Leading Through Crisis in Manufacturing

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We are over halfway through 2020 and it has been a wild and unpredictable year by far. The  year started off with a low 3.6 percent unemployment rate in the U.S., and suddenly surged to 14.7 percent in April as COVID-19 changed the job market almost overnight. Millions, deemed non-essential employees, were sent home to work, creating a new type of workplace that most had never experienced before. For many manufacturing companies, teams that worked side-by-side on-site before the pandemic are now broken up into different shifts and into different locations.

What does this mean for manufacturing leaders? 

Adopt Transparent Communication

According to an article in the Harvard Business Review, leaders that successfully managed the crisis reported they routinely kept their teams up to date on the state of the company. In one example cited in the article, the CEO of a major engineering and technology company, when asked by employees why the company shut down one of its global research and development centers, said, “If we cannot survive the next three months, we will have no future at all.” 

There is a lot of noise in high stress situations during a crisis, which reduces people’s ability to process information by 80% on average. People have difficulty hearing, understanding and remembering information during stressful times. Though this level of transparency may be difficult to digest for some, ultimately during these uncertain times it’s important to be open and concise in your communication.  

Leading Through Change

There has been a shortage of personal protective gear to keep essential workers safe during these turbulent times. As companies scramble to manufacture masks and gowns, shoe brands are donating shoes to medical professionals, including Allbirds. The company knew the community needed its help and despite the economic hit that many retail brands have been experiencing, Allbirds donated more than $500,000 worth of shoes to medical professionals. There was a long list of healthcare workers requesting shoes, so the company pivoted to a “buy-one-give-one” model. Customers can bundle a shoe purchase with a donation that will split the cost of delivering a pair of shoes to someone on the list.

Executives at a number of different companies are stepping up to the plate to support their employees. For example, Patagonia’s retail stores remain closed but the company’s CEO has agreed to continue paying all employees – supporting their team during these difficult times. Other CEOs have committed to not lay off employees, including LinkedIn CEO Jeff Weiner, Twitter and Square CEO Jack Dorsey, Morgan Stanley CEO James Gorman and Citigroup CEO Mike Corbat.

Rethink Your Leadership Style

Four months in, the crisis continues to unfold. It reveals that the future of some organizations will be resilient, while for others it remains bleak. The actions of corporate executive leaders, in the middle of the crisis, will determine their fate. What is required of leaders? Why did the shareholders and directors put these individuals in charge of companies? We have seen leaders step up and embrace the responsibilities that are bestowed upon them, and we have seen corporate executives cower, not be assertive or make proper decisions. They would rather follow the herd instead of leading.  

A crisis brings about complexity, change, difficult situations and critical decision making, which require executives to manage a situation and be effective leaders. To manage the situation means to address the urgent present needs, by making immediate decisions, and by allocating resources. While, leading involves forward-thinking strategy and planning. This means seeing beyond the immediate present to anticipate foreseeable hurdles.   

We are now in a fight for survival – the health and livelihoods of many are at stake. There will be a COVID-19 resurgence, but how can leadership be ready and not slowed down? As companies return to work, and in particular as manufacturing operations open up and frontline factory workers return to work, they must adapt to change and adopt technology in order to be more resilient. New ways of working require new leadership styles. 

Around the world I’ve been working with a New Generation of Manufacturing Leaders in association with the World Economic Forum. While at times it’s easy to feel discouraged about the news of the virus and the repercussions debilitating the economy, we also have a rising generation of leaders that are eager to embrace the challenges of manufacturing and the shifting consumer demand. We see change all around us following COVID-19 and leaders are emerging.

Focus on an Agile Strategy 

Think about your strategy and a path forward. It isn’t possible to anticipate every event or scenario that may occur which might impact your plan. Executives need to be agile in order to adapt to plans in response to unexpected issues, while also needing to balance flexibility with speed.

According to Harvard Business School, 29 percent of managers said their company reacted too slowly, 24 percent responded that their company reacted with sufficient speed, but in doing so lost sight of their strategy. Executives must adopt an agile mindset to lead effectively. Switching from a commanding to coaching leadership style is an example of this. Ultimately, you can collaboratively work through this by using two-way communication, focusing on positive language, and being open and clear in your communication. Establishing a feedback loop, for example, through daily check-ins can allow you to give and receive feedback. These sessions can be leveraged to create a dialogue to eliminate barriers and drive progress.

Lessons Learned

Leadership is about inspiring and motivating others to accomplish a goal. Through crises, leaders emerge. Leaders in companies need to focus on building teams and unit cohesion. If you want to lead a company, you need to understand your team and what motivates them. 

A recovery will take bold ideas and strong commitments from company leaders to pull workers off the sidelines and put them back into the workforce. Leaders should commit that humans are their most valuable asset. From my experience working through crises, here are a few lessons learned:   

  • Rise up – Don’t be afraid to take a stand on social or health responsibilities.

  • Be bold and be decisive – The worst position is to not take a position at all. Lead from the front. A team should always know its leader's position. Inaction does more harm than good and hurts people. 

  • Be authentic – Leaders need to be themselves, not what someone else thinks they should be. Your team needs to know that you, too, are human.  

  • Be empathetic – Empathy is not the same as sympathy; they’re very different. Leaders need to understand their team members' mental state in returning to work. Here’s what I mean: 

    • Your team wants to work. Our human nature is to produce and create value. Your team feels fulfilled with meaningful work. They have deep desires to return, produce and provide for their families. Let’s empower them with the skills and technology to do so intelligently. Leaders from every level need to leverage new and existing technology to find new ways of working. Your most valuable asset is your team, yet many companies have them working with decades-old tools and technology. Invest in your team and it will pay off.

    • Leaders must understand the psychological nature of a pandemic and the effect it has on their team. Soldiers returning from war can have post traumatic stress disorder. This is caused by a constant, 24/7 heightened awareness of what is happening around them. Soldiers don’t know where the next attack is coming from – direct or indirect, or IED or green-on-blue. Similarly, consider the stress on workers who are constantly told that they might get COVID-19 at the market, office or on the bus, or asymptomatically spreading it to family members.

This is an extremely stressful time for many people. Leaders need to understand and empathize with their team members. From pandemic issues to societal problems at large, the leaders of tomorrow require skill sets that can adapt and facilitate the emergence of leadership.

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