The Pandemic Is Teaching Us To Embrace Uncertainty And Build It Into Decision-Making

July 20, 2020

By Adam Chapman, EyeForPharma on Mar 21, 2019

Complexity is the defining business and leadership challenge of our time. But it has never felt more urgent than this moment, with the coronavirus upending life and business as we know it. For the next few weeks, we’ll be talking to leaders about what it takes to lead through the most complex and confounding problems, and about Brody Moments (from Jaws’ Police Chief Brody and his famous line “you’re going to need a bigger boat”) related to the coronavirus.

Today we talk with Jonathan Goodman, Monitor Deloitte's Global Managing Partner and a Vice Chair of Deloitte Canada. For close to three decades, Jonathan has worked closely with the CEOs, boards and executive management of a variety of global corporations on issues of strategy, growth, M&A, transformation, and executive transition. He originally joined Monitor in 1986, and co-founded Monitor in Canada in 1987.

Jonathan Goodman
Jonathan Goodman MARTIN LIPMAN

David and David: What makes Covid-19 more complex than anything today’s leaders have experienced, and given that, what Brody Moments are leaders experiencing today?

Jonathan: There is no reference point in living memory for this pandemic, especially when you marry the health crisis with the economic shock and their combined consequences. For many of us the pandemic has already changed, or is in the process of changing, our collective calculus of uncertainty.

America’s second quarter annualized GDP this year will have been down 40-50%. Globally, current estimates suggest annual GDP will decline 5-7%. These are multiples of the declines we experienced during the financial crisis.  And there are so many questions that are still unanswered - whether about Covid-19’s disease progression, about society’s ability to contain it, about broad health issues over time, about the short and longer term economic consequences, about how employee and consumer behaviors will change.

In this context, no country or sector, no company, executive team or individual leader will be immune from COVID-19s impact and consequences. No strategy will survive fully intact. Moreover, the choices we face now about reopening economies and recommencing work safely are arguably more complex, difficult, and weighty than the decisions that were made to shut down.

We are in a collective Brody Moment. To extend the shark metaphor, Great Whites are raining from the sky around the world: What is it going to take to contain the virus? What does it mean to shut down and then try to restart entire industries (like airlines, hospitality, live entertainment?) How will companies and society navigate massive and immediate digital transformation, and so on? And what is truly amazing is the amount of upheaval we are experiencing all at once – think of the volume of Brody Moments related to both the pandemic but also to advancing social justice and combating systemic racism in the US and around the world.

My hope is that having been through all this, we don’t wait for a Brody Moment in climate change. If we do, it will have been too late.

David and David: What should decision-makers do to confront all this uncertainty?

Jonathan:  Pre-Covid, executives and boards typically responded to uncertainty in one of two ways. The first is to recognize its existence, depth and complexity, but become paralyzed by it. The second is to deny its existence by wishing it away, oversimplifying it, and/or being falsely confident in the outlook or veracity of their choices.

Instead, the right response to uncertainty is to embrace it and build it into decision-making. Our data and analytics can tell us about the past, but we can only guess, infer, wonder about, and imagine the future. Looking at your strategy and balance sheet through the window of different possible futures - making choices about mergers and acquisitions, partnerships, and evolution of ecosystems through that lens - is necessary and gives you more courage and conviction of choice. Ignoring uncertainty, or mis-analogizing from history, can lead to either unanticipated downsides or missed upsides.

One aspect of what is different now, though, is that the relevant uncertainties for individuals, businesses and governments look different depending on the timeframes we’re talking about. If you are considering the next six months, you need to look at scenarios related to the disease progression: How bad is the first or next wave going to be? Are we locking down again? What versions of containment can we achieve? Those are different from the economic scenarios you have to consider over the next six to eighteen months. Which are different again from the three- to five-year scenarios related to what a world remade by Covid-19 will look like, with very different futures depending on the ultimate severity of the pandemic, the level of social cohesion in response to the crisis, and how industries may be reshaped as a result.

David and David: What do you see ahead with respect to a ‘new normal’ after the crisis is over?

Jonathan: Different companies and organizations face different circumstances depending on the sectors to which they are exposed, their geographic footprint, and their financial capacity and strength. But across all those circumstances, we are entering into a world that will require more resilience, more agility, more safety, and more digitization. For all of us, Covid-19 has been a time machine to the future of work and to the future of customer experience. We are also in the midst of new bargains being struck between businesses and their employees, stakeholders, and customers, between governments and businesses, and between businesses, governments and society.

This is a reshaping moment, more profound than any we’ve ever experienced – a moment where each of leadership, trust, and strategy matter more than ever before.

David and David: What is getting in the way or will get in the way of people making the changes they need to make?

Jonathan: Three things. First, back to what I said earlier: you have to know what you know, know what you don’t or can’t know, and know the difference. If you are confused about the difference, you will struggle to accomplish the things that have the best odds of success.

Second, it is easy to get caught up in the intensity of the moment, but you must hold a longer time frame in view as you’re dealing with the urgent.

Finally, this is the moment to seek out and incorporate different perspectives in decision-making, despite the accelerated time frame. Listen to that person who disagrees with you with the most clarity and specificity. We don’t get to the best place on the other side of the pandemic if we don’t take into account a diversity of experiences, opinions, and points-of-view.

David and David: During these times, how can boards best contribute to leadership teams’ efforts?

Jonathan: Boards must maintain separation from management, yet also share the burden of the moment – by weighing trade-offs amongst all stakeholders, and by drawing upon their deep experience where relevant.  

More importantly, though, individual board members must ask the right and deliberate questions. Haphazard or lazy questions can drive waste and take the organization in the wrong directions; conversely the right ones can provide the provocations that help their organizations best deal with the crisis and beyond.

The purpose of asking questions isn’t to overwhelm the executive team or to catch them making mistakes, but to help them peer into the future and consider how that future connects to the choices, to the actions, to the inspiration of today. While many executives, appropriately, are still talking about what they need to do to survive and/or make their way through the pandemic, provocative board questions can help pull executives out of the today and help them, encourage them, to talk about how to redesign for the future.

In a moment fraught with complex choices about safety, about interactions with customers, about strengthening diversity and inclusion, and so on, the board must also ask questions that reflect those issues back to management and help them see the range of considerations they must weigh. For example: “As we’re thinking about re-opening, are we doing it in a way that’s safe, thoughtful, and inclusive? Are we recognizing all of the situations and circumstances of the individuals who work with us?”

David and David: Any other advice you can offer? Parting words?

Jonathan: We are in a moment where the choices we make and the actions we take will have a serious and lasting impact. We will all be remembered for those choices, the way we make them, and the way we make people feel. Right now, we need to lead with courage, transparency, genuine empathy, and trust. That’s a tough standard to which to aspire, but it’s a combination that has the best shot of producing a better future.

Original article posted on Forbes on July 20, 2020

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