Black swann versus bold move
When fear paralyses the business. In challenging times such as the COVID-19 crisis, successful companies drive their strategic initiatives forward under pressure.
Zürich, 8. April 2020
"Black Swan" as the ultimate test case for top management
An interview with Erik Wirz, Managing Partner of Wirz & Partners, a leading executive search firm in Switzerland.
How do you see companies dealing with the current situation?
In addition to crisis management, successful companies are driving forward their strategic initiatives under high pressure. In an environment where weak management remains in a state of shock, resulting in the loss of valuable market share, we see our clients seizing the momentum. Today, top management faces a whole new set of challenges. Crisis management, as most have learned it, is not working. In addition to the breakdown of global supply chains, the interdependencies of the global economy are rapidly becoming apparent. The board is confronted not only with new, previously unidentified operational risks, some of which are existential for the company, but also with risks that can have legal consequences for the board itself. The so-called "black swan" event becomes the ultimate test case for the leadership team and reveals the state of the organisation's resilience.
Does it only affect top management or the board as well?
Operational management also faces unexpected challenges. Every neglected, ignored or sugar-coated shortcoming in digitalisation strategies has been mercilessly exposed in recent weeks. In extreme cases, this can lead to operational standstill, company bankruptcy or even endanger the health of employees, because infrastructure and process deficiencies prevent the efficient implementation of home office.
If there is one "positive" that can be drawn from this, what is it?
The competencies of operational risk management, security, digitalisation and transformation management are receiving increased attention from the board and top management and are taking on a whole new importance in the light of the COVID-19 pandemic.
What is being underestimated?
In addition to the effects mentioned above, there is another aspect: fear. The organisation is paralysed. Employees are working in a new and unfamiliar environment, with various stress factors, all accompanied by the ubiquitous media coverage of frightening news, which in combination leads to fear and uncertainty for many.
Where do you see "opportunities"?
In leadership style: A clear picture is emerging of which leaders have true leadership qualities. Deliberate, rapid action and regular communication are not enough. The organisation needs to feel that the leadership team is emotionally invested. Superficial rhetoric is even less effective in such times; genuine commitment, interest in people and the individual problems of each person matter. Flexible, pragmatic solutions are required.
What matters now?
Top companies are characterised by entrepreneurial readiness, risk management, cash management, cost variability, broadly supported supply chains, high customer diversification and a high degree of digitalisation. In these times, the organisation pays more attention than ever to whether the leadership team has a clear plan. Hesitant, unclear and non-committal behaviour by top management becomes more than ever an operational risk and the board is called upon. The quality of the management team and the strategy is reflected in the consistency of the execution. If the strategy is not overturned by operational chaos, if employees trust the leadership team, then a good job has been done.
What are the opportunities, what is the "bold move"?
The issue of strategic recruitment is more important than ever. Key positions in top management need to be critically reviewed. In times of crisis, the composition of the leadership team is of fundamental importance. New opportunities are emerging not only in M&A but also in recruitment. Top executives are moving to companies with a future, a vision, a clear strategy and high ethical values. In the current situation, good leaders are more visible than ever and therefore more in demand than ever.
About Wirz & Partners
Wirz & Partners is one of the leading executive search firms in Switzerland (Handelszeitung 2020 Ranking of the Top Executive Search Firms in Switzerland) and supports companies in the assessment of their current leadership teams and in strategic recruitment. Wirz & Partners is recognised by clients and candidates as one of the top 45 executive search firms, 19 of which specialise in traditional executive search and Wirz & Partners is one of the top 10 Swiss executive search firms.
