The year 2020 has been the year of COVID-19 pandemic that has not only impacted the business landscape all over the globe but also drastically impacted how businesses function and sustain. With many businesses shutting shop and others laying off their employees, the Indian and global economy has been hit hard.
The Indian economy has witnessed a constant dip as the International Monetary Fund (IMF) also slashed India’s GDP growth forecast to -10.3% for this fiscal. This is significantly lower than what the IMF had predicted in June, i.e. 4.5%.
As per the report titled, ‘A Long and Difficult Ascent’ prepared by the IMF, for the world as a whole, the growth is projected at -4.4% in 2020.
Areas affected most by COVID-19 pandemic
The strict regulations and limitations enforced as preventive measures during the pandemic has affected several industries including aviation and tourism, automotive, construction and real estate, etc.
Organisations can hasten recovery with the right transformative measures
Once you have acknowledged the need to change your business and identified the areas that need your attention and focus, you can begin to work on the same by preparing for transformation and taking resolute action.
Identifying areas of low cost investment but high impact
- Identify the pain points: You must acknowledge the need for implementing transformatory measures for your organization and identify the pain points of your organization. Focus on areas that need your attention and time, be it shifting within the market, exploring new technologies, understanding low profit and turnover, etc.
- Communicate with your leadership: Once you have identified the strategic steps that you need to take, you must communicate the same to your leadership and devise an effective strategy and communication channel to implement the same successfully.
- Seek support from your board members: Seek support from your board members and promoters and build a strong, diverse team to lead the change.
Creating a roadmap for change
- Develop a transformation vision: Preparing for transformation can be a tedious process. You would need the support and inputs of employees at different levels for developing the transformation agenda. After you receive everyone’s inputs, you may want to develop a transformation vision that will give a clear picture to each stakeholder about the mission and vision of the company and finalize the same.
- Determine the transformation agenda and set goals: Determine the transformation agenda, decide what needs to change, identify the big moves and quick wins, and recognize the opportunities for future growth. Once you have taken all these things into consideration, you can assess the readiness of your stakeholders and employees for change and set clear long-term goals.
Prepare for implementation
- Set realistic goals and mentor your team:Taking resolute action means setting realistic expectations of the growth of your organization, reviewing its progress, introducing changes, and staying committed to your goals. As a leader, you must communicate and mentor those around you, actively seek feedback from them, and work towards change.
- Build trust: By sharing key accomplishments and proactively recognizing and rewarding wins and people behind them will help you build trust within the team. Finally, you can share these changes with your customers and make them aware of the value created for them.
There have been several instances of leaders who have stood strong in the face of crisis and handled them using their expertise and skills. Some of those transformational leaders include-
- Warren Buffett
The chairman and CEO of Berkshire Hathaway Inc. effectively dealt with the 2008 crisis. By helping rescue companies like Goldman Sachs Group and General Electric Co. during the crisis, Berkshire’s investments in September and October 2008 exceeded $15 billion.
According to Buffett, “One of the lessons of the 2008-09 experience… was the fact that every company in the United States was a domino, and those dominoes were placed right next to each other. So when they started toppling, everything was in line.”
A clear long-term vision, strategic planning, and decision making helped Buffett make decisions which worked in his favour. Buffett has admitted that his strategy is to “be fearful when others are greedy, and be greedy when others are fearful”.
- Reed Hastings
Founded in 1997, Netflix was only about rental-by-mail. But, its CEO, Reed Hastings had a bigger vision for the company – to make Netflix the leading company in streaming services.
At the height of the economic crisis in 2009, Netflix was one of the companies that saw its earnings jump to 24% and its subscriptions reach over 9 million. Additionally, Netflix shares had increased over 57% the previous year.
Understanding the importance of home entertainment for its customers, Netflix launched the perfect product at an ideal price. By providing its users with streaming services, allowing them to access a range of content from the comfort of their homes, Netflix tackled the crisis by understanding the needs and demands of its customers.
Moreover, with the COVID-19 pandemic forcing people to stay indoors more, there has been an exponential growth in the demand for streaming services.
Reed Hastings’ long term vision for the company and his commitment to make Netflix the leading streaming service is what helped the company achieve new heights.
- Howard D. Schultz
Howard D. Schultz had returned as the CEO of Starbucks after a gap of eight years in 2008, replacing Jim Donald. Amidst an economic crisis, where the company was facing competition from McDonald’s in 2008, Schultz decided that “The company must shift its focus away from bureaucracy and back to customers.”
By launching the “My Starbucks Idea” campaign in the midst of an economic crisis in 2008, Starbucks encouraged its customers to share what they wanted from the company and how the company could provide a better experience to its customers.
With an increased social media presence, Starbucks became a brand committed to its customers and built a successful fan-base for itself. It was Howard D. Schultz’s customer-centric approach that helped the company gain popularity along with the trust of its customers.
Traits of transformational leaders
Every transformational leader possesses certain unique characteristics and traits that sets him/her apart from the others. Such leaders exhibit confidence and stand strong in the face of crisis, without letting their teams and organizations get demotivated with frequent setbacks. A few prominent traits of such leaders include-
- Learning: A prominent trait of transformational leaders is learning. Such leaders keep a firm eye on KPIs, seek constant feedback and are lifelong learners.
- Championing: Transformational leaders champion large scale or high impact changes in the organization. They are risk-takers who drive the organization towards success and change.
- Communication: Effective communication is an essential trait of transformational leaders. They communicate effectively about the organization’s focus areas to all stakeholders. Such leaders ensure that there are no communication gaps in the organization and avoid miscommunication.
- Decision-Making: Efficient leaders influence and make decisions that have a large organizational impact. They ensure that decisions impacting the organization and its employees are taken with careful deliberation and planning.
- Building Trust: Transformational leaders build trust through their own character, competence and personal conduct.
- Coaching: Transformational leaders coach and mentor other leaders to unlock their potential and become successful.
- Representation: They represent the organization to the outside world.
- Empowerment: A strong leadership delegates, empowers and inspires other leaders and managers. They ensure that they not only empower themselves but also all those in their team and together achieve success.
- Strategic Direction: Transformational leaders provide vision and direction to the organization’s strategy and pave the road map for the organization to set achievable goals for the organization, its employees, and themselves. This reflects their skillful and critical thinking.
According to the famous motivational speaker, Brian Tracy, “The true test of leadership is how well you function in a crisis.” The way leaders act in a crisis and lead their team, determines their true potential. A successful leader is one who makes skillful decisions and takes the team along with him/her.
The Executive Program on Transformational Leadership by BOD focuses on helping leaders develop these key competencies to be able to lead better. Join in for a complimentary coaching session with a group of leaders from different industries. Sign up for a free session.