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next normal
Leading with resolve through the
coronavirus pandemic
May 2020
Cover image:
© Cultura RF/Getty Images
May 2020
Introduction
On March 11, 2020, the World Health Organization formally declared COVID-19 a pandemic, underscoring
the precipitous global uncertainty that had plunged lives and livelihoods into a still-unfolding crisis.
Just two months later, daily reports of outbreaks—and of waxing and waning infection and mortality rates—
continue to heighten anxiety, stir grief, and cast into question the contours of our collective social and
economic future. Never in modern history have countries had to ask citizens around the world to stay home,
curb travel, and maintain physical distance to preserve the health of families, colleagues, neighbors, and
friends. And never have we seen job loss spike so fast, nor the threat of economic distress loom so large.
In this unprecedented reality, we are also witnessing the beginnings of a dramatic restructuring of the
social and economic order—the emergence of a new era that we view as the “next normal.” Dialogue and
debate have only just begun on the shape this next normal will take. But since the onset of the pandemic,
McKinsey has published a rapidly growing collection of insights (at least 250, at this two-month mark)
on the impact of COVID-19 on the economy, the workforce, and the gamut of functions and industries,
both globally and in specific regions across the world. We have collected and curated the first 100 of
these articles into four compendiums, organized by the initial stages of the path we see as leading from
the current crisis to the post-pandemic era—the next normal that will materialize after the battle against
coronavirus has been won.
These initial stages are Resolve, Resilience, and Return; as we progress, they will be followed by
Reimagination and Reform.
In this first compendium, The path to the next normal, we curate a selection of articles related to the initial
stage, Resolve: how to confront the crisis, lead with purpose, and determine the scale and pace of action
necessary to navigate toward greater resilience. We set forth strategies for keeping businesses and other
institutions running—organizing a nerve center, for example, and enabling communities to work, and
learn, remotely. And we offer examples to mobilize leaders across boards and the C-suite. At the time of
this publication, the course of the pandemic remains unclear, and safeguarding both lives and livelihoods
remains an exigent priority. We hope these insights begin to illuminate the path toward a future still in flux—
and inspire leaders with the necessary resolve to help forge the next normal.
You can download this and three other compendiums at McKinsey.com/pathbeyondcovid-19, as well as
find these and our entire collection of individual insights at McKinsey.com/covid-19.
Raju Narisetti
Global Publishing Director Elect
McKinsey Publishing
2
Contents
Charting a purposeful Organizing the Experimenting
path to the next normal response with remote education
at scale
6 Beyond coronavirus: The path 58 Responding to coronavirus:
to the next normal The minimum viable nerve center 114 Coronavirus and the campus:
How can US higher education
organize to respond?
11 Demonstrating corporate 66 Getting ahead of the next stage
purpose in the time of of the coronavirus crisis
coronavirus 120 Coronavirus: How should US
higher education plan for an
77 To weather a crisis, build a uncertain future?
network of teams
3
Charting
a purposeful
path to the
next normal
6
Beyond coronavirus: The
path to the next normal
11
Demonstrating corporate
purpose in the time of the
coronavirus
4
5
© Baona/Getty Images
The crisis will reveal not just vulnerabilities but In most economies, a healthcare system little
opportunities to improve the performance of changed since its creation post–World War II will
businesses. Leaders will need to reconsider need to determine how to meet such a rapid
which costs are truly fixed versus variable, as the surge in patient volume, managing seamlessly
shutting down of huge swaths of production sheds across in-person and virtual care. Public-
light on what is ultimately required versus nice to health approaches, in an interconnected and
have. Decisions about how far to flex operations highly mobile world, must rethink the speed
without loss of efficiency will likewise be informed and global coordination with which they
by the experience of closing down much of global need to react. Policies on critical healthcare
production. Opportunities to push the envelope of infrastructure, strategic reserves of key supplies,
technology adoption will be accelerated by rapid and contingency production facilities for critical
learning about what it takes to drive productivity medical equipment will all need to be addressed.
when labor is unavailable. The result: a stronger Managers of the financial system and the
sense of what makes business more resilient to economy, having learned from the economically
Kevin Sneader is the global managing partner of McKinsey & Company and is based in Hong Kong. Shubham Singhal is a
senior partner in McKinsey’s Detroit office and the global leader of the Healthcare Systems & Services Practice.
Demonstrating corporate
purpose in the time of the
coronavirus
Companies will define what they do in the crucible of COVID-19
response—or be defined by it. Here’s how to frame the challenge.
In boardrooms real and virtual, frantic questions Understand how acute your
have the floor. How long will this last? How will we stakeholders’ needs are now
pay furloughed workers? What are our peers doing? Examine exactly what is at stake for your employees,
What should we do first? Global corporations have communities, customers, partners, and owners.
never had as much power as they do right now to All will have urgent, rapidly evolving needs that
leverage their scale to benefit society in a time you should fully understand and prioritize. Some
of global crisis. Executives have also never had a of these needs will be new and require creative
more intense spotlight trained on their behaviors thinking. Listen carefully to stakeholders that
and actions. In moments of crisis, the default are well placed to inform you. Among grocers, for
expectation is that businesses will hunker down example, the needs of employees, customers,
and focus on bottom-line fundamentals. Indeed, and service to broader society often stand front
many CEOs feel constrained to making defensive and center. Nonetheless, stories of some grocers
moves to protect their businesses. But in this crisis, gouging prices have surfaced as the crisis has
stakeholder needs are already so acute that the intensified. Others, such as Canadian grocer
opportunity for businesses to make an indelible Loblaws, moved quickly, as physical-distancing
mark with human support, empathy, and purpose is measures spread, to open stores early for elderly
greater than it has ever been. shoppers while also increasing compensation for
frontline workers and pledging to keep prices at
Lessons from the past loom large. During what feels prepandemic levels.
like a war, the words and images of wartime leaders
echo in our consciousness as icons of resilience and Prepare for tension, too, as trade-offs arise among
human concern. In previous periods of economic stakeholder groups, each with their own important
shock, executives’ actions, both good and bad, needs. For example, increasing the pay of frontline
lodged in company histories and forged perceptions workers might raise the prospect of cutting back
that have endured for years. Decisions made during on supplier bills. For retailers and delivery services,
this crisis will likewise shape a corporation’s identity shutting down warehouses temporarily to keep
and tell a story that will leave traces long after workers safe might mean customers have to wait
COVID-19 has been quelled. longer for deliveries.
Bring your greatest strengths to bear an organization. Do your choices align with your
What strengths does your organization possess that identity? Everything you do now will be analyzed
you can apply to make the biggest difference for your after the dust settles. Will your actions and identity
stakeholders? A strong balance sheet might be the be seen as consistent?
means to sustain workers through the crisis. A unique
logistics network could be used to bring aid to people Communicate not only your decisions but also
in need. A manufacturing facility could shift production the rationale for them—and the trade-offs you
to creating urgently needed medical supplies. Resist considered—clearly. Can you explain decisions
going it alone. Collaborate closely with your ecosystem to skeptics? Will what you decided be a source of
of suppliers and customers—they might identify pride? In the financial-services industry, many bank
strengths you didn’t even know you had. executives report credit loss as their most acute
concern, followed by liquidity and funding. But
Small businesses and large corporations alike banks also have a long-standing social commitment
are redeploying their capabilities to respond to to support households and businesses with credit.
this crisis: a wedding-dress boutique in New York Banks that pull funds away during a crisis will be
responded to postponed orders by shifting to defining themselves for future interactions in the
produce protective masks for healthcare workers, communities where they operate.
while French perfume makers have retooled to
pump out hand sanitizer. Automobile and car-parts Finally, if you have embraced initiatives in ESG
makers have turned to building ventilators. Past areas, don’t borrow from one to support another—
lessons can inform creative thinking: when rural don’t risk appearing to “rob Peter to pay Paul.” The
Tanzania needed critical medical supplies in 2010, temptation may be to scale back environmental
Coca-Cola used its extensive last-mile delivery programs to support acute social needs better
system to reduce delivery times to five days, from in this crisis. But beware of seeming to abandon
30. Stepping into the public sphere in the heat of deeply held stakeholder causes; supporters will
a crisis can unleash unique synergies and creative have long memories.
solutions that will linger.
of bringing a new generation of leaders to the fore. shutting down its offices and providing supplies and
It may be tempting to withdraw into small, tight company cars to affected staff. The company
decision-making task forces to make key decisions also supported its larger community, providing
as quickly as possible. But purposeful leaders will $10 million in grants to help policyholders rebuild.
want to share execution plans broadly with staff to
solicit input and engage them on the challenges the
organization faces—including the difficult trade-offs Lead from the front
to be made. Leading in a crisis is never easy, but hard times
leave the most indelible imprints on a company’s
Many employees and their families are suffering identity. Credibility is a both essential and fragile
from isolation and loss of income, leaving them element of effective leadership. In a recent
thinking about what is truly important. Crisis leaders’ McKinsey survey of US workers, 82 percent of
actions now can foster collective unity and a sense the more than 1,000 respondents affirmed the
of belonging. When those decisions derive from the importance of corporate purpose, but only
principles and purpose that an organization stands 42 percent reported that their company’s stated
for it will make it easier to convey confidence in purpose had much effect. This is a cautionary
positive outcomes, even when decisions are tale about the generic nature of most companies’
painful ones. statements on identity but also the identification
of an opportunity to surprise and sway skeptical
There is also a benefit in drawing employees stakeholders. Authentic actions will demonstrate
together to tackle problems in new ways. For to employees a company’s genuine commitment to
example, forming cross-cutting teams to address social purpose.
problems can break the mold of years of siloed
thinking. As Hurricane Katrina took its toll on the Communicate early and frequently, even with
United States in 2005, Walmart stepped up to incomplete information. Remember that, right
support disaster relief and asked some employees now, suffering stakeholders seek empathy but
to deliver supplies in hard-to-reach areas. At are also looking to leaders to face facts bluntly,
the same time, the company guaranteed that all without sugarcoating them. Stay nimble as
employees in disaster locations would keep their situations change, which they certainly will. Adapt
jobs at other locations during and after the disaster. to changing conditions and new information
When Hurricane Harvey landed in Houston in rather than returning to a static playbook. Offer
2017, Texas Mutual Insurance took immediate perspectives on today’s crisis details, with a
steps to ensure the safety of its employees by microscopic perspective to reassure stakeholders
Bill Schaninger is a senior partner in McKinsey’s Philadelphia office, and Bruce Simpson is a senior partner in the Toronto
office, where Han Zhang and Chris Zhu are both consultants.
The authors wish to thank Arne Gast, Sufanah Hamza, Pablo Illanes, Abi Kulshreshtha, Sebastian Leape, Robin Nuttall, Richard
Steele, Matt Stone, and Lynn Taliento for their contributions to this article.
24
A leader’s guide:
Communicating with
teams, stakeholders,
and communities during
COVID-19
32
Decision-making in
uncertain times
38
Applying past leadership
lessons to the coronavirus
pandemic
44
Positive leadership in
uncertain times
47
Re-energizing through
the epidemic: Stories
from China
17
© Jonathan Knowles/Getty Images
Leadership in a crisis:
Responding to the
coronavirus outbreak and
future challenges
For many executives, the coronavirus pandemic is a crisis unlike any other in
recent times. Five leadership practices can help you respond effectively.
Exhibit
During a crisis, a network of teams carries out responses outside of normal
operations, as well as adjustments to routine business activities.
Illustrative network of teams
for a pandemic response
Executive
team
Action
teams
Response-
leadership
C G
External
team Technology
communications
A B E
Medical Network project Supply
chain
D
advisory
H
management
Financial Real
estate
Response-
team lead F
Colleague
outreach
5
Tantum Collins, Chris Fussell, Gen. Stanley McChrystal, and David Silverman, Team of Teams: New Rules of Engagement for a Complex World,
first edition, New York, NY: Portfolio/Penguin, 2015.
6
Helio Fred Garcia, “Effective leadership response to crisis,” Strategy & Leadership, 2006, Volume 34, Number 1, pp. 4–10.
7
Amy C. Edmondson, “Don’t hide bad news in times of crisis”, Harvard Business Review, March 6, 2020, hbr.org.
Gemma D’Auria is a senior partner in McKinsey’s Dubai office, and Aaron De Smet is a senior partner in the Houston office.
The authors wish to thank Ruth Imose, Ana Mendy, Monica Murarka, Mihir Mysore, and Ophelia Usher for their contributions to
this article.
A leader’s guide:
Communicating with teams,
stakeholders, and communities
during COVID-19
COVID-19’s speed and scale breed uncertainty and emotional disruption.
How organizations communicate about it can create clarity, build resilience, and
catalyze positive change.
1
Herman B. Leonard, “Against desperate peril: High performance in emergency preparation and response,” in Communicable Crises:
Prevention, Response, and Recovery in the Global Arena, Deborah E. Gibbons, ed., Charlotte, NC: Information Age Publishing, 2007.
A leader’s guide: Communicating with teams, stakeholders, and communities during COVID-19 25
Every crisis has a life cycle, and
emotional states and needs vary with
the cycle’s stages.
Give people what they need, when COVID-19 struck early, offers some helpful
they need it insights. One survey in China, for example,
Every crisis has a life cycle, and emotional states showed that a marked decline in people’s energy
and needs vary with the cycle’s stages. In a recent during the early stages of the epidemic reversed
article, our colleagues framed the COVID-19 crisis in as they acclimated to increased anxiety and the
five stages: resolve, resilience, return, reimagination, blurring of work- and home-life boundaries.2
and reform. These stages span the crisis of today Savvy communications directors responded by
to the next normal that will emerge after COVID-19 evolving their messaging from health basics to
has been controlled. The duration of each stage business recovery.
may vary based on geographic and industry context,
and organizations may find themselves operating in — Finally, as the crisis’s end comes into view, ramp
more than one stage simultaneously (exhibit). up internalizing information to help people make
sense of the crisis and its impact. For the current
With such variation in mind, communicators should public-health crisis, it’s still too early to glean
be thoughtful about what matters most in the the shape of this broader perspective, although
given moment. “silver lining” articles about families drawing
closer together and other topics have been
— In a crisis’s early stages, communicators must making their way into the media.
provide instructing information to encourage
calm; how to stay safe is fundamental. In The COVID-19 outbreak is a complex crisis made
COVID-19, governments and major media up of multiple trigger points—health, policy,
outlets first focused on clear, simple instructions the economy—and leaders should tailor their
about physical distancing and “lockdown” communications to the stage of the crisis their
guidelines. Companies focused on new opera- stakeholders are experiencing, and to what people
tional rules regarding time off, overtime, and need most in the moment (see sidebar, “Want to
operational changes. know what people need? Ask them”).3 Scenario
planning becomes important to help anticipate
— As people begin to follow safety instructions, where employees and communities may be
communication can shift to a focus on adjusting in dealing with the crisis, and the appropriate
to change and uncertainty. Asia, where messaging that can help them as the crisis unfolds.
2
McKinsey surveyed senior executives of large Chinese companies, along with employees from those organizations, in eight industries, from
March 12–18, 2020; 1,300 people responded to the survey.
3
Adapted from David L Sturges’s seminal 1994 work on crisis communication, “Communicating through crisis: A strategy for organizational
survival,” Management Communication Quarterly, February 1, 1994, Volume 7, Issue 3, pp. 297–316.
Exhibit
Internalizing
Mix of
information to
communicate,
by type, %
Adjusting
Return/
Reimagination/ Instructing
Resolve Resilience Reform
Crisis stage
What they need Facts, not speculation Clarity on longer- A new vision for the
Clear instructions for term plans future
how to protect their Positive stories A chance to grieve
safety Chances to connect
4
A body of research shows that people generally suffer from information overload; for more, see Martin J. Eppler and Jeanne Mengis, “The
concept of information overload: A review of literature from organization science, accounting, marketing, MIS, and related disciplines,”
Information Society, 2004, Volume 20, Number 5.
5
Edelman trust barometer 2020 special report: Trust and the coronavirus, Daniel J. Edelman Holdings, 2020, edelman.com.
A leader’s guide: Communicating with teams, stakeholders, and communities during COVID-19 27
Want to know what people need? Ask them.
Standard tools and serendipitous of choosing paths forward. Offer options. can create smaller groups for more
conversations and moments of Community dialogue can shape the in-depth conversation.
connection can help leaders check in right decision.
on their people: Solicit questions. When preparing town
Use digital and analytics tools. Two-way halls, give employees a chance to submit
Schedule unstructured time. Add 15 to 30 listening solutions enable employees to questions in advance (anonymously is ideal).
minutes at the beginning or end of a meet- share concerns over email or text. Natural- Or offer the community the option to “vote
ing to tap into what’s on employees’ minds. language software then produces major up” the questions they most want answered.
themes for managers to review, act on, Use chat functionality to allow questions.
Run a quick pulse survey. Ask one simple and monitor.
question: How are you feeling? Include a Engage change agents. If you’ve identified
comments box for elaborating. Host “well-being check-ins.” Schedule influencers or change agents, deploy them.
time for people to come together. These Provide forums for them to hear from peers.
Invite input on big decisions. When sessions can host up to 150 people at a Adjust your communications to reflect this
possible, include people in the process time. Breakout features in some apps new input.
To convey crucial information to employees, keep myths).7 In previous epidemic outbreaks, such as
messages simple, to the point, and actionable. Zika, yellow fever, and West Nile virus, research
Walmart published its 6-20-100 guidance: stand six shows that interventions highlighting best practices
feet away to maintain a safe physical distance, take were more effective than those focused on
20 seconds for good hand washing, consider a body countering misinformation or conspiracies.
temperature of 100 degrees Fahrenheit the signal
to stay home from public activity. Slack CEO Stewart Repeat, repeat, repeat. Communicators regularly
Butterfield focused on personal care in reassuring underestimate how frequently messages must be
employees stressed over work. “We got this,” he repeated and reinforced. In a health crisis, repetition
said. “Take care of yourselves, take care of your becomes even more critical: one study showed that
families, be a good partner.”6 an audience needs to hear a health-risk-related
message nine to 21 times to maximize its perception
When communicating clear, simple messages, of that risk. 8 Fortunately, employee appetite for
framing and frequency matter: regular, trusted information from employers during
COVID-19 is high. In one study, some 63 percent
Dos, not don’ts. People tend to pay more attention asked for daily updates and 20 percent wanted
to positively framed information; negative communications several times a day.9 So, establish
information can erode trust. Frame instructions a steady cadence, repeat the same messages
as “dos” (best practices and benefits) rather than frequently, and try mantras, rhyming, and alliteration
“don’ts” (what people shouldn’t do, or debunking to improve message “stickiness.”
6
C atherine Clifford, “CEO of multibillion-dollar company Slack to employees amid coronavirus: ‘Don’t stress about work,’” CNBC,
March 26, 2020, cnbc.com.
7
Building on Daniel Kahneman and Amos Tversky’s seminal 1979 prospect theory, more recent research has examined the impact of
highlighting gains and benefits when communicating health information.
8
Lu Liu, Xi Lu, and Xiaofei Xie, “Inverted U-shaped model: How frequent repetition affects perceived risk,” Judgment and Decision Making,
2015, Volume 10, Number 3.
9
Edelman trust barometer 2020 special report: Trust and the coronavirus, Daniel J. Edelman Holdings, 2020, edelman.com.
Focus on facts—without sugar coating. Involve your audience in decision making. When
Differentiate clearly between what is known and making operational decisions, involve stakeholders.
unknown, and don’t minimize or speculate. In crises For example, many universities have informed
like the one we’re facing now, “the facts” may students that commencement this year will not
include bad news about the state of the organization take place as planned. Rather than canceling
or changes that will be painful for people. Research commencement outright, several universities
shows that some leaders, used to feeling highly have instead used short, simple communication to
effective and in control, avoid acknowledging elicit students’ ideas for staging commencement
uncertainty and bad news because they find it differently, preserving some of commencement’s
stressful or guilt inducing, or they fear negative positive energy.
reactions from an audience.10 But unfounded
optimism can backfire. In 1990, during the United Demonstrate vulnerability. Judiciously share
Kingdom’s mad-cow-disease crisis, a government your own feelings and acknowledge the personal
minister fed his daughter a hamburger in front of TV effects of emotional turmoil. Research shows that
cameras and declared that British beef had never demonstrating vulnerability, such as grief over
been safer, despite evidence to the contrary. Rather shared losses or authentic feelings about the impact
of changes on employees, can help build trust.
10
Research shows that leaders are often uncomfortable giving bad news; for more, see Robert J. Bies, “The delivery of bad news in
organizations: A framework for analysis, Journal of Management, 2013, Volume 39, Number 1, pp. 136–62.
11
David Robson, “Covid-19: What makes a good leader during a crisis?,” BBC, March 27, 2020, bbc.com.
A leader’s guide: Communicating with teams, stakeholders, and communities during COVID-19 29
Mind what you model. What you do matters as employees. Especially important is expressing
much as what you say in building trust, and scrutiny gratitude to those in the organization who are
of leaders’ actions is magnified during a crisis. leading frontline responses or who face threats
Recently, some leaders have been called out for to their safety. In addition to acknowledging them
setting “do as I say, not as I do” examples. Scotland’s publicly, having one-on-one conversations with
chief medical officer resigned after public uproar them or sending personal thank-you notes can
when she was caught visiting her second home go a long way toward making people feel part of
during lockdown. Hosting a videoconference from something important and meaningful, which in turn
the office might seem like a good way to project helps build resilience.
normalcy—but won’t for those attending who are
locked down at home. Help people to help. Helping others is a great way
to improve well-being and reduce stress.13 Amid
crisis, people look for ways to contribute. For
Build resilience example, following the 9/11 attacks, Dell connected
As the COVID-19 health crisis turns into a lingering with employees by channeling their desire to offer
financial and economic crisis, uncertainty and help. Service and response teams worked around
doubt will challenge efforts to restore business the clock, drawing on Dell’s customer purchase
confidence. Leaders will face a critical period in records, to offer customers immediate assistance
which they will need to instill resilience in people and in replacing lost computers and equipment. Such
tap sources of hope, trust, and optimism in order to steps helped employees struggling with grief and
unlock creativity and build momentum for the future. anger to focus on others, give back, and link the
Channeling positive sentiments and encouraging a customer’s experience to everyday work.
sense of broader community will be critical elements
in building that momentum.12 Build community. It’s important to rebuild a common
social identity and a sense of belonging based
Celebrate the positives. Sharing positive stories and on shared values, norms, and habits.14 Research
creating uplifting moments are important building suggests that social bonds grow stronger during
blocks in reigniting resilient spirits. It may seem times of great uncertainty. Leaders encourage
counterintuitive, but often this approach begins by people to come together under common values of
acknowledging loss. Denying or averting loss can mutual support and achievement. Queen Elizabeth II
make it more likely that people focus on negatives, has called upon all Britons to unify and identify—in
especially in times of crisis. However, it is possible to discipline, resolve, and fellowship—in the face of
counterbalance the negative effects of stress and COVID-19. “The pride in who we are is not a part of
loss by channeling positive emotions. our past, it defines our present and our future,”
she said.15
Highlight how your organization is responding to the
crisis with stories about how people are adapting Any effort to create a shared social identity must be
to new ways of working. Or recount how your grounded in a sense of support for others. Practical
organization is contributing to the global COVID-19 ways to encourage this when people are working
response. Show appreciation for the challenges remotely include book clubs, pub quizzes, happy
people face. For example, the “Clap for our carers” hours, exercise classes, chat groups, competitions,
movement in the United Kingdom is a public display and so on. Complement this kind of broad outreach
of appreciation for the National Health Service with one-to-one communication via phone, email, or
(NHS), which is now being replicated every night at video to individuals or small teams. Arrange a virtual
7 p.m. in New York City. Many companies have breakfast, an end-of-week celebration, or even
posted videos on social media thanking their video “tours” of each other’s workspaces.
12
For more on positive psychology in the workplace, see Fred Luthan and Carolyn M. Youssef, “Positive organizational behavior in the workplace:
The impact of hope, optimism, and resilience, Journal of Management, 2007, Volume 33, Number 5, pp. 774–800.
13
Adam Grant, Give and Take: Why Helping Others Drives Our Success, New York: Viking, 2013.
14
For more on leadership and shared identity, see S. Alexander Haslam, Michael J. Platow, and Stephen D. Reicher, “The New Psychology of
Leadership: Identity, Influence and Power,” Routledge, 2010.
15
“The Queen’s coronavirus speech transcript: ‘We will succeed and better days will come,’” Telegraph, April 5, 2020, telegraph.co.uk.
16
For more on sensemaking, including the importance of leadership, see Marlys Christianson and Sally Maitlis, “Sensemaking in organizations:
Taking stock and moving forward,” Academy of Management Annals, 2014, Volume 8, Issue 1, pp. 57–125.
17
Thomas A. Wright, “More than meets the eye: The role of employee well-being in organizational research,” Oxford Handbook of Positive
Psychology and Work, Oxford University Press, 2009, pp. 143–54, oxfordhandbooks.com.
18
“Best Buy committed to providing products people need,” Business Wire, March 21, 2020, businesswire.com.
19
Craig Smith, “COVID-19 Update from Dr. Smith,” Columbia University Irving Medical Center, March 27, 2020, columbiasurgery.org.
Ana Mendy is a partner in McKinsey’s Southern California office, Mary Lass Stewart is an expert in the Chicago office, and
Kate VanAkin is an expert in the London office.
The authors wish to thank Aaron De Smet, Wojciech Kurda, Carlos Miranda, Mihir Mysore, Joe Spratt, Mrinalini Reddy, and
Andrew Samo for their contributions to this article.
A leader’s guide: Communicating with teams, stakeholders, and communities during COVID-19 31
© TwilightEye/Getty Images
Decision making in
uncertain times
The timeline for companies to react to the coronavirus has shrunk dramatically.
Here are five principles that leaders can follow to make smart decisions quickly
during the pandemic.
1
Vincent P. Ferrera, Jack Grinband, and Tobias Teichert, “Humans optimize decision-making by delaying decision onset,” PLOS ONE,
March 5, 2014, Volume 9, Number 3, journals.plos.org.
2
For more information on the US Air Force’s observe, orient, decide, and act (OODA) loop, see Mark Bonchek and Chris Fussell, “Decision
making, Top Gun style,” Harvard Business Review, September 12, 2013, hbr.org.
Andrea Alexander is an associate partner in McKinsey’s Houston office, where Aaron De Smet is a senior partner; Leigh
Weiss is a senior expert in the Boston office.
The authors wish to thank Chris Gagnon, David Mendelsohn, and Vanessa Monasterio for their contributions to this article.
To decentralize and create a network of teams Corporate couldn’t have made that call. They
requires absolute clarity on intent and priority. A would probably have brought everybody home.
leader cannot empower a team if there is any But let’s be careful with words: autonomy doesn’t
uncertainty in direction or priority. And even while mean in isolation. We said clearly, whether you stay
McKinsey: That kind of collaboration takes work. At Wendy’s during the SARS crisis, we made
What kinds of teams can do it? decisions informed by people on the front lines. The
way we were structured helped us. Our organization
Hugo Bague: A team with defined roles and was structured in a way that allowed for the efficient
responsibilities can do it, but decision making communication of information from the stores up
must be even more clear and concise in a crisis the chain to the C-suite. We had store managers
than in other situations. There also needs to be who were all connected to district managers who
accountability, so that even when there are different were connected to division managers who in
people and different departments giving input, at turn were connected to the head of operations.
the end of the day, there is a single decision maker. We had a good communication network and
That needs to be clear. And the whole leadership we received great input. In the C-suite in larger
team should maintain discipline in speaking as corporations, we tend to focus on strategy, big ideas,
one around a decision. There can’t be any internal in the abstract. But in these situations, we needed
criticism or questions around decisions, because in tactical decisions, and needed them quickly. We
a crisis the organization is fragile. needed to address the issues in a way that makes
sense in the environment of the store.
Jeff Cava: If there is a thin veneer of cooperation
and collaboration, it will be immediately exposed. Manley Hopkinson: A coherent culture creates
If, on the other hand, there are genuine, honest the environment that allows teams to work
relationships among senior leaders, you’re going independently and with each other. A common
to have a much better functioning crisis team. If understanding and common language of the tools of
there are weaknesses, if there are cracks in the leadership and collaboration are vital. For example,
team functioning, it will fray quickly in times of when the whole organization uses a consistent
stress. It sounds obvious, but many leaders don’t tool for delegation, then delegation is consistently
understand that when people are under extreme effective. It comes back to clarity again.
McKinsey: Leaders want to come across as recovering. People depend upon our statements
grounded and reassuring. But there’s a fine line as leaders and often plan important decisions
between reassuring and saying something that’s based on the information we give them. To make a
overly optimistic. How does that play out in real-life commitment of that importance and then not follow
communications? through destroys the trust that we strive to create
with our associates.
Manley Hopkinson: I love the expression
“deliberate calm,” recognizing the work of It comes down to the old adage: honesty is the best
Albert Mehrabian on the emotional context of policy. Ask yourself, “Is my statement absolutely
communication. As he quantified it, communication true? If I’m required to do something to make it true,
is 55 percent visual, 38 percent tone, and only can I do it?” We couldn’t promise uninterrupted
7 percent what you say. It takes a great deal of employment, because we didn’t know what was
consciousness from leaders in the midst of crisis going to happen in the economy. This was an
and upheaval to maintain a balance that is neither unprecedented economic disaster. The desire was
too negative nor overly optimistic. They need to give people relief and confidence. But you can’t
to recognize that they are always on stage but give them false relief and false confidence. That’s
accept that they, too, are still human and can make hard for a compassionate leadership team, but you
mistakes. In a time of crisis, we need leaders to raise have to push yourself.
their levels of consciousness and be acutely aware
of how they are being perceived. Hugo Bague: In times of crisis and uncertainty,
you need leadership to show stability. There are
Jeff Cava: At different times, we’ve had to make many things you don’t know, but you can still
pretty sizable reductions in force. During the bring stability by structure. We had daily calls and
2008 financial crisis, we reduced our nonproperty daily communications at a fixed time with all the
head count at Starwood by a substantial amount. employees through mobile phone—and we did
After we did the first round, everyone wanted to that daily for 18 months. Bringing structure into the
say, “That’s it, no more, you can all go back to your lives of people, you take things under your control.
jobs—everything is great.” I, along with others, That helps with the mental health and stability of
strongly urged against that, and we didn’t make that employees, which one should not underestimate in
commitment. Because we didn’t know what was a time of crisis. People have questions around their
going to happen. And indeed the economic situation families, their jobs, and many topics, so any stability
did worsen before we finally stabilized and began you can provide is quite important.
Hugo Bague is a senior adviser in McKinsey’s Zurich office, Jeff Cava is a senior adviser in the Boston office, and Manley
Hopkinson is a senior adviser in the London office.
This article represents edited comments from phone and video interviews moderated by Gila Tolub, a partner in McKinsey’s
Tel Aviv office.
Positive leadership in
uncertain times
Most leaders are struggling to find the right path through the COVID-19
crisis. Acting on three imperatives can help pave the way.
This essay first appeared in the Milken Institute’s Power of Ideas collection focused on building and rebuilding lives in the face
of the COVID-19 pandemic. The essay series features insights from thought leaders across industries. Read their contributions
and share your thoughts using #PowerofIdeas. Find more coverage on the Milken Institute LinkedIn page.
Exhibit 1
Personal energy changes before and during the crisis
Personal energy changes before and during the crisis
Average energy value Top 5 reasons for weaker energy
Total # of respondents = 1,300
Anxiety deepened as
28%
the epidemic unfolded
Telecommuting unsuitable
for work flow 25%
Source: Survey on Centered Leadership and Agile Work during the Coronavirus Epidemic in China, conducted March 12 - 18, 2020
"Early stage" refers to the period from late January to late February; "Late stage" refers to the period following late February
Exhibit 2
Effective approaches to personal energy management
Effective approaches to energy management
Total # of respondents = 1,300
Approaches to energy management
Shift perspectives, accept and convert negative emotions while actively
53%
seeking new breakthroughs or reinventing ways of work
Manage physical and mental energy through reading, exercising, and resting 48%
Set time for interactions with family members, deepen relations with
28%
them and differentiate the time for family from that for working
Create new opportunities for professional development based on own advantages 26%
Ensure smooth communication with customers and listen to their demands 24%
Make and follow a regular work plan, and switch your role by changing what you wear 18%
Others 2%
Source: Survey on Centered Leadership and Agile Work during the Coronavirus Epidemic in China, conducted March 12 -18, 2020
When this happens, take 10-12 minutes to exercise, For example, the CEO of a leading pharmaceutical
listen to music, or watch an entertaining or relaxing company said that when the Hubei province capital
video. Doing this periodically can help declutter of Wuhan was locked down, she organized a cross-
your mind and allow you to concentrate for longer divisional emergency team to fight the epidemic.
stretches of time. The team helped fast-track approval of a drug that
improves immune systems, and mobilized supply
chain resources to ensure patients in Wuhan could
2. Find meaning receive essential drugs. They also cooperated with
Aside from replenishing your physical, mental, and digital companies to build free, online virtual clinics,
emotional energies, it’s also helpful to tap into the enabling remote diagnosis and treatment. “The
meaning you derive from your work. McKinsey outbreak highlighted our value to the public, making
research identifies five sources of meaning in work: me proud to be part of the healthcare industry,” she
societal, organizational/corporate, client/target, said, adding that the sense of meaning inspired by the
team, and personal. Usually, company leaders battle against the epidemic also made her team more
focus on society and the organization, while their passionate, and brought them closer together.
employees identify more closely with the latter
three elements. Pursue meaningful work
The CEO found a sense of meaning and spiritual
However, our research suggests the COVID-19 energy from epidemic-fighting and charity work.
pandemic is galvanizing entire organizations as their If you want to identify the meaning of your work,
work becomes essential to keeping society and the try posing this question: “Where does my sense
economy afloat. The sense of purpose and drive many of meaning/value come from?” Look back on your
are finding as a result of the outbreak, whether it be career and recall the moments that you are most
working on the frontlines of the healthcare response, proud of, or that made you feel most accomplished
or around the clock to keep companies in business or content. Try recalling the details: What did you
and staff employed, instills the motivation to rise to do? What did others say to you? How did you
crisis-related challenges. feel? Deep dive into the key factors that make you
proud or fulfilled: Is it being recognized, deploying opportunity to lift company morale and motivation.
your capabilities and strengths, building sincere In the late- and post-epidemic stages, it is worth
relationships, or contributing to the welfare and considering how to position your organization so that
development of others? it continues to contribute to society and community,
in the process offering a source of spiritual energy for
Once the source of meaning is identified, consider you and your team.
whether you have devoted enough time and energy
into work that delivers this sense of meaning. If not, Our survey indicates that a majority of China-based
formulate a plan to adjust your way of working to employees are aware of or have participated in
make sure you feel fulfilled. corporate social responsibility activities related
to the COVID-19 outbreak, including giving donations
Create meaning or providing volunteer services. Senior executives
This example illustrates a larger truth: that employees tend to engage most deeply in such activities
can derive a sense of meaning in their work once (Exhibit 3). The challenge is to disseminate the sense
they realize the contribution their company makes to of meaning and value derived from that participation
society. The epidemic consequently represents an as deeply as possible through the company.
Corporate Social Responsibility (CSR) initiatives during the COVID-19 outbreak in China
Most respondents said their companies engaged in CSR actions related to the outbreak; senior
executives engaged most deeply
Participated in individual
39% philanthropic activities
31% 31% 29% Limited participation in philanthropic
activities organized by the company
Deep participation in philanthropic
activities organized by the company
Stories from the frontlines: Coordinating also anxious about the prospects for the
an epidemic response from home company and our department.” Meanwhile,
as he prepared to lead a video conference
At 5 p.m. on Monday, February 17, the head call on epidemic response and management
of the passenger vehicle department of with his team, the remote working model
a large auto group was under pressure to imposed as a result of China’s nationwide
keep his staff safe, and arrest a significant lockdown posed challenges of a different
slide in performance related to the COVID- nature. “My son, who is in first grade, would
19 outbreak. “We had six colleagues in interrupt me; my wife was also occupied
Hubei whose work was severely impacted, with remote work; and my parents, who
and we were very concerned about their had come to Shanghai for the Lunar New
health and safety, as well as that of their Year, were unhappy that I had locked myself
families,” the department head said. “I had in the study, and did not have time to do
a call with the company president the night house work or communicate with them. ...or
before the meeting, but we failed to pin communicate with them.
down a recovery strategy. Colleagues were
With the widespread imposition of remote working they have become closer to their families than
policies, 53 percent said they had spent more time before the outbreak. They said the experience
with their families than they usually would, with deepened mutual understanding of working roles and
the tendency most pronounced among senior difficulties, while providing more scope to care for
management (73 percent). Twenty percent said they and play with loved ones. The threat to health posed
had spent less time with family. by the outbreak also reinforced the importance
of family (Exhibit 4).
The impact on family relationships was primarily
positive, with 35 percent of respondents suggesting
Exhibit 4
Changes
Changes in family
in family relations
relationships during
during the the
COVID-19 crisis
crisis
Source: Survey on Centered Leadership and Agile Work amid the Coronavirus Epidemic in China, conducted March 12 - 18, 2020
Haimeng Zhang is a senior partner in McKinsey’s Hong Kong office; Tianwen Yu is an expert associate
partner in the organization practice; Bernie Yang is an OrgSolution senior coach in McKinsey’s Shanghai
office, where Lihong Pan is an organization expert.
The authors also wish to thank Glenn Leibowitz, Bo Peng, John Qu, Vera Tang, Arthur Wang, Pin Wang,
Fangning Zhang, and Gaobo Zhou.
66
Getting ahead of the
next stage of the
oronavirus crisis
77
To weather a crisis, build a
network of teams
57
© ThomasVogel/Getty Images
Responding to coronavirus:
The minimum viable nerve
center
Amid the coronavirus pandemic, companies need a crisis response coordinated
by top management that gives experts and managers the autonomy to implement
creative, pragmatic solutions.
Exhibit
Project Epidemiological
Head of coordinator
Incentive expert Procurement Head of
sales and
managers manager procurement
marketing
Customer Supply-
Customer Agile structure to manage Supply-chain
communications chain
engagement crisis discovery, decision stabilization
analyst
making, solution design,
and execution
Cross-functional teams Regional
Financial SKU supply-chain Logistics
coordinated by nerve-
analyst manager managers manager
center integration team
Teams manage workforce,
supply chain, customers,
and financials
Ombudsperson
Workforce Financials
protection stress testing
Employee Financial
Security communications Legal
analyst
HR Strategy
full-time or business-
leader development
manager
Nerve-center organization
Some known COVID-19 risks, such as those
The teams need to be staffed quickly, with
posed to traveling employees, could be readily
individual roles, responsibilities, and
addressed with policies (such as travel restrictions).
accountabilities made clear. Flexibility will be an
Unforeseen threats that could arise as the crisis
important principle, since roles will change over
continues can be anticipated in “premortem”
time, sometimes quite rapidly. Also important
workshops. Nerve-center teams therein work
is that nerve-center leaders be authorized to
out possible responses—ones to take if, for
make timely decisions, sometimes without the
example, a sudden gap should open in the supply
opportunity to syndicate with other leaders.
chain because of policies imposed beyond the
company’s control.
Operating cadence
Meetings should be limited to those in which vital
Once companies establish a good understanding of
deliberations are conducted and actions decided
the critical issues across all work streams, they will
on. They should, however, be frequent enough to
find it helpful to run financial calculations (balance
foster collaboration. Ensure that meetings address
sheet, cash flow, and profit and loss) on issues and
essential topics and elicit the best thinking for the
responses. This will project scenarios for particular
relevant work streams. The responsible members
issues, allowing companies to form views on issue
for each work stream should have the opportunity to
likelihood, timing, and magnitude.
seek input from the coordinating leaders. Solutions
should be tested and decisions made to commit to
Response plan
effective methods and set aside ineffective ones.
Leaders can find it extremely difficult to craft
Select meeting attendees with care: Meetings
sensible goals during a crisis. Many trade-offs
of only senior leaders tend to encourage purely
usually have to be made between ideal outcomes
Mihir Mysore is a partner in McKinsey’s Houston office; Ophelia Usher is an expert in the New York office.
The authors wish to thank Kevin Carmody for his contributions to this article.
by Martin Hirt, Sven Smit, Chris Bradley, Robert Uhlaner, Mihir Mysore, Yuval Atsmon, and Nicholas Northcote
The plan-ahead team will help elevate your view While staff from a regular strategy group may form
above the day-to-day response that your crisis part of a plan-ahead team, the team’s responsibilities
team is managing. Its objective is to enable modular, are far from the strategy function’s usual purview.
scalable thinking that any CEO needs to navigate Planning ahead today requires a dedicated effort,
this unprecedented and rapidly evolving situation. with a full-time senior executive leading and
The plan-ahead team will deliver a STRATEGIC accountable for a team of ring-fenced high-potential
CRISIS-ACTION PLAN to guide and accelerate your employees located “next door” to the CEO.
decision making.
As a first task, the team needs to develop a
day-one version of a strategic crisis-action plan
Launch a plan-ahead team by working through the five frames outlined in
Military organizations, which specialize in dealing the next section of this article. Speed is of the
with large-scale crises, often establish granular essence, and waiting for perfect answers can
structures accountable for highly specific tasks, be counterproductive: you need to deal with
such as operations, communication, and intelligence uncertainty, not let it bottleneck your decision
gathering. However, they all use plan-ahead teams making. Your plan-ahead team will need to update
Exhibit 1
WG WG WG WG PG PG
Supply Client
chain support
WG WG WG WG PG PG
WG
Working group (WG) for issue Modular, scalable planning group (PG) for issue
and improve plans continually by integrating new your response through the next stages of the crisis
intelligence as it becomes available. as events unfold (Exhibit 2).
Exhibit 2
Trigger points
This week 2–4 weeks 1–2 quarters 1–2 years Next normal
Availability of machines Analyze tier ≥3 suppliers Analyze 13-week cash 50% of geographic Significantly lower
to reveal flow for liquidity market regions number of new-project
Government-bailout
critical-supplier challenges across facing demand opportunities because
deadline
exposure/extended scenarios drawdowns after of market-segment
shutdowns because of Q4 2019 shift
crisis
We can’t stress the idea enough: speed is of the premium, keep investing in a physical network, and
essence. Your plan-ahead team must move fast, invest faster than the competition. Sort those into
give you the day-one answer tomorrow, and iterate the three buckets too. You have now clarified the
at high velocity. If new issues or opportunities come starting picture and brought the critical issues to
up, add modules for your plan-ahead team; don’t the foreground.
slow down. The next few weeks and months will
shape the future of your company—and possibly, 2. Develop scenarios for multiple versions of
your industry. your future
The traditional approach to strategic planning too
1. Gain a realistic view of your starting position often either adopts a head-in-the-sand position
In times of extreme uncertainty, you should start (assuming away uncertainty) or suffers from “deer
by developing a clear baseline of your company’s in the headlights” syndrome (being paralyzed by
last-known position. Think of it as doing a “system unpredictability).1 Now more than ever, you can’t
restore” back to January. You don’t have time for a get rid of uncertainty; you have to confront it. A
cleansheet exercise; your existing strategy can be good way of doing this is to build scenarios, and
an anchor to use in systematically assessing what McKinsey’s global COVID-19 scenarios are a useful
has changed. starting point (Exhibit 3).2
Your plan-ahead team should take stock in three We took the two biggest uncertainties associated
main areas: your financial assumptions, your with the crisis—the virus spread (and the
ongoing initiatives, and your big strategic choices. associated health response) and the economic
Referring to a three-year plan and cataloging the knock-on effects (along with the public-policy
planning assumptions made in that document response)—and combined them into potential
will help determine what drives the financial macroeconomic outcomes.
performance of the company. Those factors
should be sorted into three buckets: those that still The aim isn’t to debate which scenarios are more
seem about right, those that are wrong, and those likely but rather to explore what is possible—and
about which you are unsure. If possible, do a quick to ready yourself for anything that looks plausible.
sensitivity analysis to assess which assumptions Chopping off “the tails” to eliminate the most
matter most. extreme eventualities is where scenario analyses
often fail, resulting in mere variants of a base
The next task is to list the big ongoing initiatives, case. While some scenarios may seem too awful
starting with major projects on the capital- to contemplate, that doesn’t mean they should be
expenditure list, and organize them into the same disregarded. Your plan-ahead team should develop
bucket categories. The final step is to list the big at least four scenarios. If you only have three, it is
strategic choices that underpin your company’s all too tempting to default to a middle option as the
business model—for example, sustain a price base case.3
1
Hugh Courtney, Jane Kirkland, and Patrick Viguerie, “Strategy under uncertainty,” Harvard Business Review, November–December 1997, pp.
66–81, hbr.org.
2
Kevin Buehler, Ezra Greenberg, Arvind Govindarajan, Martin Hirt, Susan Lund, and Sven Smit, “Safeguarding our lives and our livelihoods: The
imperative of our time,” March 2020, McKinsey.com.
3
For more on scenario building, see Charles Roxburgh, “The use and abuse of scenarios,” November 2009, McKinsey.com.
Exhibit 3
Scenarios for the economic impact of the COVID-19 crisis are useful as
starting points.
GDP impact of COVID-19 spread, public-health response, and economic policies
Next, your plan-ahead team should stress-test your Developing scenarios brings immediate benefits.
company’s performance and strategy against each It allows you to bound uncertainty into manageable
scenario by translating them into modeled business and measurable boxes, reducing confusion, and
outcomes. Identify where your business is most to sort out what is truly unknown and what really
at risk and where it is most resilient; estimate your matters. You can identify, with confidence, the
capital “headroom” (or shortfall) in the worst-case no-regret moves with which you should promptly
scenario. Then assess your current slate of strategic proceed while creating a clear structure to use
initiatives against each scenario, determining when working through options to handle a range
whether each initiative should continue as planned, of possible outcomes. Finally, it enables you to
accelerate, or stop. identify the signals that will be early markers that a
scenario is coming to pass.
It is extremely important that a plan-ahead team companies may need to enter a long and difficult
considers multiple scenarios as input and converts period of slow rebuilding, others will find near-
them to tangible ideas for action. However, it is term opportunities in big, strategic moves and
also important that the team has a set of planning innovations. The point isn’t to develop detailed
assumptions provided as an input to delivery plans but rather to figure out your broad direction
teams. If the plan-ahead team believes that the of travel—the big thematic idea around which
company needs to operate under an assumption you can form a strategic response. In a world full
of an 8 percent drop in GDP, then the team that is of uncertainty, you have to stand for a goal that
constructing the financial portfolio can’t make an will matter above all else. This big idea will bring
assumption that is different than that. coherence and determination to your evolving
tactical response.
One approach we have found useful is to start by
developing a clear view on how the primary threat or In a disruption of the magnitude of the COVID-19
opportunity that you face (for example, macrolevel pandemic, a point of view on what has changed
and industry trends, operations, and regulation) permanently is essential. It helps you avoid a
could evolve. Then think through how the evolution hedging approach to the future in which you spread
of that threat or opportunity could affect your your resources like peanut butter across a range of
business performance. Running this loop a few opportunities without really taking a clear stance.
times helps you acquire a nuanced view of how the Many successful companies have confronted
environment is likely to change. these moments when they have had to commit to a
vision of the future. In the 1980s, for example, Bill
A plan-ahead team is in the best position to define Gates didn’t know which operating system would
the inputs that are necessary for an organization’s emerge as dominant, but he did know that, in all
scenario-development and decision-making scenarios, personal computing would be the next
processes because it is the team responsible for big thing and computers would run on graphical user
gathering pertinent, high-quality information for interfaces. He also knew that it was likely that the
the organization. The reason is simple: gathering winners would take all. This led Microsoft to adopt
high-quality information about the environment a clear posture of trying to win the race for the PC
is a costly exercise that usually requires a lot of operating system.
nuance and judgment. It is far more involved than a
simple exercise of analyzing positive and negative Coming out of developing your scenarios, you will
sentiments on Twitter. have thought through how the dual shocks to your
demand and your business model might play out.
3. Establish your posture and broad direction You might see a few possible versions of the next
of travel normal. While you are staying open to multiple
One of the key responsibilities of a plan-ahead team possibilities, it might help to consider in which
is to determine the best response to an evolving direction you need to establish your broad direction
situation based on the company’s circumstances of travel (Exhibit 4).
after the immediate crisis passes. While some
Exhibit 4
More
Extent of
business-
model Sustain your Restructure
disruption business and your company
restore and/or
operations industry
Hardly
anyone
With the COVID-19 crisis, hardly anyone will technologies that enable remote learning, working,
be in the bottom corner of the map shown in services, and consumption. Will that adoption
Exhibit 4, as the challenge is so ubiquitous. Some recede postcrisis, or will we move to a new status
businesses will have a dominant imperative to quo? As a result, should you now accelerate your
sustain, as they will return in similar form but investments in a digital business model? Do you
at different recovery speeds (for example, with need to scale back your capital-investment plans
essential subscription services, such as core focused on increasing your physical footprint and
consumer telephony and electricity retailing). instead secure bandwidth to host your virtualized
Others will primarily orient to restructure to business? Given the level of uncertainty, you can’t
match a much leaner demand environment (for put all your eggs in one basket or bet on hope. The
example, the cases of airlines and cruise ships). critical output of this frame is to establish conviction
Other companies will have less severe demand on future themes before defining any initiatives.
shocks but will face radically different customer
behaviors. They will have to shift their business 4. Determine actions and strategic moves that
models. Yet other companies and industries will are robust across scenarios
find themselves in a completely different territory In a world of extreme uncertainty, a rigid,
on both the axes shown in Exhibit 4, and they will deterministic plan won’t be right for very long. But
have to shape entirely new businesses. making everything flexible can be an expensive path
to nowhere. Rather, you need to think about building
One notable feature of the COVID-19 crisis is a a portfolio of strategic moves that will perform
radical shift to distance business models. In a matter relatively well as a collective across all likely scenarios,
of days, people massively stepped up their use of even if every move isn’t a winner on its own.
Exhibit 5
2
Set trigger points that drive your Develop scenarios
organization to act at right time 5 for multiple versions
of your future
5 frames of
strategic
crisis-action plan
Martin Hirt is a senior partner in McKinsey’s Taipei office, Sven Smit is a senior partner in the Amsterdam office, Chris
Bradley is a senior partner in the Sydney office, Robert Uhlaner is a senior partner in the San Francisco office, Mihir Mysore is
a partner in the Houston office, Yuval Atsmon is a senior partner in the London office, and Nicholas Northcote is a director of
strategy and corporate finance in the Brussels office.
To weather a crisis,
build a network of teams
This dynamic and collaborative team structure can tackle an organization’s most
pressing problems quickly. Here are four steps to make it happen.
In response to the coronavirus, organizations of all The evolution begins when the senior executive
shapes and sizes are moving in this direction. They team—or a kitchen cabinet of the leader’s trusted
are setting up “control towers,” “nerve centers”— advisers —creates a central hub that directs and
which take over some of the company’s critical coordinates the response while a handful of related
operations—and other crisis-response teams to deal teams operate as the spokes. These teams bubble
with rapidly shifting priorities and challenges. They up the challenges so the central team can prioritize
see that these teams make faster, better decisions, them. In the context of the COVID-19 crisis, initial
and many are wondering how they can replicate this teams might focus on workforce protection, supply-
effort in other parts of their organization. chain risks, customer engagement, and financial
stress testing.
Creating a central “rapid response” group is the right
first move, but leaders shouldn’t stop there. In this The model makes it easy to add a team later when
article, we will focus on the steps leaders should you identify a need, or to disband a team when it’s
take to create a cohesive and adaptable network of no longer necessary or has accomplished its goal.
Exhibit 1
The evolution to a network of teams often begins with a central team launching
a few primary response teams very quickly.
Central team with
response teams
It is important to launch two groups in particular: an Work with the team leaders to staff their groups,
intelligence team, which makes sure the network keeping in mind what skills, experiences, and
has a high level of situational awareness, and perspectives are most important. Each team must
a planning-ahead team, which thinks through represent a cross-section of critical perspectives.
scenarios for the recovery and beyond. Each team In addition to whatever technical or functional
should be small and contain a mix of individuals with expertise people are bringing, you are looking for
cross-functional skills, acting with a clear mandate problem solvers who will come up with innovative
but also within guard rails that empower it to act. approaches and who can learn fast on the fly.
The leader should make it clear to all members of Just like with team leaders, you need individuals who
the organization, including those in the parts of the have critical judgment, the courage to make bold
business that are operating as usual, that these decisions, and the ability to consider trade-offs and
empowered teams get to make the calls within trust the data. These team members also need to
the authority delegated to them and do not need recognize when specific expertise is needed and
permission from others. (Although, teams will seek pull those experts in as appropriate.
guidance from the central hub team even when
they are empowered to act without approval.) Crucially, each team must also include and consider
voices from people on the “edges”—the front line of
Next, pick the team leaders. These individuals often an organization where the battles to respond to the
are not the “usual suspects” typically put in charge crisis are taking place. While they may not be senior
of key initiatives. They need to be a good fit for the within the hierarchy, these people are closest to the
task at hand: creative problem solvers with critical customer or constituent and are likely to bring key
thinking skills who are resilient and battle tested. information to the team.
They should also be independent and open to a
range of different perspectives. Best of all, they Finally, any given team should be small enough
should be willing to say what needs to be said, and that it can split two pizzas (according to the widely
to make tough, even unpopular, decisions—ideally adopted Jeff Bezos/Amazon rule).1 Any larger, and
with a track record of having done so in the past. nothing meaningful will get done on the timelines
required in a crisis.
1
Courtney Connley, “Jeff Bezos’ ‘two pizza rule’ can help you hold more productive meetings,” CNBC, April 30, 2018, CNBC.com.
To do this, there should be steady coordination The goal here is to empower teams and support
with the central team hub, perhaps in daily stand- them at the same time, without micromanaging. This
up meetings. The central hub can check in on is what great coaches do: they listen to many voices
progress being made and find ways to support and then make tough calls, even when they have
teams and make sure they are using first-order insufficient or imperfect information.
problem-solving principles.
Particularly early on, leaders and their close
At this point, it’s time for the leader to step into the advisers will need to focus on how budgets and
roles of catalyst and coach. As catalysts, leaders people have been distributed across the network
should identify opportunities, make connections of teams, ensure that the highest priority efforts
across2020
GES teams, spark ideas for the teams to consider, have what they need, stand down or slim teams that
To weather a crisis, build a network of teams no longer as relevant, and form new teams as
and provide resources to fuel those efforts. As are
coaches, 2
Exhibit of 4 should regularly engage with team circumstances shift.
leaders
leaders and members, resolving roadblocks and
helping them work through challenges.
Exhibit 2
Exhibit 3
The hub and some of the spoke teams morph and add more teams as the
network experiments and learns.
Central team with Hub and spoke Hub and spoke with
response teams with subteams additional subteams
You’re doing everything you did in step two, but In the fourth panel, the network begins to work
now your teams aren’t afraid to say something isn’t together to mobilize at the edges, where the crisis
working. Part of the radical transparency in this is being fought most intensively. As problems are
phase is that teams can say, “Our plan isn’t good solved, some teams may go away.
enough, we need to launch another team or several
more teams.” As the number of people and teams increases in
the network—in both the third and fourth panels—
Creating psychological safety from the top down fewer people are connecting with each other all
becomes even more important during times of crisis, the time, but when they do, it is more meaningful.
when people are concerned about their own and They know who to go to for what task. At the
others’ welfare. Members within and across teams same time, too many connections per person can
must trust each other enough to share information also lead to overload (too many emails, meetings,
with the collective and to continue experimenting communications, and touchpoints). But with the
after making mistakes. Otherwise, the new network right network structure you can achieve a “small
may fail to deliver results. world network,” which may be large with many
teams, but it feels much smaller because of the
Psychological safety underpins successful degree of separation between people.
networks of teams by enabling the rapid sharing
of information to address changing goals, and In a well-functioning network, the central hub
fostering an environment in which individuals and does not begin to mimic the bureaucratic hierarchy
teams can rapidly test ideas, iterate, and learn that the network of teams is supplanting. The central
from mistakes. hub stays connected to all the activities, but it
avoids becoming a bottleneck that slows down
4. Turbocharge self-organization the response.
We’ve discussed many of the technical points to
setting up a network of teams—who should be Liberia’s 2014–15 response to the Ebola crisis is a
involved, what their mix of skills should be, how they good example of removing a bottleneck to get to a
should interact, what resources they need, how the desired outcome more quickly. The nation’s initial
leaders should act. And at this point, once the initial Ebola task force was hampered by slow decision
network of teams is established and after support making and hierarchy, so it set up an “Incident
from leadership early in the journey, the network Management System” network that empowered
should become self-sustaining and self-managing. teams working on case management, epidemiology,
2
Tolbert G. Nyenswah et al., “Ebola and its control in Liberia, 2014–2015,” Emerging Infectious Diseases, Volume 22, Number 2, February 2016,
pp. 169–77, cdc.gov.
Andrea Alexander is an associate partner in McKinsey’s Houston office, where Aaron De Smet is a senior partner; Sarah
Kleinman is a partner in the Washington, DC, office; and Marino Mugayar-Baldocchi is a research and knowledge fellow in
the New York office.
The authors wish to thank Christopher Handscomb, Ana Mendy, Mihir Mysore, and Jane Qu for their contributions to this article.
94
When governments
go remote
98
Adapting workplace
learning in the time of
coronavirus
104
A blueprint for remote
working: Lessons from
China
84
85
© AleksandarNakic/Getty Images
Exhibit 1
The experience of remote working can lead to inefficiency and reduced cohesion.
Experience of remote work, % of respondents
Source: Harvard Business Review; Workplace Trends; Zoltán Lippényi and Tanja van der Lippe, “Co-workers working from home and
individual and team performance,” New Technology, Work and Employment, March 2020, Volume 35, Issue 1, pp. 60–79
Exhibit 2
Sprint Agree on goals and Decentralization is a barrier for Break longer meetings into two—
planning scope of commitment dynamic communication one to discuss stories and the other
Split up the work agree on refined stories
Encourage prep work ahead of
time, and agree on what can be
done offline
Backlog Update and refine Difficult to drive complex problem- Ensure access and familiarity with
refinement backlog solving with content-heavy whiteboarding or collaboration
Define plan to mitigate whiteboarding tools and document information
impediments Difficult to align a large group in real time so team members can
follow along
Host smaller sessions with
functionally aligned groups and then
share progress with the larger group
Sprint Reflect on team Video might affect the perception of Use anonymous digital tools and
retrospective interaction safe environment for retrospective make sure team members know
Identify opportunities conversations about it
to improve working Let team members pick video or
style audio interaction mode
But approaches to keep team members engaged They also need to be purposeful at engaging
aren’t unique to agile teams, even if the imperative external customers and stakeholders. They must be
may be more acutely felt. At one US financial transparent and reassuring in their communication
institution, for example, a scrum master realized that about team performance and objectives. The
staring at a video screen for more than a couple of tools and approaches can vary (Exhibit 3). But the
hours was draining without the dynamic interaction individuals and interactions should be the main
of an in-person workshop. Her solution? For longer consideration. Leaders need to show, in their tone
meetings, she began to schedule in a ten- to and approach, that everyone is in this together.
15-minute exercise break every 90 minutes—with
a shared videoconference tool to recommend At one insurance company, for example, the product
different exercises. owner does five-minute individual check-ins with
her team members throughout the week, asking if
Adapting leadership approach there’s anything she can assist with or any problems
GES 2020
The core mission of leadership stays the same, she can help trouble shoot. She’s also scheduled
Revisiting agile teams after an abrupt shift to remote
whether co-located or remote. But leaders need to sessions with customers and stakeholders every
Exhibit 3 of 3
Exhibit 3
Various approaches can help teams engage customers and external stakeholders.
Tools Virtual sessions to continue to Emails and broadcast messaging Rethinking customer and external
engage and solicit feedback from Social media stakeholder engagement model
individual customers, focus Live portals for updated health, Simplified surveys and polls, that
groups, suppliers, partners, and operations, and engagement help provide deeper insights
other stakeholders guidelines 1–1 calls with customers and
Proactive sprint demos partners
Offering specialized perks and
services
Santiago Comella-Dorda is a partner in McKinsey’s Boston office, Lavkesh Garg is an associate partner in the Silicon Valley
office, and Suman Thareja and Belkis Vasquez-McCall are partners in the New Jersey office.
The authors wish to thank Geet Chandratre, Alex Guo, Ashok Mohanty, Ahmad Zaidi, and the McKinsey Agile Tribe for their
contributions to this article.
When governments
go remote
As COVID-19 forces government organizations to embrace virtual work, leaders
must reimagine how they engage and collaborate with their colleagues.
For more on building effective teams, see Andrea Alexander, Aaron De Smet, Sarah Kleinman, and Marino Mugayar-Baldocchi, “To weather a
1
Exhibit 1
Small, cross-functional teams are essential to getting work done while reducing communication
needs to manageable levels.
Role 1 Role 2 Role 3
monitor progress, proactively offer assistance, for example, might require fast-track approval and
and participate in problem solving when it would a process for escalating them. In addition, cross-
be valuable. By managing the interdependencies department collaboration must be supported by
of each work stream, the most effective leaders clear guidelines for how team members reach
ensure that the right teams are connected and can out for help, to avoid multiple parties sending the
solve problems together. same request.
2. Shift to leading teams based on weekly 3. Implement best practices for effective
outputs and goals team performance
To accelerate progress and decision making, teams Many government organizations reinforce culture—
should adopt tools from agile ways of working. For values, rules, norms, and structure—through
example, more regular and frequent meetings, well- interactions at the office, with leaders setting
defined goals, and a digital team room or dashboard the tone. The shift to remote working requires
for tracking progress can ensure that the entire organizations to make a sustained investment in
team is aligned on next steps and timelines. A virtual culture in several ways. First, leaders must make
schedule should always be visible and accessible to culture a high priority and establish team norms that
all team members. For frequency, we suggest using provide the underpinnings of a healthy team culture.
recurring and planned touchpoints multiple times a Second, employees must address how they can still
day (Exhibit 2). These check-ins can be short—about feel like a team without interacting face-to-face at
15 minutes each—and include a morning kickoff, a the office. They might, for example, carve out time
midday meeting, and an end-of-the-day checkout. in recurring meetings for social interactions and
To complement this cadence, team members should encourage their colleagues to connect with each
reserve regular time slots that allow for virtual other outside of business tasks.
collaboration with one another.
The structure and processes that work so naturally
Leaders also need to establish processes for solving in an office need to be replaced with new guidelines
different types of problems. Top-priority issues, and expectations. To reach team agreement on its
Exhibit 2
Team
leader
Check-in with team Phone availability for To-do list review and setup
leader and members urgent updates and of priorities for next day
to plan the workday, frequent checkpoints
Team progress monitoring,
via conference call
Email management via update tracking tools
or video
for routine activities
Weekly status updates Daily team checkout,
with leadership for via conference call
overall alignment (eg, or video:
jour fixé)
Team • Task review
members
• Next-day prioritization
Start-of-day Virtual collaboration Individual work sessions
alignment with to carry out Dedicated feedback
Virtual get-togethers sessions
team leader work-group activities
and progress sharing,
and members by team members
via cloud computing and
shared team folders
working hours and meeting times and frequency, High-functioning governments are essential to
leaders might explicitly ask team members helping the private sector, and society as a whole,
about their obligations and preferred schedules. weather the current crisis. The agile practices
Teams must also agree on their collaboration and described here can help government organizations
communication tools and on how to receive and quickly adjust to remote working as well as set
provide feedback. From a process standpoint, each them up to accelerate their decision making and
team should appoint a meeting “owner” to help increase their collaboration now as well as over the
focus the team members’ interaction and lay out a longer term.
path for escalating issues when necessary.
Jonathan Dimson is a senior partner in McKinsey’s London office, where Elizabeth Foote, Jesper Ludolph, and
Christoforos Nikitas are associate partners.
Six best-practice actions, ranging from the Good decision making in this initial period requires
immediate and tactical to the strategic, can help appropriate information and data. We recommend
maintain the momentum and benefits of workplace- developing several minimum viable products: a
learning programs and help build a new foundation rolling six-week calendar of upcoming programs
for effective virtual learning. These actions are and milestones, an exposure heat map (for example,
establishing a learning-response team, protecting the number of affected participants by region or
employees in in-person programs, adapting delivery, program type), a prioritized list of programs for
promoting digital learning, exploring alternative redesigning, and a dashboard showing progress,
digital strategies, and practicing and preparing for key indicators, and decision triggers.
multiple outcomes.
1
This article reflects a contemporaneous perspective on how COVID-19 could and should impact workplace learning. It is based on McKinsey’s
experience in delivering learning programs to our global workforce, as in well as our work supporting clients through McKinsey Academy, which
is our entity for client-facing leadership development and functional capability building.
Exhibit
Creating engagement and community feel in virtual live sessions requires
planning and follow-up.
Tips for delivering an “in person” feel
Before the session During the session After the session
• Ensure you are comfortable with, • Leverage technology features to • Distribute any work products or
and have tested, the technology keep participants engaged follow-up information as needed
• Make participation easy by • Keep video on, look at the webcam, • Solicit participant feedback
providing local-access dial-ins, as and use gestures as in person on content, delivery, and
needed, in addition to any weblink • Use online tools such as polling technical experience
• Dedicate a moderator to manage and chat to gather input • Escalate any technical issues and
speakers and discussion • Consider features such as virtual identify workarounds or solutions
• Send materials in advance via file breakout rooms to encourage
sharing, and remind participants participation
prior to starting
Good learning sessions of all types begin with a good together and collaborate in virtual formats (such as
participant experience. Ensure that the technology videoconferencing and instant messaging). These
has been tested, local dial-in numbers are provided are good arguments for placing additional emphasis
as needed, roles are clear (consider assigning a on digital learning as the number of people working
moderator to manage speakers and participants), remotely because of COVID-19 increases.
and prereading materials are distributed well in
advance. During the session, use technology to It is too early to say how COVID-19 will ultimately
keep participants engaged and energized. For affect the accelerated adoption of digital learning.
instance, keep the video option on participants’ What is clearly different today is that keeping people
computers active to create a community feel, set safe and reducing risk has, for now, displaced
ground rules up front, and use online input tools to cost as the key driver behind digital learning. For
facilitate engagement, such as chat and polling. Also learning leaders, that opens an opportunity to
consider features such as virtual breakout rooms promote existing digitally enabled portfolios of
and postsession feedback to simulate the in-person learning offerings as a way to help colleagues during
experience as much as possible. challenging times. Targeted communication that
reminds employees that learning doesn’t stop when
travel is curtailed, for example, may boost attention
Promote and enhance digital learning to available digital offerings.
A substantial increase in the use of digital delivery
globally is under way across all segments of the The uptake in virtual delivery also provides learning
workforce, from frontline managers to senior leaders with an opportunity to enhance the digital
leaders. In regions such as Asia, where travel experience of employee learners. One way is
restrictions and work-from-home policies for leaders to tie communication to the learners’
have been in place for weeks, digitally enabled individual motivations, such as a sense of personal,
experiences have also created new benefits. community, or company purpose. Another is to
These include an increased sense of community, have senior leaders model desired behaviors
purpose, and focus for people who are no longer through active participation in digital courses.
connecting with their colleagues in a co-located When possible, include social-learning components.
workplace. Around the world, organizations are These can include discussion boards, along with
using digital learning to increase collaboration participant journeys that focus on cohorts of
among teams that are working either remotely or people undertaking programs together on a set
across different time zones, as they take courses schedule rather than on individuals working at their
Alok Kshirsagar is a senior partner in McKinsey’s Mumbai office; Tarek Mansour is a senior partner in the Dubai office; and
Liz McNally is a partner in the New York office, where Marc Metakis is an associate partner.
1
https://www.ft.com/content/1d54d08a-6555-11ea-b3f3-fe4680ea68b5
2
https://www.who.int/health-topics/coronavirus
3
https://www.bbc.com/worklife/article/20200309-coronavirus-covid-19-advice-chinas-work-at-home-experiment
4
t tps://m.chinanews.com/wap/detail/zw/business/2020/02-03/9077412.shtml
Leaders need to energize the whole company by The lesson: Determining how you communicate
setting a clear direction and communicating5 it is just as important as what’s being said, and it
effectively. Offering a strong vision and a realistic needs to be done confidently, consistently,
outlook can have a powerful effect on motivation and reliably8.
across the organization. It’s essential to foster
an outcome-driven culture that empowers and
holds teams accountable for getting things done, 3. Instilling a caring culture
while encouraging open, honest and productive As companies transition to the new normal, it’s
communication. important to acknowledge that some employees
may be facing other pressures at home, including
Empowering your team in this way pays dividends. caring for their children when schools are shut,
WeSure, part of leading internet company Tencent, leading to feelings of isolation and insecurity.
assembled a COVID-19 response team6 at the Business leaders need to respect and address
start of the year to offer insurance coverage, free these additional needs.
of charge, to front-line medical workers. Alan Lau,
CEO of WeSure, credited his team, saying they Empathy is a crucial tool here, offering a way to
had worked non-stop, many from remote locations connect, promote inclusiveness, and create a
while on leave during the Chinese New Year break, sense of community in a void of physical interaction.
demonstrating how responsive they were to Increasing social interactions within the team,
the vision. particularly through one-on-one catchups, guards
against feelings of isolation and demoralization and
For managers, the challenge is to lead, inspire creates space for people to speak up and share
and direct their team in their daily course of work, their thoughts. By creating a sense of psychological
while being physically remote. Upping the levels of safety for their colleagues, being inclusive in
interaction can also work well here. decision making, and offering perspective in
challenging moments, managers can stay closer
One chief information officer, responding to a to what is going on, surface issues, and help their
McKinsey survey 7, said he’s texting the entire teams solve problems effectively.
company with regular updates because it’s a more
human way of communicating than via the official A similar approach is important when dealing with
corporate channels. customers and clients, providing valuable stability
and enabling them to navigate unknown waters with
When working within distributed teams, confidence. For example, one global bank asked
e-commerce giant Alibaba increases the frequency their relationship managers to connect with small
of its one-to-one communications with employees business customers via WeChat and video-calls to
to a weekly basis and, in some teams, members understand their situation and help them weather
submit a weekly report for their colleagues, the crisis. To do so effectively at scale, the managers
5
https://www.mckinsey.com/business-functions/organization/our-insights/leadership-in-a-crisis-responding-to-the-coronavirus-outbreak-
and-future-challenges
6
https://www.prnewswire.com/news-releases/wesure-launches-novel-coronavirus-pneumonia-insurance-covering-15-million-people-
against-outbreak-of-covid-19-301005341.html
7
https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/the-cios-moment-leadership-through-the-first-wave-of-the-
coronavirus-crisis
8
https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/the-cios-moment-leadership-through-the-first-wave-of-the-
coronavirus-crisis
Many tools can be integrated with each other through single sign-on and content sync
Choosing the right tools for the company requires close collaboration between Business, IT & Security
Rolling them out effectively is a change management effort – from training to adapting ways of working
https://hbr.org/2014/01/to-raise-productivity-let-more-employees-work-from-home
9
Raphael Bick is a partner in McKinsey & Company’s Shanghai office, where Tianwen Yu is an associate partner.
Michael Chang is an associate partner in McKinsey’s Beijing office. Kevin Wei Wang is a senior partner in McKinsey’s
Hong Kong office.
The authors wish to thank Lihong Pan and Glenn Leibowitz for their contributions to this article. They’d also like to thank
Enoch Chan, Natalie Chu, Karel Eloot, Jeff Galvin, Xu Lei, Nick Leung, Liesje Meijknecht, Kate Smaje, Hugo Sarrazin, Anand
Swaminathan, Sha Sha, Gregor Theisen, Rodney Zemmel, and Haimeng Zhang for their insights.
120
Coronavirus: How should US
higher education plan for an
uncertain future?
126
Getting the next phase of
remote learning right in
higher education
131
School system priorities in
the age of coronavirus
113
© Thelinke/Getty Images
by Pablo Illanes, Jonathan Law, Ana Mendy, Saurabh Sanghvi, and Jimmy Sarakatsannis
Coronavirus and the campus: How can US higher education organize to respond? 115
Do not wait until all the facts are in—
they may never be—to act. In a crisis,
good now is better than perfect later.
— Design a portfolio of actions, immediate assigned to bring critical items to closure (for
and strategic, that minimizes false optimism, instance, incident management and the acquisition
maximizes speed, and installs a pragmatic of personal protective equipment).
operating model. Be ready to change timelines
and budgets as circumstances change. In times of crisis, leaders may be tempted to
centralize decision making and to keep tight
— Deliver solutions in a disciplined, efficient way. control of information. They should think twice.
Remember that small failures can lead to bigger Leadership from the top is essential, but not nearly
ones, so stay flexible. enough: one or two or even half a dozen leaders
cannot know enough, fast enough, to make all
The overall goal is for the institution to be capable of the necessary decisions in these circumstances.
getting ahead of events, and to react skillfully and Conversely, a proliferation of subteams with joint
strategically. ownership will not lead to fast-enough results.
Universities, which are often known for seeking
Nerve centers are organized around work teams that consensus and sharing decision making, might
have specific areas of responsibility. An integration find this especially difficult. Nerve centers are a
team, headed by a senior leader, coordinates the way to widen and hasten decision making, while
actions of the rest to ensure that the work teams setting appropriate boundaries and enforcing
do not trip over each other and that they get the accountability. They set priorities and give others
resources they need. The integration team should be the authority to act—indeed, to do so on incomplete
kept small, including members who bring strengths information. Constant communication is critical, with
in project management, decision making, scenario daily meetings ensuring consistency across the
planning, communications, and campus culture. The workstreams.
trust of senior leadership is essential. Given the
pandemic, a COVID-19 nerve center should also Tactically, operationalizing a nerve center means
ensure it is informed by the latest epidemiological assigning a senior sponsor and leader to each
expertise. Because no two universities are alike, workstream, and then launching a regular cadence
neither will any two nerve centers be. All of them, of interaction between the nerve center and the
however, will need to have work teams that address workstreams. Select meeting attendees with care;
health and safety, student experience, teaching if meetings are kept to only the senior sponsors and
and research, faculty and staff, campus operations, the nerve center, they often result in purely upward
finance and legal, and communications (exhibit). reporting rather than constructive debate and
Nerve centers may also create temporary teams real problem solving. If meetings involve too many
Exhibit
5 3
l Benchmark actions against peers
l Launch and continue
Finance and legal communications Faculty and staff
l Financial stress-testing l Health and safety
l Multiyear scenario planning l Workforce policies
l FEMA¹ accounting and reporting l Work-from-home guidelines
4
l Cash management l Workplace norms
l Endowment l Internal communications
l Advancement
Campus operations
l Incident management
Technology (including work-
l
1
Federal Emergency Management Agency.
frontline managers within the workstreams, they key decisions that need to be made that day, outputs
may become overly tactical. The right mix is often for the day, and other priorities for the week. These
the senior sponsor and leader of each stream, along daily touchpoints can be run virtually, with a project
with the nerve-center head and integration team. manager capturing each of the priorities and using
the exact same document and agenda every day
While the exact cadence will vary by university, we to foment tight coordination, communication, and
recommend holding daily huddles at a regular, set collaboration. At the end of each day, the nerve-
time (typically first thing in the morning) to focus on center leader should prepare a concise briefing
Coronavirus and the campus: How can US higher education organize to respond? 117
to communicate the highlights of the day and to to understand the concerns of their students and
escalate key decisions that have not yet been other stakeholders—and then respond effectively.
resolved to the president and senior-leadership team. Both academic and nonacademic concerns are
important; for example, plans for commencement
and for supporting graduating seniors as they enter
Principles to guide decision making an uncertain employment market. Part of this effort
for a university nerve center needs to be directed at supporting the mental
Much of the discussion so far applies widely—to health of students and faculty who are now spread
private-sector organizations, governments, and out, and possibly dealing with loss, shock, isolation,
higher-education institutions alike. But because and difficult family situations. Engagement doesn’t
universities have unique characteristics, four stop with current students. Alumni will be critical
additional guiding principles should inform how they to bouncing back from the financial stress of the
use the nerve center and make decisions. outbreak. If there is a recession, alumni donations
might falter, but an “early and often” approach to
Bring an equity lens to every decision. Many of alumni communication might pay dividends down
the actions universities take to slow the spread the road—both financial and nonfinancial.
of the virus and safeguard health will likely have
a disproportionate effect on already vulnerable Think beyond your walls. No university is alone
populations. For example, lower-income students in coping with COVID-19. Peer institutions are
may not have the devices or internet speed at home grappling with the same issues at the same time.
to get set up for online coursework. They are also This represents a unique opportunity to learn
more likely to depend on campus employment for from each other in real time, and to collaborate.
living expenses. For students who were struggling One example might be to create educational
academically, the transition to online learning could partnerships, such as small colleges banding
be incredibly disruptive and threaten completion. together to provide online learning, or piggy-
Some international students may not be able to backing off a larger institution’s capabilities. There
get home, and if they do, may not have access to may also be a way to create strategic partnerships—
the internet; others may not be able to stay in the joining together to advocate certain policies or to
country given visa and work-authorization rules. coordinate communications or workforce initiatives.
Some students may have no home to go to. This is a time for universities to embrace the idea of
being peers in a common educational mission—not
In terms of the staff, many of those who provide the just as competitors for students and staff and for
operational backbone of the campus—everyone athletic glory. Finally, it is important to remember
from faculty to janitors and food-service workers— the role of the university in the broader community.
may lack a financial cushion if they are laid off or As campuses go quiet, universities are sitting on
go unpaid during campus closure. Local vendors physical assets that could prove critical in helping
may depend on university business. Universities local governments and healthcare workers respond.
have their own financial concerns, but to the extent
possible, they must nevertheless incorporate a Act with urgency, but with perspective. The
sense of equity—favoring the more vulnerable over immediate focus will of course be safety and
the more affluent—into how they make decisions. operations, and with good reason. But it is important
not to stop there. While the immediate issues can
Stay in close touch with students, faculty, and easily consume senior-leadership bandwidth,
alumni. As COVID-19 spread, universities had to equally important to the success of the response will
act quickly, focusing largely on health and safety. be longer-term planning for recovery.
As the consequences linger on, universities need
Pablo Illanes and Jimmy Sarakatsannis are partners in McKinsey’s Washington, DC, office; Ana Mendy is a partner in the
Southern California office; Jonathan Law is a partner in the New York office; and Saurabh Sanghvi is an associate partner in
the Silicon Valley office.
Coronavirus and the campus: How can US higher education organize to respond? 119
© Timur Alexandrov/EyeEm/Getty Images
In this article, we consider three broad epidemio- Implications for teaching and learning
logical and public-health scenarios (Exhibit 1). All of In the virus-contained scenario, we envision that
these represent a degree of economic disruption few most students will complete the current semester
adults in the United States have ever experienced. online, and the class of 2020 will graduate virtually—
that is, without a formal on-campus ceremony.
In the first scenario (virus contained), COVID-19 Beginning in the summer, rules on travel and events
is contained in the next two to three months. In will loosen to some extent, although study-abroad
the second, more pessimistic scenario (virus programs might not resume just yet. Although
recurrence), physical distancing and other additional health safeguards will be necessary,
restrictive measures last in some regions for students will be able to return to class for the fall
several more months. In the final, most extreme semester. However, restrictions will remain for some
scenario
GES 2020 (pandemic escalation), the public-health international students, and many members of the
response
Coronavirus fails toHow
controlshould
the spread
USofhigher
the viruseducation
for incoming
plan class willuncertain
for an have had disruption
futurein the last
an extended
Exhibit 1 ofperiod
2 of time, likely until vaccines are months of their high-school educations.
widely available.
Exhibit 1
Depending on the scenario, normal operations may not resume for US higher-
education institutions until summer 2021.
Effective response but Broad failure of public-
Rapid and effective (regional) virus resurgence: health interventions:
control: virus contained virus recurrence pandemic escalation
Online learning predominates through Online learning occurs through fall 2020; Online learning occurs through 2020;
spring and summer 2020; face-to-face face-to-face instruction resumes by face-to-face instruction resumes as late
instruction resumes in fall 2020 January 2021 as fall 2021
Programs are disrupted through summer, Programs start 2020–21 school year Programs operate online only for at least
hurting major auxiliary revenue streams; online, resulting in major decline in first full semester of 2020–21 school
2020–21 school year operates almost auxiliary revenues; programs with strong year; there is continued switching to
normally, but new health controls stay in brands and online capabilities stand to schools with strong online capabilities;
place; there is some disruption to gain enrollment amid spike in attrition there is significant disruption to
international-student enrollment and switching international-student enrollment
Coronavirus: How should US higher education plan for an uncertain future? 121
Even this relatively optimistic outlook is likely to As for the student experience, hunkering down at
pose significant challenges to higher education. home with a laptop and a phone is a world away from
The sudden shift to online learning is already the rich on-campus life that existed in February.
stretching existing infrastructure; faculty with little
or no experience in teaching in this environment In the virus-recurrence and pandemic-escalation
may struggle. Courses with a high level of hands- scenarios, higher-education institutions could see
on components—such as clinical practicums, labs, much less predictable yield rates (the percentage
and performing arts—will be particularly disrupted, of those admitted who attend) if would-be
and students in these fields may have to delay first-year students decide to take a gap year
graduation to fulfill requirements. Exams will have or attend somewhere closer to home (and less
to be held online, making it impossible to administer costly) because of the expectation of longer-term
closed-book tests. financial challenges for their families. International
enrollment could be severely hit because of ongoing
In the other two, more pessimistic scenarios, most travel restrictions and fear. Both trends would
schools will be exclusively online through 2020 and depress enrollment.
into 2021. Travel will be greatly limited, and large
events will not take place. Study-abroad programs On the other hand, higher-education enrollment
will be canceled through 2021. The incoming class has traditionally increased during recessions.
of first-year students will start college without an For example, during the global financial crisis
on-campus orientation. Faculty will have to make of 2008–09, US undergraduate and graduate
longer-term changes to their curricula and teaching enrollment grew by about 5 percent and 10 percent
approaches. A notable share of the class of 2021 will a year, respectively, until 2011, netting a trough-
not graduate that year. to-peak addition of almost three million students.1
There could also be a rebalancing of students
Implications for student enrollment, equity, between schools. Specifically, schools that are
and experience more affordable and those that have a strong, well-
In the virus-contained scenario, the main impact developed online-learning infrastructure could
will be on persistence, as students and faculty will see enrollment rise. Almost half of US colleges
struggle to adapt to online coursework. Institutions and universities had no formal online-education
with limited records of creating a compelling online programs in 20182; they may find it more difficult to
experience could be hurt if their current students attract and keep students.
are dissatisfied with their digital offerings and
decide to go elsewhere. Students might also delay Implications for faculty and staff
returning until campus life is back to something In any scenario, faculty will be under intense pressure
close to normal. to develop and deliver online courses. Beyond that,
cancellation of kindergarten through 12th grade
In terms of equity, lower-income students will could affect faculty members with children and
suffer disproportionately. They are less likely to compromise the availability of staff services. Mental-
have the resources, such as PCs and high-speed- health resources could see greater demand. And
internet access, to enable them to succeed in an with campuses shut down, it would not be easy to
online-learning environment. They will also face the know what to do about staff whose services are
most immediate financial challenges, with many not needed as much but who are members of the
industries laying off employees and on-campus community and rely upon that income.
employment mostly ended.
1
Enrollment on a full-time-equivalent basis in 2008 compared with 2011, from the National Center for Education Statistics (NCES) Integrated
Postsecondary Education Data System (IPEDS).
2
A s of fall 2018 (the most recent data available from NCES IPEDS), more than 3,000 of the 6,352 institutions reporting to IPEDS had no students
in “exclusively distance learning” or “some but not all distance education courses.”
Coronavirus: How should US higher education plan for an uncertain future? 123
Part 2: What colleges and discover an accurate view of the situation—on
universities can do campus, in virtual classrooms, and in the broader
Higher-education institutions in the United States community—and derive implications from that
have already taken dramatic first steps to keep their view. Second, decide what to do quickly—but
people safe and to keep learning alive. Here are after stress-testing hypotheses and alternatives
some other actions they can consider in the weeks and ensuring adherence to university and local
and months ahead: community values. Third, design a portfolio of
actions—for both the short and long terms—
— Now: Set up a nerve center. An integrated nerve with a pragmatic operating model, to develop
center can help higher-education leaders plan detailed plans and act on them. Finally, deliver
GES 2020
and manage How
their response plans and responses in an efficient, flexible
Coronavirus shouldtoUS COVID-19
higherbyeducation plan for an uncertain future
establishing manner. Nerve centers must meet regularly—at
Exhibit 2 of 2work teams with specific areas of
responsibility. The work has four parts. First, least once (and better twice) a day—and enforce
Exhibit 2
77
10
66
60
15 57
24 11
100% 47 45 20
39 40
17 25 23
13 22 13 33
25 26
21 26 15
16 12 12 43
17 12
10
19 26 11 25
6 15 8 15
6 14 11
3 5 4 5 6
Public, Private, Public, For Public, Private, Public, For Public, Private, Public, For
4 years not for ≤2 years profit 4 years not for ≤2 years profit 4 years not for ≤2 years profit
profit, profit, profit,
4 years 4 years 4 years
The coronavirus could pose a particular in the United States, 25 did not serve any online through summer 2021. Moreover,
challenge to historically black colleges and students online as of 2018, and another 61 many HBCUs emphasize the value of the
universities (HBCUs), which play a critical had relatively few students in fully online on-campus experience; it may be difficult
role in the advancement of the African environments.1 These institutions might for them to foster this sense of connected-
American community and serve a signifi- find it difficult to shift to remote learning, ness in a digital setting.
cant number of low-income and first- especially in a pandemic escalation sce-
generation students. Of the 101 HBCUs nario in which students need to be served
1
As of fall 2018, the most recent data available from the National Center for Education Statistics Integrated Postsecondary Education Data System, 61 historically black
colleges and universities had 400 or fewer students in fully online programs.
accountability by tracking what is being done, yield actively, particularly regarding students
when, and by whom. at higher risk of not enrolling, such as
international and lower-income students.
— Near term (April to May): Focus on students, Universities should also consider whether and
financial resilience, and support of faculty and how to make significant changes to current
staff. Start with ensuring that students have all teaching models, making them more scalable,
necessary assistance, including mental-health more flexible, lower cost, and, importantly,
services, and that educational standards are more engaging. They also need to plan for
maintained. Faculty should receive the support appropriate remediation for the significant
required to continue their research and to learn disruptions to teaching and learning that all
how to teach effectively in an online environment. students will have experienced.
For nonessential staff, make quick decisions
about sick-pay and employment policies. Finally,
institutions must figure out where they are with
their finances. Given the continued uncertainty, Crises can create paralysis and fear. Rigorous
they should evaluate a range of scenarios, and scenario planning can help leaders map the
seek to understand their sensitivities to certain potential damage and devise ways to deal with it.
revenue streams. We will expand on specific Universities need to look beyond the immediate
actions to consider in future articles. crisis to create effective long-term strategies both
to get through the present and to safeguard their
— Medium term (June to September): Focus futures in the new normal that will follow.
on enrollment, persistence, and operations.
Institutions should plan for the next school
year. Establish a command center to manage
Frankki Bevins is a partner in McKinsey’s Denver office; Jake Bryant is an associate partner in the Washington, DC, office;
Charag Krishnan is associate partner in the New Jersey office; and Jonathan Law is a partner in the New York office.
Coronavirus: How should US higher education plan for an uncertain future? 125
© Vladimir Vladimirov/Getty Images
1
This article distinguishes between remote learning and online learning. “Remote learning” refers to the temporary move of in-person or hybrid
courses to an online teaching and learning format. “Online learning” refers to instruction designed specifically for use in an online format.
Getting the next phase of remote learning right in higher education 127
Institutions that cultivate a culture
of improvement will benefit both
their students and their faculty.
Support faculty. Most professors are working hard the school’s learning-management system.
to respond creatively to teach their students to Effective student surveys are short and ask
the same standards, even as their own lives are specific, pertinent questions, such as how well
disrupted. What methods work best in a remote professors explain the concepts or cultivate a
environment will differ by discipline and the sense of connection. These surveys should be
technology available. That said, there are a few used not to judge professors, but to give them
broad ways that institutions can help. information on how students are responding and
where they can improve. Survey results can also
Offer more teaching support. Many institutions give administrators a sense of where they might
have centers that offer support to faculty in their need to intervene to support student learning.
teaching; these should be scaled up as much as
possible and shift their orientation from “wait Invest in capabilities over the summer. As
until asked” toward outreach, engagement, and institutions consider whether they will extend
sitting in to observe remote courses. remote learning through the fall semester, they
can spend the summer months training faculty
Use social media and online forums so that and refining courses for an online format.
faculty can share best practices. Collaboration Universities could consider holding remote-
forums can get early momentum when learning “bootcamps” and hiring more online
“seeded” with ideas from influential professors. curriculum designers. In addition, universities
Highlighting and explaining successful remote- can use summer months to explore and test new
teaching practices during faculty meetings technologies to meet specialized needs, such as
can cultivate a sense of camaraderie, as well simulation software to mimic a lab experience
as a culture of sharing and improving. Faculty or accessibility options to better serve students
will inevitably start from different points in with disabilities.
their comfort and skill with remote teaching,
but institutions that cultivate a culture of Move the quad online, too. For many full-time
improvement will benefit both their students and students, the value of higher education comes
the faculty themselves. not only through academic coursework, but also
from the vibrancy of campus life, from late-night
Set up a structure so that faculty can get regular conversations, to interactions in the dining hall,
feedback on their remote teaching. There to serendipitous moments of engagement. As
are two sources to draw from—short student institutions move to remote learning, they can
surveys and engagement data derived from think about how to use existing tools to move
Getting the next phase of remote learning right in higher education 129
Build a resilient faculty and student body Often with limited experience and training, US
through education about phishing and malware higher education institutions have hustled to shift
attacks, particularly those that are trying to to remote learning and teaching. Many have done
take advantage of fears around COVID-19. so in an exemplary manner; others have not been as
Example: Kean University in New Jersey successful, at least so far. All of them, though, have
has created specific resources to inform its more to do to achieve the excellence and collegiality
community about cybersecurity resources that should define the university experience.
related to COVID-19.
This forced and abrupt move to remote learning has
Adapt how the university works, teaches, not been easy. However, it can provide institutions
and secures its learning capabilities by adding with an opportunity to experiment and innovate.
support capacity for the information-technology Piloting new approaches and building on practices
help desk, testing and clarifying incident- that are proved to work can help create positive
response protocols, and confirming the and enduring changes. Universities may find that
security of third-party tools used for learning they have a new remote-learning capability that
and teaching. can be integrated with on-campus instruction, to
everyone’s benefit, when this crisis has passed.
Christine Heitz is a consultant in McKinsey’s Denver office, Martha Laboissiere is an associate partner in the San Francisco
office, Saurabh Sanghvi is an associate partner in the Silicon Valley office, and Jimmy Sarakatsannis is a partner in the
Washington, DC, office.
The authors wish to thank Jake Bryant, Emma Dorn, and Jonathan Law for their contributions to this article.
School-system priorities in
the age of coronavirus
Now that the immediate rush of closing K–12 schools is over, school systems
must focus on four major priorities—and put equity front and center.
Exhibit 1
As of April 15, 191 governments had closed K–12 schools in response to the
coronavirus.
School closures
1.6 billion
children affected
Source: UNESCO
Exhibit 2
Scaling up remote learning can happen quickly, but requires constant
monitoring for improvement.
Scaling timeline
Align and enable Design and setup Pilot Monitor and adjust
Establish a clear vision Make key design choices Roll out remote learning Continuously improve in
and create conditions for around platform, content, in phases to teachers and response to feedback
success (1–2 days) and devices (2–3 days) students (2–3 days) (ongoing)
Set up agile team to Determine the platform Roll out the platform and Identify and monitor key
lead project management and devices required for process in waves to indicators to track
and stakeholder delivering content/ teachers, with rapid implementation (adoption,
communication instructional material training and expectation satisfaction, test scores)
Align with leadership on Agree on curriculum- setting Launch initiatives to
the vision for remote aligned content sources Roll out the platform, ensure equity among
learning, guardrails for to be leveraged by grade devices, internet vulnerable students
success, and necessary level connection, expectation, (eg, low-income, special
trade-offs training and content in education, immigrant)
Assess the current state waves to students and Make critical policy
of infrastructure (eg, parents/families decisions around
student access to assessment, grading
broadband and devices) and progression
and fill major gaps to
ensure equity among all
students
buses with Wi-Fi. In Portugal, the government is Library is working with a virtual tutoring network
pursuing a partnership with the post office to deliver to offer help in both English and Spanish. Parents
worksheets for students with no internet access. can also be part of the answer. The Los Altos
Where expanding access to devices and broadband School District in California has set up a parent-led
are not an option, then design and setup of remote tech-team within each school to provide technical
learning needs to be adapted to the technology that support to students and their families.
does exist—be that television, radio, cellphones, or
paper-packet delivery. Another vexing issue is what to do about
assessments and grading, given that end-of-term
Providing access to all is only a start. Some examinations have been largely cancelled. For
students need more support, for example because students struggling with the prerequisites of remote
of language barriers, working parents, or learning learning, including just finding a quiet place to study,
or physical disabilities. To narrow this equity gap, figuring out what constitutes a fair grading system
resources need to be disproportionately directed to will not be easy. Systems are experimenting with a
those with the greatest needs. Supporting parents variety of options.
is a critical piece of this puzzle. Many parents are
balancing their own remote work responsibilities The United Kingdom has announced that students
with helping children with schoolwork; others will get “calculated grades” based on their prior
have lost their jobs and are struggling to remain attainment and teacher assessment. The United
afloat. Schools can help by making things simple States has exempted states from federal testing
for parents: clear communications with what is requirements for the rest of this academic year; the
expected and required, and step-by-step guidelines states themselves can decide whether to cancel other
are most useful. Long lists of online resources, tools, assessments and address the needs of students who
and activities are helpful additions, but only in have not met graduation requirements—for example,
so far as they don’t cause overburdening or through a portfolio appeals process. In Australia,
unrealistic expectations. the state of New South Wales is proceeding with its
higher school certificate but is giving greater flexibility
To provide more direct student support, schools can to schools to decide how assessments are carried
start internally, planning academic interventions out. Whatever approach is taken, equity must be
in small groups for those with specific needs. part of the process and care should be taken not to
Eventually, partnerships with external providers and institutionalize existing biases. For example, a number
nonprofits may be required. In the United States, a of studies have shown that teacher assessments
nonprofit tutoring network, UPchieve, has expanded systematically underestimate scores for minority
access to offer free online math tutoring for low- students—and artificial-intelligence (AI) systems are
income high-school students; the New York Public only as good as the data entered into them.
1
Programme for International Student Assessment.
Ensure a strong operational and financial future. Crises can be a spur to creative problem solving.
School systems need to start planning for different Under the pressure of the COVID-19 crisis, school
epidemiological and economic scenarios, and systems can take the chance to rethink some of their
be ready to adapt if their budgets are cut. Hard traditional ways of doing things. As school systems
decisions are going to have to be made at every level. emerge from the pandemic, it will be important to
There are no easy answers. However, even if funding identify innovations that can be sustained into
falls, it will remain important to keep these equity the “next normal”; innovations that can improve
issues front of mind. student learning, but also contribute to a firmer
financial foundation.
There are some things that schools can start doing
now—for example, looking for savings in areas In the last few hectic weeks, school systems have
such as utilities and transportation, and asking worked hard to meet the immediate challenge
vendors for discounts. There is a limit to what of continuing to educate their students. Much
schools and school districts can do alone however. remains to be done, and different systems are at
Many will have to seek additional funds to help very different stages of the crisis—from resolve
their students recover, whether from governments, to resilience to beginning to return. Across all five
bilateral donors, or philanthropists. Creating post- steps, school systems should think in integrated
coronavirus budgets needs to be a joint process ways about how to support the neediest students.
between schools, which understand the needs By devising ways to narrow these equity gaps,
on the ground, and district, state, and federal school systems can play an important role in helping
governments, which may be able to provide access societies pull together, not apart.
Jake Bryant is an associate partner in McKinsey’s Washington, DC, office; Li-Kai Chen is a partner in the Kuala Lumpur office;
Emma Dorn is the global education practice manager in the Silicon Valley office, and Stephen Hall is an associate partner in
the Dubai office.
146
The CFO’s role in helping
companies navigate the
coronavirus crisis
152
When investors call: How
your business should talk
about coronavirus
156
The CIO’s moment:
Leadership through the first
wave of the coronavirus
crisis
162
Driving digital change
during a crisis: The chief
digital officer and COVID-19
168
How chief data officers
can navigate the COVID-19
response and beyond
174
Leading with purpose: How
marketing and sales leaders
can shape the next normal
138
139
© Klaus Vedfelt/Getty Images
1
Kevin Sneader and Shubham Singhal, “Beyond coronavirus: The path to the next normal,” March 2020, McKinsey.com.
2
See Kevin Buehler, Ezra Greenberg, Arvind Govindarajan, Martin Hirt, Susan Lund, and Sven Smit, “Safeguarding our lives and our livelihoods:
The imperative of our time,” March 2020, McKinsey.com.
3
See Mihir Mysore and Ophelia Usher, “Responding to coronavirus: The minimum viable nerve center,” March 2020, McKinsey.com.
4
See Yuval Atsmon, Chris Bradley, Martin Hirt, Mihir Mysore, Nicholas Northcote, Sven Smit, and Robert Uhlaner, “Getting ahead of the next
stage of the coronavirus crisis,” April 2020, McKinsey.com.
The changes to a board’s mode of opera- — Time commitment. The realization — Team dynamics. The heightened
tion ushered in by the COVID-19 pandem- that board directors need to spend collaboration and trust between
ic may have a lasting impact. Here are more time on board work may lead a board and management team
some examples: to a reduction in the number of required to navigate the current crisis
boards an individual can sit on and may produce a lasting shift in their
— Board agenda. The pressure may affect director remuneration. dynamics, such as more informal
to become more involved in The additional time commitment information exchanges.1
forward-looking strategic activities may come in the form of new ad hoc
immediately may permanently committees or a general increase — Diverse board composition. Boards
change a board’s agenda. The in a board’s involvement in forward- with diverse experiences and
board may appreciate the increased looking activities, both within the backgrounds drawn from a variety of
impact it can achieve through regular organization and with outside industries, functions, and geographic
involvement in strategy development stakeholders. areas will have a distinct edge in
or early succession planning, for effectively leading organizations
example, while management — Virtual board meetings. Boards may through the current crisis. As a
may value the ongoing input and start to recognize the advantage of result, enhancing board diversity may
challenge from the board. holding at least some board meetings become a high corporate priority.
virtually, which may broaden the pool
of prospective directors.
1
Robyn Bew, Linda Liu, and Friso van der Oord, “Building board-management dynamics to withstand a crisis: Addressing the fault lines,” September 2019, McKinsey.com.
Strengthen decision making by sharing crisis- Balance short-term and long-term priorities
management experience While a board needs to protect all shareholders’
Board directors with experience in managing and stakeholders’ interests by weighing key
external shocks, such as the aftermath of the 9/11 operational risks and ensuring effective cash
attacks and the 2008–09 financial crisis, will management and financial stability, it cannot lose
be particularly valuable sounding boards for a sight of the organization’s long-term priorities,
management team as it crafts response plans amid even as it focuses on short-term crisis response.
high uncertainty. Board directors’ insights from Preserving the foundation of the organization’s
earlier crisis situations can help them constructively competitive advantage, such as maintaining
challenge business-continuity plans, for example, investments in a digital transformation or customer-
or supply-chain strategies. That said, the current experience improvements, should be a key point of
crisis is uncharted terrain for all executives, making board attention.
intuition and experience unreliable guides and
cognitive biases particularly dangerous. As such,
boards should urge management to use techniques Return: Lead into the reconstruction phase
such as red and blue teams or premortems to ensure As business conditions start to stabilize, a board
that their decisions weigh all relevant factors.5 should strive to lift management’s ambitions and
5
See the Bias Busters collection on McKinsey.com.
position the organization to ride the waves of regular, joint strategy sessions with management to
uncertainty rather than be overpowered by them. discuss various alternatives and scenarios.
The severity of the disruption of this crisis suggests
that the path out will feel more like a reconstruction Review the operating model
than a recovery. Boards can add value by pushing A new strategy may require a broad review of an
early for scenarios and robust plans to be prepared organization’s operations. The board should trigger
for the reconstruction phase. the discussion, share external perspectives on the
operating models of comparable organizations,
Engage on major decisions and provide constructive challenges. It should also
As employees start coming back to work, a board encourage management to match critical talent to
should confirm that effective health and safety key strategic initiatives, especially new leadership
protocols are in place and continue to oversee talent that may emerge during the current crisis.
management’s integrated action plans. Some
decisions are more complicated than they at first Help manage shareholder and broader
seem—for example, a government stimulus package stakeholder commitments
may seem like a boon, but it can dilute shareholders’ Maintaining an ongoing, open dialogue with key
equity and come with unexpected strings attached. shareholders and other stakeholders should be
The board should also closely monitor the a key board responsibility as business conditions
management team’s evolving plans (such as slowing change. Managing interactions with governments
down new-product introductions and capacity and regulators may be particularly vital at this
expansions or accelerating resource reallocation) time, especially if an organization receives a
to ensure, for example, that these decisions do not stimulus package or other public assistance that
overly weaken the balance sheet amid challenging entails commitments. Major investors, including
capital-market conditions. activists, may also offer ideas for repositioning
the organization for the postpandemic era that the
Catalyze a strategy review board and management should consider.
Many organizations will have to rethink their product-
market focus, customer engagement, or pace of
technological innovation. During this period, a board Reimagination and Reform: Stay ahead
should encourage management to undertake a broad of the next normal
strategic reevaluation that could entail embracing some As businesses will shift focus on preparing
bold moves.6 It can foster this process by requesting themselves for the next normal, some changes
6
Chris Bradley, Martin Hirt, and Sven Smit, “Strategy to beat the odds,” McKinsey Quarterly, February 2018, McKinsey.com.
7
Martin Hirt, Kevin Laczkowski, and Mihir Mysore, “Bubbles pop, downturns stop,” McKinsey Quarterly, May 2019, McKinsey.com.
8
Robyn Bew, Linda Liu, and Friso van der Oord, “Building board-management dynamics to withstand a crisis: Addressing the fault lines,”
September 2019, McKinsey.com.
Martin Hirt is a senior partner in McKinsey’s Greater China office, Celia Huber is a senior partner in the Silicon Valley office,
Frithjof Lund is a senior partner in the Oslo office, and Nina Spielmann is a senior expert in the Zurich office.
The authors wish to thank Peter Bisson, Ian Davis, Conor Kehoe, Sajal Kohli, Jean-Christophe Mieszala, Asutosh Padhi,
Thomas Seitz, Shubham Singhal, Sven Smit, Kevin Sneader, Ramesh Srinivasan, and Bob Sternfels for their contributions to
this article.
1
For regularly updated articles on the business implications of the coronavirus pandemic and how organizations can respond, see McKinsey’s
collection, “Coronavirus: Leading through the crisis,” on McKinsey.com.
2
Martin Hirt, Kevin Laczkowski, and Mihir Mysore, “Bubbles pop, downturns stop,” McKinsey Quarterly, May 2019, McKinsey.com.
The CFO’s role in helping companies navigate the coronavirus crisis 147
Develop scenarios real time the effect that cash decisions are having
Amid this period of heightened uncertainty, on the company’s ability to ride out the downturn
finance and strategy teams will need to rely on a and resume business operations once demand
range of scenarios rather than on individual time- begins to bounce back.
horizon–based frameworks. 3 The finance leader
should develop a point of view about two or three Institute a communications plan
integrated scenarios that encompass multiple The CFO must take a lead role in the financial
eventualities—for instance, which paths might the and strategic aspects of crisis management. As
pandemic take, and which geographies or industries mentioned previously, the company’s primary
are poised for faster recovery than others? The CFO finance focus during this period will be on
should also articulate clear thresholds or trigger implementing a “cash culture”—that is, preserving
points that suggest what financial actions the cash and deploying it dynamically. The CFO
company will take and when. The financial planning must communicate this priority throughout the
and analysis (FP&A) group is uniquely positioned organization and help establish incentives to
to help in this regard, as it works closely with the reinforce it so that all departments and business
business units and can help project the effects of units understand “why this matters now” and what
the pandemic on various aspects of demand and their specific role is in helping optimize cash.
supply. Rolling forecasts should incorporate both
macroeconomic and company-specific data to It is equally critical to communicate proactively with
identify major areas of EBITDA risk. The forecasts boards of directors and investors. The message
should also identify second-order impacts, such as to both should focus on the crisis’s actual and
geographical supply-chain disruption and employee projected effects on the company, the actions being
dislocation, as well as likely sources of cash leakage taken to protect the business, the liquidity situation,
and customer-liquidity projections. and any changes to earlier earnings commitments.
In addition, the CFO would be wise to increase the
Once all this is in place, the CFO should guide the frequency of investor communications after the
creation of a framework that a small executive team first few months of upheaval, particularly when
can use to make business decisions (to rationalize new information is available. Such connections are
projects, for example) and monitor conditions (for essential for demonstrating that executives are
triggers that might cause various scenarios to taking fast and resolute action based on their best
unfold, for instance). The CFO will need to track in understanding of the situation. 4
3
“Economic Conditions Snapshot, March 2020: McKinsey Global Survey results,” May 2020, McKinsey.com.
4
For more on communicating with investors during this crisis, see Tom Kolaja and Tim Koller, “When investors call: How your business should talk
about coronavirus,” March 2020, McKinsey.com.
5
Martin Hirt, Kevin Laczkowski, and Mihir Mysore, “Bubbles pop, downturns stop,” McKinsey Quarterly, May 2019, McKinsey.com.
The CFO’s role in helping companies navigate the coronavirus crisis 149
backgrounds may be in particularly short supply. To their business on growth or expense actions. The
build up the finance bench, the CFO will need to finance team should launch a review of the portfolio,
scout for dynamic, proactive individuals; explicitly with a focus on achieving the full potential of each
recognize their performance; and support their business unit. This is a time to shelve incremental
experiments with new tasks and new roles on the thinking and seek out transformational plans that
fly. Additionally, with the likely sudden and dramatic could boost revenues or reduce costs—not by 5 to
rates of unemployment in many sectors (such as 10 percent but by 30 to 40 percent.
hospitality and travel), finance organizations may be
able to recruit top talent with some combination of Consider how M&A and divestitures could
the digital, finance, and business expertise required improve the portfolio
but that had previously been harder to find. Roiled markets and plummeting valuations can
create a ripe environment for M&A. CFOs should
be a leading voice in determining how to use M&A
Reimagine and reform: Thriving in as a tool to manage the crisis (through divestitures,
the next normal for instance) and to reallocate capital toward
Once the crisis abates, senior management will want high-priority needs (through product, geography,
to move forward. To enable the company’s pursuit or supply-chain acquisitions, for instance). A
of bold strategic moves, the CFO and peer execu- programmatic approach to M&A—where
tives should convene a small group of talented companies pursue frequent small and medium-
executives whose mandate is to focus on strategic size acquisitions—may hold some promise during
planning, with oversight and support from senior this disruptive period.7 Consider that during the
management and the board. The team will set the last financial crisis, companies that maintained a
game plan for investments, portfolio shifts, and programmatic approach to M&A outperformed
major productivity initiatives that will position the through the downturn and maintained excess TRS
company to win after the pandemic. through the recovery. In fact, the top-performing
companies through the downturn (those with
There are five big moves that our research shows top-quartile TRS) had the highest average
have the greatest impact on a company’s ability volume of annual transactions during that time
to significantly outperform the market: dynamic period and returned roughly six times that of the
resource reallocation, programmatic M&A, strong bottom-quartile performers. Similarly, resilient
capital expenditure, productivity breakthroughs, companies divested assets 1.5 times more than their
and differentiation improvement.6 All are important, nonresilient peers.
but in the current crisis, reallocating resources
for future growth, realigning the portfolio through Boost productivity through digitization
acquisitions and divestitures, and boosting This is the first economic disruption that requires
productivity are the most critical. a large part of the global workforce to perform
their duties remotely, making digital-collaboration
Adopt a transformation mindset when tools necessary to keep the business functioning.
reallocating resources But the finance team’s use of digitization to help
Crises are often opportune times to restructure the company manage the crisis should not be
parts of the business that require transformation considered a onetime event. Digital initiatives
(and to take the related charges). This one is that once seemed out of reach—from automated
no different. The CFO and finance organization closings to real-time forecasts—are now business
would be well served to adopt a transformation critical. The CFO and finance team should take a
mindset when they are setting targets, managing leadership position in advocating for the use of
performance, constructing budgets, or challenging digitization across the organization, long after the
6
Chris Bradley, Martin Hirt, and Sven Smit, “Strategy to beat the odds,” McKinsey Quarterly, February 2018, McKinsey.com.
7
Jeff Rudnicki, Kate Siegel, and Andy West, “How lots of small M&A deals add up to big value,” McKinsey Quarterly, July 2019, McKinsey.com.
Ankur Agrawal is a partner in McKinsey’s New York office, where Ishaan Seth is a senior partner; Kevin Carmody and Kevin
Laczkowski are both senior partners in the Chicago office.
The authors wish to thank Priyanka Chandanassery Prakash, Patrick McCurdy, Jonathan Slonim, and Marc Tellier for their
contributions to this article.
The CFO’s role in helping companies navigate the coronavirus crisis 151
© Yellow Dog Productions/Getty Images
When investors call: How your business should talk about coronavirus 153
If guidance assumptions have
changed as a result of COVID-19,
share that information—and describe
the challenges in thorough detail.
well the company could withstand a prolonged any established cost-cutting or restructuring
downturn as well as how decreased earnings could programs. Conversely, if the company is fortunate
affect any refinancing plans or other major long- and operating from a position of strength, it is
term decisions. The CFO should set the context helpful to share with investors any bold plans to
properly—providing a sense of what the liquidity seize opportunities that may appear during the
position is now and where it may be in three months, crisis period. The CFO must convey the company’s
six months, and 12 months. If there are concerns, preparedness for a range of possible outcomes in
the finance leader should share them up front. these discussions; investors will be looking for signs
Investors need to understand how the company of critical thinking.
plans to generate cash in this period of uncertainty.
Depending on the industry, the CFO and finance
team may need to weigh options to divest assets, Can you provide estimates?
delay capital expenditures, reduce working capital, Report to investors any changes in the company’s
or deploy cost-cutting programs. It is important capital-allocation plans, particularly any changes
to share those options and the timing of their in policies for dividends, capital expenditures, and
implementation with investors, as well as the logic M&A. It is not prudent to offer predictions for the
for why the company has decided to emphasize one rest of the financial year. In uncertain times like
course of action over another. Conversely, if the this one, promising a bottom-line number for next
company has high levels of cash, investors should year’s earnings can raise questions about how the
understand what the capital-allocation plan will company will get there. The “how”—or the actions
be. Given the current market, CFOs should not be you are taking—will be far more important to
surprised if investors express their preference that investors than the actual numbers.
excess cash be returned.
If guidance assumptions have changed as a result
Critically, the CFO should describe in detail for of COVID-19, share that information—and describe
investors the internal and external resources the the challenges with the same level of detail you
company may access in this time of crisis, even if would use during your company’s Capital Markets
just as a precaution—for instance, government aid, Day, in which the nitty-gritty of strategy and
credit lines and commitments from banks, potential business-development plans take center stage.
sale of real estate or other assets, or expediting Remember that it is better to be conservative
Tom Kolaja is a partner in McKinsey’s London office, and Tim Koller is a partner in the Stamford office.
The authors wish to thank Carsten Hirschberg, Stefan Kemmer, and Werner Rehm for their contributions to this article.
When investors call: How your business should talk about coronavirus 155
© TommL/Getty Images
That quote from a banking chief information to the crisis to starting to get ahead of it. We believe
officer (CIO) reflects some of the urgency and that CIOs who successfully guide their companies
pressure tech leaders are feeling. CIOs are facing through the first wave can not only stabilize
the greatest challenge of their careers. We are core business operations but also emerge with
seeing infrastructure breakdowns, denial-of- a reputation for effective leadership.
service attacks, and sites going down because
of traffic load. Even as companies grapple with In the past months, we’ve spoken with more than
the implications of the COVID-19 pandemic, it is 100 CIOs at global companies. Based on these
already clear that CIOs are playing a central role in conversations and our experience helping businesses
navigating the crisis. through previous economic crises, CIOs should
focus their energies in the next 60 to 90 days on the
The COVID-19 pandemic is first and foremost a following ten actions:
human tragedy, and technology is on the front lines
of this crisis. Many of the changes reshaping how
we work and live—from employees working remotely Focus on what matters now
to consumers shifting their shopping online— 1. Take care of your people. The CIO’s first order
rely on technology. And because technology ties of business is to take care of her employees. It’s
so much of every company together, CIOs important to acknowledge that people are focused
have a unique view into what’s really going on on caring for loved ones, managing their kids who
and how to manage it. are no longer in school, stocking up on necessities,
and trying to stay healthy, all while trying to do their
COVID-19 is a global phenomenon, and companies jobs. This requires empathy and flexibility from CIOs.
from Asia to Europe to the Americas are at different
stages of how they are reacting to the crisis. We CIOs are moving to provide flexible work arrange
see the crisis playing out broadly across three waves: ments—working remotely, in flexible shifts,
Wave 1, ensuring stability and business continuity and preparing for absences. One CIO recognized
while containing the crisis; Wave 2, institutionalizing that employees working from home will be
new ways of working; and Wave 3, using learning affected by school closures and quickly designed
from the crisis to prioritize tech transformation a backup support model for each essential
for resilience. individual. One global company has committed to
paying employees who contract COVID-19 so they
The focus of this article is on how CIOs can navigate can take the time to get healthy without worrying
the first wave and begin shifting from reacting over lost pay.
The CIO’s moment: Leadership through the first wave of the coronavirus crisis 157
For those people who still need to come into right solutions. In addition, CIOs should consider
work, CIOs have a responsibility to make the work lightly surveying remote workers to understand what
environment safe. One company, for example, has is and isn’t working to help refine capabilities and
created six work zones. People cannot cross support levels.
from one zone into another. If someone gets sick
in one zone, they can isolate it from the other zones 3. Get beyond the tech to make work-from-home
quickly. At one European financial organization, work. The sudden shift to employees working from
leadership has organized shifts so that key leaders home—one European institution saw its remote
are not in the same room and has identified backups workforce increase by 15 times literally overnight—
for executives and key managers. has created a host of issues, from inadequate
videoconferencing capabilities to poor internet
That focus on people also extends to working connectivity at employee’s homes. CIOs need
with contingent workers and vendors, many of to move quickly to advise the CEO and direct
whom work on site. Another banking CIO contacted the company on how best to work remotely before
all vendors to ask where each individual had been every department goes off and picks its own
physically during the previous two weeks, what they collaboration tools. Many CIOs are already buying
had been doing, and what their plans were for additional licenses and upgrading network to
the following week. This helped him understand who increase access. CIOs can address ISP capacity in
was truly needed on the premises and who wasn’t, employees’ homes by distributing 4G/5G modems
to reduce exposure for his own people. or reimbursing upgraded internet plans.
A CIO’s success in helping their people through In the end, however, tech is just an enabler. New
this crisis is likely to have a significant effect on ways of working require a culture change. CIOs can
employee loyalty and retention in the future. help to drive the cultural change by sharing best
practices and providing effective learning sessions.
2. Communicate confidently, consistently, and They can drive testing and learning from different
reliably. Uncertainty breeds fear and confusion. CIOs approaches and communicating them back to the
have to combat this reality by developing a crisis- business. Crisis management is a cross-functional
communication program based on being transparent game and the CIO is perfectly placed to facilitate the
with both the C-suite and employees about what new way of working.
the current situation is and the steps being taken to
address issues. Setting up regular briefings 4. Drive adoption of new ways of working. As
create a certain routine, which builds trust and con employees shift their work behaviors, many of them
fidence. Any delays to major deployments need to are confronting what can seem like a dizzying
be planned for and communicated. array of tools with little experience of how to use
them effectively. As one CIO confessed, “ensuring
The “how” can be as important as the “what.” One adoption of new tools and protocols has been the
CIO, for example, is texting the entire company with most frustrating part of the process so far.”
regular updates because he believes it matters
more that the communication is human rather than New behaviors typically take about 30 days to
coming from more “official” corporate channels. take hold, so CIOs need to promote them assertively
over the next month. As a rule of thumb, we’ve
Listening and learning are also crucial. Given how found that getting a tool adopted requires twice
fast the situation is moving, the CIO needs to be the investment of having it developed in the
the chief “learner” in these situations to help the rest first place. So while it’s necessary to provide clear
of the group to keep getting better and better guidance on tools and routines (for instance,
as things change. Just pushing out tech won’t work. downloading necessary apps or using multifactor
CIOs need to prioritize reaching out to different authentication), it’s crucial to invest in
stakeholders to understand their needs and the pres behavioral-nudging techniques, advanced
sures they’re managing in order to provide the training seminars, and certification to
The CIO’s moment: Leadership through the first wave of the coronavirus crisis 159
did a holistic infrastructure and network test to CIOs should upgrade capacity to handle more traffic
determine how their company would operate under loads on consumer-facing websites and apps,
different levels of capacity needs. Another did a roll out self-service tools and interactive-voice-
preemptive one-day stress test to remotely monitor response capabilities for customer-support needs.
and manage all core systems in case no personnel They can also increase dedicated lines to manage
could come to work. Developing use cases will help COVID-19-related calls, extend systems to enable
to scope this work, for instance, how much network customer-service employees to work remotely,
capacity to upgrade and how many licenses to and ensure sufficient coverage in user help desk to
secure. Another CIO determined that bandwidth cover increase in ticket volume. CIOs should
constraints were so severe that all communications also organize and group queries received by their
must be via audio rather than videoconferencing. help desk and call centers to find patterns and
see if additional actions are needed.
Finally, CIOs also need to partner with their
colleagues in other critical business functions to
evaluate system needs and prepare for changes Start anticipating what’s next
and support requirements. As the organization goes 8. Stay the course on key priorities. In this high-stress
virtual, for example, CIOs can stress test the situation, the natural instinct is to think about what
payroll process under various scenarios to ensure programs to cut and revert back to old ways of work
employees are paid. ing. It’s important, of course, to reevaluate priorities,
shift resources, and track progress closely. But
7. Enable the shift in business processes. Stress it’s also crucial to see that this current crisis is a major
on the system has come from spikes in a number of turning point and a competitive situation. We know
specific channels: call center, help desk, websites, from past crises, in fact, that companies that take a
and consumer-facing apps. In one McKinsey slash-and-hold approach fare worse than those that
survey of Chinese consumers from three weeks ago, both prune and thoughtfully invest.
online penetration has increased significantly
(+15 to 20 percentage points), in particular for cate CIOs need to take a through-cycle view and stay
gories with higher purchasing frequency.1 In Italy, committed to broader transformation goals they’ve
e-commerce went up from the last week of February been leading such as programs on data, cloud, and
by 81 percent.2 agile. Cloud migration provides the flexibility to
1
McKinsey survey of 1,249 people across 46 cities in China, February 2020.
2
E xpert interviews; “Coronavirus Nuovi dati sulle vendite della gdo in store e online,” GDOWeek, March 6, 2020, gdoweek.it.
Aamer Baig is a senior partner in McKinsey’s Chicago office, Klemens Hjartar is a senior partner in the Copenhagen office,
and Steve Van Kuiken is a senior partner in the New Jersey office.
The authors wish to thank Robert Levin and Rahil Jogani for their contributions to this article. They’d also like to thank Ritesh
Agarwal, Alessio Botta, Rob Cain, Isha Gill, James Kaplan, Gérard Richter, Kate Smaje, Marc Sorel, Hugo Sarrazin, Kevin Wei
Wang, and Rodney Zemmel for their insights.
The CIO’s moment: Leadership through the first wave of the coronavirus crisis 161
© Getty Images
by Tarik Alatovic, Meraj Chhaya, Shweta Juneja, Kate Smaje, and Alex Sukharevsky
Web <year>
Exhibit
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Exhibit <x> of <y>
ToTo leadtheir
lead their companies’digital
companies’ digitalresponse
responsetotothe
thecrisis,
crisis,chief
chiefdigital
digitalofficers
officers must
act across
must four four
act across dimensions.
dimensions.
Scale the use of agile and tools Be a resilient leader for the
for accelerated remote delivery organization and your people
4 1
Four dimensions of
CDO leadership
during a crisis
3 2
Engage with customers now Recraft the digital strategy and
and prepare for the next normal rebalance the product road map
Driving digital change during a crisis: The chief digital officer and COVID-19 163
be considering how to build in work flexibility to Our previous research has made it clear that
account for employees taking care of kids at home the best-performing companies have a digital
by, for example, shifting schedules; ensure access strategy that’s tightly aligned with the business’s
to resources such as tools and information-sharing overall strategy. While the COVID-19 crisis has
intranets; educate less digitally fluent colleagues introduced significant uncertainty about what
so they don’t feel overmatched by new demands the future holds, CDOs can help to develop digital
with, for example, brief training sessions; and have strategies based on scenarios detailing customer
frequent touchpoints such as digital town halls behavior shifts, business-model opportunities,
and pulse surveys, to gauge people’s mental and and their implications on digital and technology
physical well-being. This goes beyond the typical choices. They can help determine where potential
work check-ins and is absolutely necessary to help sources of value might lie and determine which
employees deal with the unprecedented stress of assets the business has—such as data, ecosystem
this current environment. People are a company’s collaborations, and platforms—and which business
most precious resource, and how successful a models to develop to help capture that value.
CDO is in making sure that his or her employees
are as healthy and supported as possible will be a At the same time, the CDO should work closely with
testament to his or her true leadership skills. his or her product leads as well as with the CMO
and CIO to shift product road-map priorities so
That focus on connecting with people extends, of that resources are available to address the most
course, to the C-suite. Given the cross-functional pressing needs, such as the following:
nature of digital transformations, the CDO should
be in constant communication with key leaders to — How to serve customers in a manner that
help them navigate the crisis and prepare for the safeguards their health, such as launching
recovery. That could mean working with the CFO QR payments or building contactless product-
to identify digital initiatives that can help build up delivery capabilities. In the United States,
cash reserves, aligning with the CIO on technology Walgreens has launched a service where
priorities to support prioritized digital programs, associates assemble orders and deliver them to
working with the CHRO to determine talent needs customers at a drive-through window.
given accelerated digital programs, and, of course,
working with the CEO to mobilize the organization — How to digitize interactions that used to be
around concepts that, in many cases, are new or handled in person, such as renewing debit
not particularly well known to him or her, such as cards or ensuring services. China-based
digital elements of the operating model or digitally Ping An Bank rolled out new “Do It At Home”
driven business models. functionality, which resulted in more than
eight million page views and nearly 12 million
2. Recraft the digital strategy and rebalance the transactions in two weeks. Singapore-based
product road map DBS used the CamelONE portal to settle trade-
To meet the surge in use of digital channels by financing transactions.¹
employees and customers, CDOs need to focus
both on short-term needs and on developing a — How to help transition customers from offline
clear perspective of the business’s longer-term to online channels, such as creating incentives
digital future. and support infrastructure (for example, scaling
up help desks).
1
“DBS accelerates trade digitalization efforts with more ‘industry firsts’ to drive greater efficiencies for customers,” DBS, March 2, 2020, dbs.com.
— How to work with regulators to help solve Since customer behavior is in the midst of a
pressing customer issues. In telemedicine, massive shift, CDOs cannot rely on past truths.
for example, some regulations have been What’s crucial is putting in place practices that
temporarily sidelined in an effort to accelerate allow for a continuous reevaluation of customers’
how doctors help patients during the COVID-19 priorities through test-and-learn exercises,
crisis. CDOs have a natural role in bringing close monitoring, and data analysis. A caring
together relevant parties from different organization will also engage with customers for
functions across the business to be prepared to feedback beyond the usual channels.
act in the case of changes to regulations.
CDOs should emphasize design-thinking principles,
— What infrastructure needs to be in place which are predicated on building empathy with
to support the development of new digital customers, to understand their motivations. We
channels and customer experiences, such know of CDOs who are reaching out to customers
as using microservices or migrating particular for one-on-one conversations, leading customer
capabilities to the cloud to enable rapid interviews, and compiling surveys to better
provisioning and load balancing. understand the challenges that customers face.
Additional capacity will be necessary to deliver As companies test new offers, channels, and
on this changing road map. The CDO should work communications, which have been necessitated
closely with teams to temporarily reallocate digital by the crisis, the CDO needs to have in place
staff and use outsourcing options for temporary a sensitive tracking and analysis capability to
staff augmentation. In the case where new people understand what’s working and what’s not so he
are needed, the CDO should work with the CHRO or she can double down on those that are effective
to create a plan for hiring people in the short and eliminate those that aren’t. To institutionalize
term, including understanding how to find talent this capability, CDOs should consider creating
in previously unexplored geographies and use a dedicated squad whose sole responsibility is
videoconferencing tools to conduct interviews developing a deep understanding of customers.
remotely. Furthermore, given the paramount Surveys, conversations, and detailed data analysis
Driving digital change during a crisis: The chief digital officer and COVID-19 165
on channel behavior—in social media, online ads, environments so they can contribute remotely and
and search engines—using updated algorithms that frequent automated deployments can take place
don’t rely on outdated pattern recognition need to should be a priority for the CDO. Many Chinese
be part of a customer understanding “reset.” The companies have rapidly adopted local productivity
customer insights gathered should drive priorities solutions, such as Alibaba’s DingTalk or WeChat
in recrafting the product road map for product Work to communicate and deliver weekly meetings,
improvements and feature development. training, and lectures.
The CDO of a major mining corporation, for example, Additionally, collaboration tools must be selected
learned that upstream partners were frustrated based primarily on their familiarity to employees
about the lack of visibility into production. So he and ease of integration, as opposed to cost,
created an online portal to ensure transparency. In while also ensuring proper security protocols
another example, noting the concerns customers are followed. CDOs will need to collaborate with
had around the coronavirus, the CDO of a leading information security and risk departments to
bank launched a digital campaign to inform fast-track their approval, and take necessary
customers of the steps it was taking to stop the precautions to safeguard corporate data, such
spread of the virus and offering digital options to as requiring the use of multifactor authentication,
support banking transactions. virtual private networks (VPNs), and regular
automated backups. The CDO will also need to
4. Scale use of agile and collaboration tools for closely collaborate with the CIO in making the tools
accelerated remote delivery easily available to the digital employees.
Agile working has been a well-established model
for teams looking to work quickly and efficiently. Many of the tools are scalable because they live on
In the past, however, the key issue has been how the cloud. CDOs, however, will need to implement
to scale. With remote working conditions the change-management efforts, including training
new standard, CDOs can use the moment as an teams on how to use them and defining new ways
opportunity to better understand what it takes to of working so that the tools are used properly—and
scale agile. actually help. A crucial component of this effort
is for the CDO to be a role model. This includes
While co-locating agile teams has traditionally communication of the importance of punctuality,
been the most productive working model, the of scheduling ceremonies consistently, and of
necessity of remote working is putting that motivating employees so that they always appear on
experience to the test. The first element of video. Surprise “visits” by the the CDO to ceremonies
effective remote agile is just ensuring that can also help to motivate all tribes and squads.
established ceremonies are followed, such as the
daily stand-up, sprint refinement and grooming, Since teams are actively and continually learning
sprint planning, sprint demo and review, and from these new ways of working, CDOs should put in
sprint retrospective. Additionally, squads should place systems to help share that learning across the
have ad hoc huddles as needed for design and organization. Sprint retrospective sessions should,
development, facilitated by the scrum master. in part, be used to determine how the new remote
way of working fits the organization and to codify
Ensuring that people can collaborate remotely best practices. Gamification can help, through
is crucial for this new agile model to work. In posting leaderboards and by rewarding those who
the case of developers, for example, providing contribute the most learnings to the organization.
Tarik Alatovic is a partner in McKinsey’s Johannesburg office, where Meraj Chhaya is a specialist and Shweta Juneja is an
expert associate partner; Kate Smaje is a senior partner in the London office; and Alex Sukharevsky is a senior partner in the
Moscow office.
The authors wish to thank Raphael Bick, Ralf Dreischmeier, Ari Libarikian, Barr Seitz, Joydeep Sengupta, and Belkis Vasquez-
McCall for their contributions to this article.
Driving digital change during a crisis: The chief digital officer and COVID-19 167
© Getty Images
Industries at the forefront of the crisis are also — lead solutions to crisis-triggered challenges
relying on data in innumerable ways to inform their to come
response to the crisis. Healthcare providers, for
instance, are leveraging data from countries that — prepare for the next normal (and execute soon)
were affected earlier by COVID-19 to forecast needs
for hospital beds, masks, and ventilators. Grocery These insights are based on our discussions with
chains are using sales data to help distributors data leaders across industries over the past few
identify and ship the items most important to their weeks and our experience from previous crises,
customers. Meanwhile, the sectors we rely on to both financial and health related.
keep the wheels of the economy moving are using
data to inform their operations. Telecom players,
for example, are using network traffic data to Ensure data teams—and the whole
decide where to upgrade capacity in response to organization—remain operational
the tremendous demand for bandwidth from an The priority for CDOs is to take steps to protect
increasingly remote workforce. employees and help keep the organization up and
running, safeguarding data as companies move fast
Chief data officers (CDOs) in every industry will play to respond to the crisis.
a critical role in crisis response and the next normal
that follows. In today’s high-stakes environment, Enable business continuity. Many institutions have
where misinformation proliferates and organizations data technology or operations in multiple locations,
must make decisions at a rapid pace, there’s including offshore, which must remain closed or
arguably never been such an imperative for CDOs to operate with skeletal capacity. CDOs must continue
provide organizations with timely and accurate data. to provide for the health and safety of their team
members and colleagues first and foremost. As the
Senior executives will need ready access to both situation develops and shifts, data leaders should
new and newly critical data to make unprecedented continue to revisit the business-continuity plans for
How chief data officers can navigate the COVID-19 response and beyond 169
their data operations to ensure that there is adequate (PII), since traditional data controls may not work.
support on core data platforms, identifying key CDOs need to work with their information-security
personnel and obtaining the required government peers to update the controls in place, particularly
waivers for maintaining the critical infrastructure. on their key data assets by, for example, limiting
the ability to export data. CDOs could also update
Set up a dedicated COVID-19 data nerve center. policies to incorporate the remote-worker role with
The COVID-19 data nerve-center team should limited permissions, for example, to take and print
include report owners, data stewards, data screenshots or use external storage devices.
engineers, data scientists, and data-visualization
specialists. This group should be tightly integrated
with the enterprise-wide COVID-19 response team Lead solutions to crisis-triggered
that is likely already in place and drive data efforts challenges to come
that address the broader team’s needs as well as Organizations will face a vast number of challenges
those of other leaders, such as rapid development of in the coming months as they adjust to new ways
executive dashboards and daily reports on company of working and serving customers, and potentially
performance. In response to these urgent requests, confront additional waves of the virus’s spread.
we’re seeing companies quickly adopt tools such as CDOs can help in several areas.
robotic process automation to ingest and process
data much more rapidly than they could in the past. Plan for likely stress scenarios. During the 2008
financial crisis, banks struggled to aggregate the
Ensure data protection and privacy. Organizations data needed to prepare reports for mitigating risk.
are being forced to operate in ways they have never Since then, many banks have invested in these
had to consider, such as having a large portion of capabilities—driven in part by the regulatory push
their staff working remotely for extended periods of the Basel Committee on Banking Supervision
of time. As organizations rapidly adapt to these regulation 239 (BCBS 239) principles—an
changing needs, they are exposing their data investment that’s paying dividends in the face
assets to a variety of new attack vectors as well as of the COVID-19 crisis. CDOs in other industries
increasingly aggressive versions of existing foes should adopt similar practices in an effort that
(bad actors that deploy ransomware, for example, supports their company’s plan-ahead team. The
know hospitals do not have time for lengthy effort should begin with identifying the probable
negotiations). There are also rising data-security stress scenarios—such as another rapid increase
concerns around providing riskier employees with in the infection rate, geopolitical events, or
remote access to personally identifiable information bankruptcies—defining the types of reports
Contribute to data ecosystems for public good. Leverage momentum to invest in the future.
Evaluate opportunities to exchange data (including Chances are that CDOs will build out new
that which may not have been deemed useful earlier) capabilities or showcase the value of existing
with peers at adjacent companies, government ones as they contribute to the crisis response.
agencies, and nongovernmental organizations Some of these could serve as the building blocks
(NGOs) to help solve societal problems related to for long-deferred initiatives, such as developing
the current crisis. An alliance of researchers and a 360-degree view of the customer, adopting
technology leaders recently launched the COVID- consistent tool sets and processes, or modernizing
19 Open Research Dataset (CORD-19) and were their data architecture and moving to the cloud.
supported by the White House in issuing a call They can also serve as a catalyst to recommit to—or
to action to develop new text- and data-mining perhaps even set bolder—organizational aspirations
capabilities to help answer questions about the to become data driven. Businesses are likely
disease. The European Commission is convening getting even more practice using data as they make
a group of leading telecoms in Europe to leverage decisions on the back of crisis-related data. Build on
anonymized cell-tower data to enable cross-country these efforts by setting stretch goals such as having
How chief data officers can navigate the COVID-19 response and beyond 171
CDOs should proactively engage
business leaders now to understand the
challenges likely to arise throughout the
phases of the crisis and its aftermath so
that the data is on hand when it’s needed.
all meetings and key decisions backed by data. Build resiliency for future crises. Invest in additional
While implementation of these initiatives will require capabilities that will allow the organization to create
time, they have the potential to shore up the health more flexibility and timeliness in data aggregation
of the organization and prepare it for the future. and reporting. One example would be to proactively
conduct “drills” to simulate a scenario and produce
Review and revamp offerings. The crisis will force and discuss ad hoc reports. By strengthening this
CDOs to review their offerings based on new needs muscle, we expect that organizations will be much
arising from the next normal, which is likely to be better prepared for any subsequent outbreaks
more digitized than ever before. Risk reports and or other crises—which are likely throughout the
other business intelligence will likely change along coming decades.
with the data that populate them. Data and models
for churn or attrition, workforce management, Rethink and digitize physical processes and
relationship deepening, digital marketing, and footprints. Many organizations will need to rapidly
supply-chain and market analytics will all need to be reinvent processes that previously required physical
refreshed. This will be an intensive and significant documents, to become paperless. Enabling the
undertaking for the entire organization, requiring submission of scanned copies for document
visionary and communicative CDO leadership. verification and supporting contactless servicing
capabilities (for example, by creating digital forms
Hire and retain top talent. Good data employees can to replace physical forms and enabling electronic-
be hard to replace, so finding ways to protect them signature capture) will likely be key priorities.
should be a top priority for the CDO. Additionally, as Organizations finding rapid success in these areas
smaller organizations and start-ups face financial are adapting solutions that are already used by other
instability through the crisis, top data talent may be business units or for other products. Any entirely
looking for work. Make it a priority to hire this talent new processes that are developed will require ample
for the betterment of society, the economy, and your time for testing.
team. Some companies have already taken measures
to establish themselves as a “safe-harbor brand” on For sectors with a significant physical footprint,
the talent market and are bringing in top talent who such as brick-and-mortar retail, CDOs should lead
were previously not interested in joining. They are the way in enabling key decisions—for example, by
using this momentum to transform their culture and crossing geospatial data for their stores with data
ensure that top-tier talent remains onboard. on propagation of the virus to help leaders decide
Kevin Buehler and Allen Weinberg are senior partners in McKinsey’s New York office, where Jorge Machado and Kayvaun
Rowshankish are partners; Holger Harreis is a senior partner in the Düsseldorf office, where Asin Tavakoli is an associate
partner; and Satyajit Parekh is an expert in the Waltham office.
How chief data officers can navigate the COVID-19 response and beyond 173
© Getty Images
1
Sean Gregory, “ ‘Without empathy, nothing works.’ Chef José Andrés wants to feed the world through the pandemic,” TIME, March 26, 2020.
Leading with purpose: How marketing and sales leaders can shape the next normal 175
Web <year>
<article slug>
Exhibit <x> of <y>
Exhibit 1
The US
US isismore
moreoptimistic
optimistic than
than European
European countries
countries but
but less less optimistic
optimistic than
than India
or China.
India or China.
Confidence in own country’s economic recovery after COVID-19,1 % of respondents
US India China S. Africa Germany Brazil UK Spain France Italy S. Korea Japan
4/6-12 4/3-6 4/1-6 3/24-26 4/2-5 4/2-5 4/3-5 4/2-5 4/2-5 4/2-5 4/3-6 4/3-5
4
15 15 15 14 11
24 23
28
36
56 53 46
45 50
58 54 61
49 59
64
46
33 45 50
40 35 32 28
23 27
16 19
11 12
2
Optimistic: The economy will rebound Unsure: The economy will be Pessimistic: COVID-19 will have
within 2–3 months and grow just as impacted for 6–12 months or lasting impact on the economy
strong as or stronger than it was longer and will stagnate or show and show regression/fall into
before COVID-19 slow growth thereafter lengthy recession
1 Q: How is your overall confidence level on economic conditions after the COVID-19 situation? Rated from 1 “very optimistic” to 6 “very pessimistic”; figures may
not sum to 100%, because of rounding.
Source: McKinsey & Company COVID-19 Consumer Pulse Survey (China n = 1,048 including Hubei province), (South Korea n = 600), (Japan n = 600),
(India n = 582), (US n = 1,063), (Brazil n = 1,311), (UK n = 1,000), (Germany n = 1,002), (France n = 1,003), (Spain n = 1,003), (Italy n = 1,005), (Portugal n = 601),
(South Africa n = 535)
2
For more, read Martin Hirt, Kevin Laczkowski, and Mihir Mysore, “Bubbles pop, downturns stop,” McKinsey Quarterly, May 2019.
Web 2020
Leading with purpose: How marketing and sales leaders can shape the next normal
Exhibit 2 of 4
Exhibit 2
Impactononspend
Impact spend changes
changes by category:
by category: ~40-50%
~40-50% of B2Bsof B2Bsspending
predict predict spending
stability/
stability/increases across product and service
increases across product and service categories. categories.
How has the coronavirus (COVID-19) situation affected your company’s budget for the following
areas? % of spending changes 1
Leading with purpose: How marketing and sales leaders can shape the next normal 177
manage the downturn and come out in better downturn. Among the many levers they need
shape than their peers. This lean mindset extended to utilize, we believe they should prioritize the
to decision making as well. During the 2008–9 following:
financial crisis, organizational “nerve centers,”
which brought together top executives and top 1. Lead with purpose
talent into a single team, were used to accelerate In a time when people are frightened, unsure, and
decision making and drive rapid execution. facing dire economic conditions, brands have an
outsized role to play in their communities. This
2. Marshal resources includes corporate social-responsibility initiatives
During the 2008 financial crisis, resilient designed to meaningfully support your customers
companies were 27 percent more likely than less and the community. While any assistance is
resilient companies to divest slow- or no-growth important, we believe that those contributions that
assets. Among other benefits, this approach are authentic, brand appropriate, and truly helpful
allowed them to look for strategic investments and are more likely to not only be appreciated but also
advance new market opportunities. to have a positive and lasting impact on customers.
3
McKinsey B2B Decision-Maker Pulse Survey, April 2020 (n=622).
Leading with purpose: How marketing and sales leaders can shape the next normal 179
Web <year>
<article slug>
Exhibit <x> of <y>
Exhibit 3
Whenordering
When orderingfrom
from suppliers,
suppliers, B2BB2B customers
customers highlyhighly value digital
value digital self-serve.
self-serve.
Which of the following methods do you/would you most prefer to use when submitting your order?
Please rank up to 3 that would be most beneficial.
% of respondents ranking in top 3 1
X% % YoY change 2019 2020
Lorem ipsum
53 53 N/A 39 11 37 46 39 50 31 53 33 39 30 47 27
To be ready for demand when it picks up, CMSOs help win customers. Investing in value-selling
will need to zero-base their marketing and sales capabilities as well as continuous reviews of sales
strategies and develop a clear view of what their incentives and pricing targets will be crucial to
customers value. B2B customers, for example, making sure companies are both relevant—and
have indicated that they value the ability to use sensitive—to their customers.
a mobile app when ordering from suppliers.
Unbundling products and services to tailor them Past behaviors and habits won’t necessarily be
more closely to customer needs or restructuring what consumers and customers want when the
payments—by moving to a recurring revenue or crisis ends, so developing a clear perspective
subscription model, or lowering up-front fees to on which habits will stick, which won’t, and for
better reduce customers’ near-term outflows—can which segments will be crucial. That reality is
Leading with purpose: How marketing and sales leaders can shape the next normal 181
Web <year>
<article slug>
Exhibit <x> of <y>
Exhibit 4
SHAPEyour
SHAPE yourresponse
response to the
to the post-COVID-19
post-COVID world. world.
Human-centered • Prioritize safety of people and • Upskill your employees • Rev up next-gen talent
responses and customers, work from home, with next-gen skills model, eg, new HR
interactions masks/sanitizer • Support virtual work and processes across recruiting,
• Do good to do well in wellness programs retention, engagements
communities
Accelerated digital • Maximize digital sales • Radically accelerate • Integrate data at scale and
and tech • Enhance digital capabilities to analytics, eg, updated AI across your entire
drive core processes, eg, pricing/promo thresholds, organization
predictive trigger analytics triggers • Leverage digital efficiencies
• Create digital consumer to restructure operations
decision journey and
sales journey processes,
eg, omnichannel,
virtual sales, digital trial
Purpose-driven • Meet the moment with • Connect with brand • Redesign value
customer playbook messaging and actions loyalists propositions for new reality
• Tailor messages to new • Tie community-based • Power up customer
consumer decision journey messaging to brand experience in line with
and near-term needs • Engage beyond the purpose
transaction • Expand connections with
customers, eg, content
Ecosystems to • Assess profit pools to • De-risk supply chain and • Power up innovation engine
drive resilience optimize value chains focus on plans to meet • Identify opportunities to
demand, eg, outsourcing, rethink entire value chain,
flexible inventory eg, acquisitions,
outsourcing, partnerships
line work-from-home sales and marketing tech-based response, with CMSOs leading
talent to capitalize on new pockets and pools the drive to develop better analytics to
of talent that are suddenly available in a full- understand customers at scale, a more flexible
remote operating model. and scalable tech stack to drive business
innovation and channel rollout, and digitized
— Accelerated digital, tech, and analytics. The processes to accelerate and improve decision
crisis represents a permanent inflection point making. Many B2B companies, for example,
in the shift to digital. This reality demands a have found that advanced analytics provide a
Brian Gregg is a senior partner in McKinsey’s San Francisco office, Aimee Kim is a senior partner in the Seoul office, and
Jesko Perrey is a senior partner in the Düsseldorf office.
Leading with purpose: How marketing and sales leaders can shape the next normal 183
Acknowledgments
McKinsey Publishing would like to thank, first and McKinsey.com/Insights app/Social Media
foremost, the many authors of these articles, for Nicole Adams, Devin Brown, Torea Frey, Stephanie
their insights into and analysis of this global crisis. Grayson, Mary Halpin, Mona Hamouly, Lauren
Holmes, Eleni Kostopoulos, Simon London, and
A special thank-you to senior partner Peter Kathleen O’Leary
Dahlstrom, whose leadership of McKinsey
Publishing and Communications inspired us to reach McKinsey Quarterly
for—and achieve—the next normal in publishing. Julia Arnous, Frank Comes, Lang Davison, Tom
Fleming, Drew Holzfeind, Jason Li, Mary Reddy,
And we want to acknowledge the many direct Astrid Sandoval, David Schwartz, Holly Skillin,
contributors who offered vital energy and expertise— Rick Tetzeli, and Allen Webb
under extraordinary personal and professional
circumstances—to the development, editing, risk McKinsey colleagues
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design, production, and dissemination of our Anne Blackman, Marianne Blum, Daniel Bocian,
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