Why people remain key to success
Even though we see ourselves confronted with a daily increasing number of predictions ranging from simple “what we will learn from this crisis” to rather science-fictional visions of the future, in most cases, it is simply too early to tell what will have changed once this storm is over. The growing presence of such outlooks is, however, a good…
A blog post of 31. March 2020
Reading time: 5 minutes
Even though we see ourselves confronted with a daily increasing number of predictions ranging from simple “what we will learn from this crisis” to rather science-fictional visions of the future, in most cases, it is simply too early to tell what will have changed once this storm is over. The growing presence of such outlooks is, however, a good sign, as it reassures us of this bleak chapter’s finiteness. Indeed, the very latest news from Asia raises hope – production capacities are slowly ramped up, lockdowns are lifted, and children are going to school again. From east to west, a similar wave that started the crisis could now bring relief. Whether this will lead the world “back to normal” on a permanent basis remains to be seen. One thing is for sure – the economical, sociological, ecological and political impact of 2020 will reveal itself only gradually.
Nevertheless, with the following article, we would like to share our take on how the crisis could impact the global market for the best and brightest talent. In order to do so, however, we do not make predictions on what might change, but rather share our hypothesis of what will stay the same.
In times of crisis, companies need to know what to do and have people that take action
Much of the current economic fallout has been blamed on the fragility of global supply chains. Already showing their vulnerability during the Sino-US trade war, the pandemic brutally revealed that a globally distributed production is also globally disruptable. Now, with most of the global production on standby, boarders closed and international travel almost non-existent, many predict that the integration of global supply chains – built up over decades – could be scaled back or even stopped. Given the impact of the crisis, this seems plausible. Yet, if you look at the topic more closely, it seems less realistic. Thankfully, what is on standby for now can be activated again. Production facilities are in place, processes are established, staff is trained. Bringing all this “home” might require disproportionate investment, resulting in higher costs (and thus higher prices for the end consumer), that nobody, especially after a crisis, could be willing to bear.
Nevertheless, the current system has shown that it is not “immune” to such a blow. Therefore, going forward, two main elements will need to be brought more into focus – Business Continuity Plans (BCPs) and the right leaders on the ground to take action.
Having an up-to-date, readily deployable BCP in place for your organization has long been a rather, if any, hypothetical exercise. But the question what to do in the case of power shortages, natural catastrophes, external attacks, or, yes, a pandemic, has to be regularly thought through and its answer subsequently adapted. Companies must at least in theory know how to evacuate staff, relocate teams, keep production operational and thus (partly) enable the business to continue running. On a financial side, this also includes comfortable liquidity buffers to ensure leeway during storms that stay longer than expected.
During a crisis, centrally organized, top-down managed organizations – especially when they span across more than one country – reveal their shortcomings. In the absence of clear guidelines from headquarters, leadership skills on a local level become the currency to rely on. Internationally, this requires first and foremost the right people on the ground. Besides looking for leaders with both the verve and expertise needed to grow your business away from home, this also entails a certain readiness to take on additional responsibilities and firefight once a crisis is hitting. When the connection to headquarters might be (temporarily) lost and unthinkable scenarios become reality, it is crucial to have people in place that keep things running, even if or especially when this requires independent decision-making. Here – and more than during “normal” times – a deep familiarity with the local market and its culture as well as the knowledge of who to turn to in case of trouble will make a difference. Such independence does not only save time and precious resources, it also fully reaps the fruits of diversification – in both negative and positive market scenarios. Now that the first signs of recovery are tentatively starting to blossom in Asia, internationally organized companies are poised to benefit from their entities there (both on a production and sales side), to ease the current hibernation effects in Europe and the US.
With less on-site visits, selecting your local leaders becomes even more important
Amounting to around 10% of global GDP (2018, World Travel and Tourism Council), the Tourism & Travel industry is a major economical pillar. The pace at which it has expanded over the past decades can – in the best sense – be described as breathtaking. Whether we will see as many cruise ships in Venice or €4.99 Ryanair flights in a post corona age as before remains to be seen. But the urge and need for people to travel – for both for business and leisure – will persist.
Nevertheless, on a professional level, the crisis currently shows us that remote work works. That you do not need to spend half a day in the air for one single meeting. That physical presence is not always necessary. That services like Skype for Business, Zoom or MS Teams do bridge the gap. And most importantly, companies are made aware right now of what they can save. All around the world, travel expenses were brought to a halt – an aspect that has occurred during none of the global crises in the past. A probable learning might be that the need for professional travel has simply been overestimated.
Here again, the importance of your local leadership teams comes into play. If visits from headquarters (and thus monitoring?) become less frequent, self-organization, independence, assertiveness and an entrepreneurial mindset gain importance. So does the use of virtual communication tools. Profound local expertise and a global mindset that does not constantly need to be fed with air miles complete such profiles. This represents a considerable shift from the classical delegate model that generations of expats have shaped. Here again, finding the right talent will be key.
Whatever this crisis will teach us, it surely underlines the importance of your most precious resource when it comes to doing business – both at home and far away: your people.
For further questions, please contact Felix Bischoff, Head of International Office, email@example.com)
With 26 offices in 14 countries, Kienbaum is the ideal partner for the development of your organization’s full potential – not only in Germany and Europe, but all around the globe. Thanks to decades of international presence, Kienbaum offers you an unparalleled understanding of local markets. From Atlanta to Zurich, our transnational expertise spreads across the most important economic centers and regions worldwide.