Episode #176 Covid-19 Challenges Leaders' Communication Skills

Most leaders tend to underestimate the importance of communicating with their teams even in normal times. We are now definitely far removed from “normal times”. Panic buying, lockdowns, quarantine isolation, working from home are just some of the features of the response to the virus. The health issue gets most of the focus, but the real dangers lurking in the shadows are economic. People are not yet connecting what all this dislocation will mean for business. An economic downturn can get sparked by the stock market crashing, a major collapse in consumer sending, rising unemployment rates, trade restrictions, and supply chains grinding to a halt. Actually, we are facing all of these right now.

The virus is global and so are the effects on business. It won’t be one country or a couple of countries being impacted. The interlocking of business means we face an escalation of economic effects across the world. The virus will mainly kill those already in poor health or over the age of seventy, but the economic disruption will hit billions of people and kill off millions of businesses. As the leader, what are the messages we need to be presenting to our team and what are the mediums we should be using?

Japan is the most experienced capitalist country dealing with the virus. We are six weeks ahead of everyone else, so we can see the business impact of the virus, as it drives down the basis of commerce – the free exchange of goods and services. This exchange is grinding much more slowly than before and that has ramifications for small medium enterprises’ survival.

PM Abe suddenly closes all schools elementary level and above and this immediately hits the school lunch suppliers, the part time workers at the schools, and this impact is transferred down the food chain. Events are not held, tourists both internal and external stop travelling, restaurants are emptying as people stay at home, Hotels lose bookings etc., etc., and everyone expecting related revenue gets nothing now. They in turn stop spending too, because they are in a tough cash flow situation.

The initial leader communication efforts were focused on avoiding the virus and the health issues involved but things are moving much faster now and business bankruptcy is a prospect which must be faced. The economy was already slowing down, because of the trade friction between the US and China and the additional two percent increase in the consumption tax. The virus economy impact is already pushing Japan further into recession and the possibility of no Olympics being held will just add to the damage to business sector. The danger is that the virus dissipates, as the temperatures climb, only to return again in Autumn. Things may start to improve, only to fall back in a few months time and we go through all of this disruption again.

The time for a leader in Japan, to gather the troops together for a town hall has passed. No one wants to get together in a big group, because of the risk of contagion from people who may not even be aware they are infected. That means we are down to video calls and emails. People are increasingly working at home or are at work, but avoiding human contact as much as possible.

The messaging needs to be transparent, factual and realistic. Papering over the economic ramifications of the approaching recession won’t fly with a sceptical workforce, who have already seen the blunt incompetence of Japan’s political leadership. Trying to pretty up the money situation is pointless. You tell everyone that “we are fine” financially and then a few weeks later, you may be telling people they need to take a pay cut or take unpaid leave. It doesn’t take long for small companies to burn through their cash reserves.

The leader needs to communicate the real situation and get everyone’s support to weather the storm together. The danger is people will lose faith in you, and faith in the company. If you survive the economic impact of the virus, you may find your best people will leave when the opportunity presents itself, as things stabilise. They will look to go to a bigger, more robust company that provides a safer financial situation for them. You come out of this crisis substantially weakened and then it gets worse again.

Being honest, transparent and flagging what may need to be done to survive can have the effect of rallying everyone together to fight. This effort needs constant communication with the whole team, a good chunk of whom may be sitting at home with lots of time on their hands, just worrying about their future. In this situation you cannot over-communicate what is happening. Constant updating should be the norm. Communicating your confidence that the company will make it through this and come out stronger must be the message. People need repeated reassurances from the leader. Are you ready?

Free Live On Line Stress Management Sessions

On a separate note, we are running public Live On Line Stress Management classes, which will be free to all attendees on March 19 (English) and 24th (Japanese) and April 16th (Japanese) and 17th (English). We are also offering the same thing as an in-house programme, delivered Live On Line for our existing clients and for prospective clients. This allows us to help our clients and our community.

The registration process for these free stress management sessions is being offered on our website, so please go to this specific page: http://bit.ly/dale_stress_e