Welcome to our Team Talks Series. Candid conversations on current events recorded on April 16th, 2020.
The current crisis is impacting businesses everywhere.
In response, we are evolving our practice of Talent to Value. As the pandemic unfolds, this series of “Team Talks” will give you an insider’s look at what we are thinking about and doing to help CEOs keep talent connected to value.
In this initial conversation, our founders share what they have observed in the last few weeks on the ground with clients. Watch the video or read the transcript to learn more.
If I think about what we're seeing from a themes perspective, what stands out is that in the first few weeks there was focused activity around the shutdown. That was something concrete which was happening. It required an immense amount of focus from the entire leadership team. But as the weeks have been going by, I can see the conversations are more around uncertainty. And the focus seems to not be that lasered. This is the new phase of complete uncertainty and the focus has now gone into what does this mean for everybody, what does it mean for me, for my business.
I would agree. Look at our core thesis. Change hits, value shifts, money moves and talent gets disconnected. I would say, at least in my lifetime and probably in our collective lifetimes, there's never been a bigger change that has hit and has hit collectively. It has hit everybody across the world in a similar way. And I think the dislocation to value is huge, and the talent disconnect in terms of what's the new work and who's going to do it.
We are in unprecedented times.
What I see out there is that in the initial phase, what you're calling the shutdown, there is a little bit of energy around personal survival and then a lot of energy around my company’s survival. A laser focus on saying, “Hey, what do I do about cash, and costs, and debt governance, and....?”
So there is a big concrete thing that people are rightly gravitating to. I think it's going from there to what you're calling uncertainty.
I would say there's a little bit of a crisis of judgment. That is the phase I feel we are in. There's a crisis of judgment on how hard is it going to come down? How long is it going to be like this? And how fast will it come back? I look around the world and I say, forget my friends and the corporate world. If I just look at government leaders, people who have the world's best specialists, the best economists, the best medical people advising them. I look at the judgments that different country heads are taking around the world: they are so wildly different to the same set of facts. That's playing out in the corporate world as well. It is not like we are out of the survival phase, but I think people know what the kinds of things are that they have to do. You have companies going after cash. There's a plan and people know the plan. But, to your point on uncertainty, what is next?
I think it's going to be really interesting to look at what calls CEOs take with the same set of facts—and why this will be different from how world leaders have taken their wildly different calls. If there is a human cost created by government decisions—and there is a very wide variation in the human cost of those decisions—I think we will see a similarly wide gyration of value destruction, value preservation, or new value alphas because of this same crisis of judgment.
So if we were to be useful in the world, how could we be helping with this crisis of judgment today?
I strongly agree with everything that you both have said. We have been talking a lot about the necessity for new tools to be able to reconnect talent to value when a change hits, the value shifts, and the talent gets disconnected or dislocated relative to the value. What we're seeing is that the process and the tools that we've been working on applied in a lightweight, fast-focused way can really help people.
We've also talked a lot about bending the curve. When we look at the tools that a leader has to actually bend the curve, I see a difference now. All the curves that we had been looking [at] during the extended period of economic expansion had been [going] up and to the right. Now you have a curve which is shaped very differently. So, it's a curve that goes down very quickly with a shutdown. How long is it going to stay down? [That] determines the trough. How much of it is going to come back when we reopen? These are judgment points.
I've watched leaders—to your point, Shefali—and there was this focus on, “Okay, we've got to get it shut down for medical reasons, as well as economic reasons. We've got to get this thing shut down effectively.” There was, I think, a hope that the curve would be shaped like a V. Then there are these storm clouds gathering on the horizon that are washing over these choices that were initially made about how far it is going to go down. It looks like we'll be closed for a month. Or it looks like we'll be closed for six weeks. We'll figure this thing out. Now we're talking about eight weeks, 10 weeks, six months, 12 months.
How deep is it going to go and how long is it going to last? And how fast is that storm washing over us? Was the call I made about the severity of this thing even close?
You're watching world leaders struggle with this. I'm watching business leaders struggle with it big time. Whoa, here it comes. If we're in for an extended thing, the focus shifts quickly from are we going to survive to cost. Have I got a cost structure that is set up relative to how deep it's going to go, how long it's going to last, and what it's going to look like when it comes back?
There is this really interesting spirit of innovation that is occurring at every phase of this. We're seeing new ideas and new ways of thinking and acting. And so, when we think about talent to value as a tool set for bending the curve in normal times, now we're talking about understanding the shape of your curve. Each industry, each business is very different. These [Talent to Value tools] become curve-shaping tools.
When every curve was to the right and up, every CEO and business leader had a three or four-year time frame to bend that curve. I think people are now probably working on three times zones together.
There is a 40-day time frame and a four-month timeframe and a four-year timeframe. And you have to take actions for all three together. You had a value [axis] over a time axis—and your time axis just broke into three. It’s not like you can do them in sequence. You have to take the cash options. And if you want the trough to be long, you have to take the 40-day, the four-month action, and the four-year thing (you can't let that go off the cliff). So there are actions required at the same time across all three phases. One of the things I noticed is that business leaders will over-rotate on one versus the other. So that would be the other crisis. It's not just picking your curve, but how you will spend your personal energy on different parts of the curve today.
Shefali, you often talk about there being a very strong human [component to this]. This is not a math exercise which is playing out. This is a judgment and a human exercise. You were telling me yesterday about confirmation bias and when you don't know what to do....
I find it fascinating [to see a shift to] focus on opportunity. All my clients who I'm working with, if there is a continued focus that moves from cash and shutdown to something which is an opportunity, and you can latch onto it, it changes the energy of all the meetings completely. So for our business, I went through that phase of shutdown. I would have had, at best, eight workshops and helped 200 people. But the minute I saw that now I'll have a virtual tool which can give us an opportunity of going global for my business... if I can change that focus from shutdown to that opportunity, remove that uncertainty phase and latch onto the next focus, I mean, it’s limitless if I think about it.
The power of humanity and the power of human creativity is like bottled energy. In a few clients, I can see them latch onto whatever that alpha opportunity is. And because the world has changed, people are going to accept certain things that they couldn't before. I mean, if anybody wanted to come for my program, which is $20,000, they just assumed it's face-to-face. Now that assumption is not there anymore. So suddenly I have an alpha opportunity.
I've seen the play of human creativity at its best, the genius of humanity and humanness
I've seen the play of human creativity at its best, the genius of humanity and humanness. On the other hand, I've also seen CEOs who have completely lost their focus of shutdown and get into this whole thing about biases and “If we don't know what to do, we do what we know will work, what we know.” I've seen people who are great at analysis get deeper into the analysis. But it's uncertain, so what [is the value of the extra] analysis? Are you going to create six scenarios versus the three that you're normally used to? They're getting deeper and deeper into that because that's what they know, but it's creating even more uncertainty.
I was talking to a CEO last night, a very thoughtful person. And he said that when this started, he created four different degrees of difficulty that this was going to create for his business. What he thought was plausible was scenario one and two. He said, “We meet now every day as a team and we look at it and it has taken us exactly eight days to get to scenario four. I just can't believe how quickly the whole thing shifted. Now I'm working on a whole range of scenarios that eight days ago were unthinkable. It's crazy.”
You know this whole thing of the new alpha that something like this presents. If we were doing our equivalent of an eight-day diary, like your CEO, I actually think it's way too early to be talking about the big alpha because people are currently going through this eight-day experience you just talked about. “I underestimated it, I undercalled it, I undercalled it again, I undercalled it again.”
[Say] I used to be a restaurant with wine being my main attraction. I never delivered wine because I wanted people to come and buy it from the restaurant and, therefore, eat at the restaurant. I've suddenly pivoted to wine delivery because that was my brand.
A wine club....
Opportunistic for now.
Think about the three time vectors that we talked about. The shutdown phase is work that you have to do over the next two, three, four or five weeks. There is a re-open phase, which is dependent on how long you expect things to be quiet—and a new alpha [phase]. The sense I get when I look around is it's early for the kind of things, Shefali, that you're experiencing right now with the business. I think you are an outlier in that you’ve gone through a big pivot in your business. Maybe part of that is because your shutdown did not have to be as harsh. We are a secure business.
I have a firm that I work with which employs close to 300,000 employees. In the last five weeks, they furloughed 100,000 people. It's just I think not humanly possible to be sitting there thinking, “How am I going to get back on the big value curve and really change the world?”. They are, of course, thinking opportunistically about not losing their workforce, what are the creative things they can do with cash and real estate, and so on and so forth. If this was a weekly diary we were doing and we are in week five, we are probably at that phase in the curve where everyday people are realizing the severity of this and the fact that this is not a four-week thing. I had a colleague in the restaurant business who specifically told me that they got a call on the 19th of January, one day before Chinese New Year, that they had to shut down the restaurant chain. And he remembered thinking, “Could we extend it by one or two days... because it's Chinese New Year?” But they made the right call and they shut it. They reopened on 19th of March.
I sat there thinking, “Okay, so this is going to be an eight-week thing.” And I think, as a business leader myself, as I look at my clients, every day you're realizing it may not be an eight-week thing. Even if it's an eight-week thing, the overhang is going to be long. Maybe the curve is not a V or a U. Maybe it's a W. Maybe a sine curve, [in] which you will have a series of shutdowns. Those are the things which are heavy on my mind with the business leaders right now.
To your point, you need a bridge if you need to start thinking of another phase. Because it's very hard to be in that high focus and then also be creative.
You can't have survival energy and creative energy sitting in one pot. Shefali: And yet necessity is the mother of invention. Sumeet: I guess that's the frame. Are you in a new necessity world? Or are you trying to survive? That's exactly the spectrum.
I have to say, as a coach, you'll always be surprised at the human potential. When you're really pushed to the wall is when your biggest strength comes out.
I love your thought about bridges. Let's not lose that. If this is hard, as a CEO you should be thinking, “I will need a bridge. I don't have an option but to think about all these three phases. And it is not humanly possible to think about these three phases together.” So being really thoughtful about these bridges is a really cool thought.
We are actually creating workshops because the clients desperately need our help at this point in time. So we [are] creating workshops to help CEOs think through these three phases and that's why we've been debating this design of the workshop and how do we create bridges. Because you do want people to start moving beyond the shutdown and saying, “What does that mean for sustaining [the business]?” Slightly medium-term thinking.
I was struggling to get into this expansive thought leader world when I've just come from like a 2.5-hour [client session]. You can't: you're a human being. [That is] what we are asking our business leaders for today. This is the big challenge of their careers. Jack Welch used to say that anyone can grow in the short term or the long term. I think it is hard. We are asking our business leaders to actually have a 40-day, four-month and a four-year plan together and continuously swivel between that. That's a human challenge for which you need transitions.