Out of the Covid-19 crisis
As the Covid-19 tsunami grinds through our families, our organisations and our economies, I am already sensing that, when the virus recedes, it will leave a very different landscape.
People and principles
A crisis like this is a true test of organisational resilience in a multitude of ways and is an especially testing time for our people. As Andy Crossley of Oakland Group eloquently describes, it is the organisations with truly principled cultures that will do best during this emergency. As we look post Covid-19, reinventing an organisation is only possible when a specific culture of attitudes and behaviours lines up with corporate strategy and systems, and when a critical situation like this hits, the right people and principles stand organisations in good stead.
Systems, tools and transformation
Organisations with robust management systems, policies and plans will of course have had a head start on those that don’t. And the CQI is no exception. If we had truly practised our business continuity plan, we would have been in an even better position than we are now. Equally, those with appropriate tools in place will be well-equipped as they deal with problems in short order. For example, the agile principles brought to life by Jo Dowdall of Catalyst Consulting and the application of ‘crisis management huddles’ that PMI’s Rich Seddon presented in a recent webinar, will help teams and organisations to navigate COVID-19. And then there is remote working. Wide-eyed, we realise it is possible: audits can be done off-site and meetings can be held virtually. These kinds of principles and tools will help organisations in the 21st century to sustain ever-shifting business models and customer expectations when the pandemic is over. However, quality systems and tools can’t be implemented overnight; they require competence and practice to hone and improve them. The realisation from this coronavirus episode that we really can improve rapidly, if we need and want to, might give transformative improvement renewed momentum – but only with the appropriately honed systems and tools, and competent people.
Purpose and responsibility
With ‘shareholder capitalism’ already in the spotlight, society is paying special attention to who is ‘bailed out’ this time round and what part corporations play. Maximilien van Gaver gives an interesting Cook’s tour of the landscape facing non-executive boards in his recent Board Intelligence opinion piece. From this, it seems likely that society’s tolerance of firms seeking bailouts, after pursuing debt-fuelled share buybacks, will be severely tested (see for example, US Airlines Spent 96% of Free Cash Flow on Buybacks). In the 1980s Dr W. Edwards Deming (notably in his 1986 book Out of the Crisis), highlighted the need for management not to be judged by the quarterly dividend alone. He also stressed the importance of innovative plans to stay in business, protect investment, ensure future dividends, and provide jobs through improved products and services. Mark Goyder notes that even earlier, in 1951 in fact, George Goyder considered that ‘(Business) can no longer be regarded as a private arrangement for enriching shareholders…. If the system is to continue, some way must be found to embrace the many interests.’ And likewise in 2016, Estelle Clark told the IoD’s Director magazine, that:
Society rightly believes that a corporate fish rots from the head, a complex operating environment being no excuse for doing business at the expense of doing the right thing
That said, the private sector response to Covid-19 has been impressive in many areas. This ranges from Dyson manufacturing ventilators, to the Royal Academy of Engineering stepping in to support supply chains and coordinate essential supplies, through to quality consultancies giving expertise to develop much needed medical equipment. This is a lesson in corporate responsibility for the future.
Real social responsibility is, firstly, about the organisation doing what it does really well for all its stakeholders, and, secondly, about using its unique resources and capabilities to make the world a better place – and not only in times like these. The ‘ESG’ and stakeholder concepts have found their way into recent editions of ISO management systems standards as well as the new-look EFQM excellence model. They are also now becoming part of corporate governance codes. The Covid-19 situation may accelerate this move to ‘stakeholder capitalism’ and the concept of what really makes a ‘quality organisation’.
Risk and ‘Big Hairy’ problems
Social media is awash with individuals, teams and organisations marvelling at their ability to quickly adapt or introduce new processes, ways of working and event products and services. If there is one positive that comes from the current global situation it should be that we can address big hairy problems at pace. These challenges can involve the world, such as getting to net zero carbon, affect nations, such as tackling social care deficits, or apply to organisations, such as transforming business models in the digital age.
In 2018 Bill Gates warned of a pandemic and how poorly prepared we would be. Covid-19 illustrates that a proper approach to risk management is today’s real concern. Coronavirus is our chance to enhance national and global risk management. However, we need to make use of quality tools to properly understand trends, systems and root cause, and to learn lessons when things go wrong.
Out of the crisis
When I was in Saudi Arabia in 2015 supporting the Saudi development of a national quality strategy, I was asked about the UK’s experience with quality management. My response was that a real focus on improving the quality of products, services and organisations often comes from a crisis at an organisational, sector or national level. The UK’s last national quality focus was in the 1980s in response to the nation’s rapidly diminishing competitiveness.
The impact of Covid-19 is profound, wide-reaching and ongoing. However, it also presents us with a real opportunity for change that we should not waste.
Vince Desmond CEO