short term with the sole focus of extending their long-term advantage over less endowed competitors. The leaders of these firms responded to tough times not by preserving resources, but by investing their reserves in strengthening their firms’ competitive position in the market.
Our second finding is that these firms were aggressively speeding up and expanding their digitization strategies, and implementing systems to ensure that new skills, practices, and behaviors are integrated into their organization’s muscle memory. They further recognized that considerable discipline will be required to ensure that employees not revert back to pre-crisis habits.
This content was originally published here.