As I have said repeatedly, COVID is accelerating change for all businesses, whether or not they recognize it.  A recent survey by the IBM Institute of Business Value concluded that “executives must accept that pandemic-induced changes in strategy, management, operations, and budgetary priorities are here to stay.” I see three significant shifts taking place.

1. How CEOs Lead
2. Changes in priorities
3. Changes in business models.

How CEOs Lead

1. Unlocking bolder (“10x”) aspirations. COVID caused most CEOs to question their assumptions about the pace and magnitude change attainable. The realization that a change in mindset can dramatically affect goal setting and the operating model, many CEOs are effecting changes in a few months that companies previously assumed would take years. The speed for many of these changes is down to employees working longer and harder; however, many CEOs also recognize that many employees have more time available with the stop in travel.
2. Elevating their “to be” list to the same level as “to do” in their operating models. With COVID, leadership has to change. CEOs’ priorities were setting up strategy, culture, and making people decisions at regular times. However, now it about maintaining morale and ensuring employees are prepared for whatever may come in the face of uncertainty. Thus, leaders are changing how they and their senior management team show up. Leaders now need to be empathetic and offer words of encouragement.  According to Lance Fritz, CEO of Union Pacific, “[Employees] need to see that their leadership is vulnerable, empathetic, and making decisions in accordance with our values, which I’d better be the living proof of.”
3. Fully embracing stakeholder capitalism. While I have also previously discussed embracing stakeholder capitalism; however, COVID has accelerated this trend as it has emphatically affirmed the interconnection and interdependence of businesses with their full range of stakeholders. CEOs are confronting tough decisions with profound human consequences every day. CEOs have realized that their choices are affecting their employees, communities, and suppliers. How they behave will have a long term effect on their business, especially as 87 percent of customers say that they will purchase from companies that support what they care about.
4. Harnessing the full power of their CEO peer networks. As a result of COVID, CEOs talk to one another much more and at a much greater rate. The belief is, “Let’s learn from each other. Let’s hold hands. Let’s commiserate.” They are achieving this through informal networks and groups like Vistage. The power of a Peer group where you can be vulnerable and get input into these hard decisions is immense. CEOs don’t have to feel like they are carrying all the weight themselves. During the Great Recession, Vistage member companies outperformed non-Vistage member companies [. ]

Changes in Priorities

Not only are CEOs changing the way they lead, but companies are finding that their priorities have changed dramatically! According to the recent IBM survey, companies will focus more inwardly over the next two years. Their top priorities now are:

As companies move away from just-in-time delivery, 40% of those surveyed identified the need for space capacity in their supply chains. However, about 60% said they were accelerating their organizations’ digital transformation, and three-quarters plan on building more robust I.T. capabilities.

Changes in Business Models

Finally, many companies have also changed their business models to address market changes resulting from COVID, including some clients. Some of the creative pivots are:

• Mandarin Oriental. As mentioned last week, many high-end hotel chains are supplying alternative residences for the wealthy. MO has not only done that; it seeks to deliver the luxury experience where you are rather than at a destination. The company promotes “Staycations at M.O.” at its properties if there is one in your city. These staycations offer early check-in, late check-out, a free bottle of wine, and credits for other purchases. However, if you don’t want to leave you home, MO says, “Just call room service.” They will deliver food, items from the cake shop, supplies from the spa, or other merchandise to your house.
• JD.com. For producers of alcoholic beverages, COVID was a considerable blow. During the Chinese shutdown, its e-commerce giant, JD.com, go D.J.s and performers to stage three hour live show online. During these shows, viewers could purchase alcoholic beverages from Rémy Martin to Budweiser and have it delivered to their doors with a single click. As a result, whiskey sales from “a single partner brand” increased eightfold during a day with the show. As a result, JD.com plans to continue its live music events but to expand the products it offers.
• David Dodge. As auto sales plunged nationwide, according to the Washington Post reports David Dodge in Glen Mills, Pa., the auto dealership sold more cars in July than in any previous month in its 15-year existence. David Kelleher, David Dodge’s owner, pivoted to meet the changing market. The company created a business development center to consolidate online leads and located it prominently just inside the front door. Salespeople now work phones, email, texts, and Zoom. They are using FaceTime to accompany customers on test drives. For those customers who want to stay socially distant, David Dodge allows the whole process online, and they deliver the vehicle to the customer’s home. Kelleher and his top salesperson, Mike McVeigh, doesn’t expect to return to the old ways once COVID is behind them.
• Chipotle Mexican Grill. For a company that had been struggling with several crises over the last few years, when COVID hit, Chipotle new it had to change its business model to survive. The model was for pickup orders to be its lifeline. The company added “digital kitchens,” which handle online orders for pickup, at those restaurants that didn’t already have them, to enable this pivot. In May, Chipotle announced it would add 8,000 new workers to meet the growing demand. In July, it needed to hire 10,000 more. The company has aggressively added “Chipotlanes,” drive-thru lanes exclusively for picking up digital orders. That business model requires more employees than traditional stores—hence all that hiring is much more profitable.

Cause for Concern

All these changes are requiring more from employees in terms of working longer and harder. As I have noted on numerous occasions, empathy is needed, and burnout is a huge issue. What is worrying is that IBM’s research, drawing from other surveys that included employees, found a disturbing wide gap between “employers significantly overestimating the effectiveness of their support and training efforts” and how employees feel about these measures.

Source: IBM Institute of Business Value

As CEOs and leaders, it is critical that as you face COVID and plan for changes in leadership style, changes in priorities, and pivots in your business model, you need to do more for your employees. They are scared, uncertain, working from with kids doing school virtually, potentially overwhelming debt (see below), and they need management to support them. Those leaders who don’t rise to this challenge will see the good employees leave and create a reputation stain that could last a generation.

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Introduction

Hubris has been a destructive force throughout history, and it seems to be rearing its ugly head again in the midst of the COVID-19 crisis. As we grapple with the ongoing pandemic, it is crucial to recognize the role hubris plays in decision-making and its potential impact on our lives and organizations. In this blog post, we will explore the concept of hubris, how it affects our response to COVID-19, and how we can learn from it to avoid making similar mistakes in our personal and professional lives.

What is Hubris?

Hubris is defined as excessive pride or arrogance that results from an inflated sense of self-worth or importance. It often leads to overconfidence, which can have disastrous consequences. Historically, hubris has been a driving force behind many conflicts, including World War II. In the context of the COVID-19 pandemic, hubris is manifesting itself in the denial of scientific evidence and expertise, as well as a disregard for the advice of public health officials.

COVID-19 and the Resurgence of Hubris

As COVID-19 cases continue to rise, the role of hubris in our response to the pandemic becomes increasingly evident. Some elected officials and members of the public are choosing to ignore the advice of public health experts and scientists, instead relying on their own beliefs and opinions. This is a dangerous approach, as it can lead to decisions that are not based on the most accurate and up-to-date information.

The problem with this mindset is that opinions are not facts. While everyone is entitled to their opinion, opinions are personal expressions of feelings or thoughts that may not be grounded in data or evidence. Conversely, facts are statements that can be proven true or false based on supporting data or evidence. By ignoring scientific evidence and expert advice, we are putting ourselves at greater risk and prolonging the devastating impact of the pandemic.

The Human and Economic Costs of Hubris

The denial of scientific evidence and expertise in the face of COVID-19 has had severe consequences regarding human lives and economic costs. As of now, over 130,000 people have died in the U.S. due to COVID-19, and this number continues to rise. In addition to the immediate loss of life, long-term health consequences exist for those who survive the virus. Research shows that survivors may experience strokes, blood clotting, heart, lung, and neurological damage. Furthermore, studies on SARS, a COVID precursor, indicate that psychiatric morbidities and chronic fatigue may persist for years after recovery.

These long-term health consequences will also have a lasting economic impact. As survivors struggle with increased health issues, the economic effects of COVID-19 will continue well beyond the development of a vaccine or the achievement of herd immunity. The cost of hubris in this context is immense, with severe repercussions for both human lives and the economy.

Learning from the COVID-19 Crisis: Avoiding Hubris in Our Own Lives

As we navigate the ongoing COVID-19 crisis, it is essential to recognize the dangers of hubris and take steps to avoid it in our personal and professional lives. Here are some suggestions for combating hubris:

1. Be open to new information and be willing to change your mind.
   When presented with new data or evidence, be open to reevaluating your beliefs and opinions. This flexibility will allow you to make more informed decisions.
2. Recognize the limits of your own knowledge and expertise.
   No one is an expert in everything, so it is crucial to acknowledge when you are out of your depth and seek advice from those with relevant expertise.
3. Emphasize facts over opinions.
   When making decisions, prioritize factual information and evidence over personal feelings or beliefs. This will help ensure that your choices are grounded in reality and have a solid foundation.
4. Foster a culture of humility and learning.
   In your personal and professional life, create an environment where people feel comfortable admitting and learning from their mistakes. This can help prevent the development of hubris and encourage continuous growth and improvement.
5. Encourage open dialogue and collaboration.
   Promote open communication and collaboration among team members, colleagues, and friends. This can help ensure that a variety of perspectives and expertise are considered, ultimately leading to better decision-making.
6. Be aware of confirmation bias.
   We all have a tendency to seek out information that confirms our existing beliefs while disregarding evidence that contradicts them. Be conscious of this tendency and actively work to challenge your own biases.
7. Practice empathy and compassion.
   Take the time to put yourself in others’ shoes and consider their perspectives and feelings. This can help to counteract the arrogance and self-centeredness that often accompany hubris.
8. Reflect on past experiences and learn from them.
   Regularly review your past decisions and actions, identifying instances where hubris may have played a role. Use these experiences as learning opportunities to prevent similar mistakes in the future.

Conclusion

The resurgence of hubris during the COVID-19 crisis serves as a stark reminder of the dangers of arrogance and overconfidence. By recognizing the role of hubris in our decision-making processes and taking steps to avoid it, we can minimize its destructive consequences on our lives and organizations. As we continue to navigate the pandemic, let us use this opportunity to learn from our mistakes and strive for humility, open-mindedness, and fact-based decision-making.

Copyright (c) 2020, Marc A. Borrelli

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