The Next (New) Normal | Which Leadership Model will be the Winner?
Italy is the world’s eighth largest economy and the third-largest national economy in the European Union by nominal GDP. It was also one of the first countries to announce a national lockdown, effectively quarantining more than 60 million people. In early 2020, Amrop Italy was invited by the Rome Chapter of Bocconi Alumni to conduct a leadership survey. What changes have companies made to their leadership models and behaviours in response to Covid-19?
Spearheaded by Amrop Italy Partner Franco Gnocchi, this report draws on the insights and hard-earned lessons of a handpicked selection of senior executives, blending organizational psychology with business pragmatism.
The coronavirus is continuing to profoundly re-shape the economic, organisational and societal landscape. Which leadership model will win?
In this report you will find 5 clear avenues for business leaders.
Not only in containing the effects of the crisis, but in using the experience as a source of positive transformation in leadership and organisational culture.
When it comes to the direct responses of organisations to the unexpected and disruptive events brought by the coronavirus crisis, clear themes emerge — and their ‘solidarity’ is striking. Notably, leaders report serious gaps in knowledge and experience. As we will see, the immediacy and force of the pandemic emergency forced an urgent re-evaluation of the categories and meanings companies typically assign to crisis situations.
To paraphrase Hegel: when a crisis strongly increases its quantitative intensity, it inevitably becomes qualitative and therefore unpredictable and new. This demands responses that are completely innovative, outside the categories of previous knowledge.
Also resoundingly clear was the need for leaders to use a different approach and tone to communicate, ensuring that all employees and stakeholders clearly received messages. “Like an unexpected companion” the pandemic urged managers to use a concrete language that related more closely to the lives of stakeholders than the technocratic and hermetic formulations typically used by organisations.
These were mainly features of the pandemic’s early days. It was at that moment, with the onset of social distancing, that the atmosphere of uncertainty and perceptions of danger ran highest.
It was essential for companies to demonstrate and exercise their capacity for widespread support. The firm and understandable language called for had to convey transparency and unity — facing issues together. A language of support and responsibility.
This, in our opinion, was one of the first major challenges that management and their organisations had to overcome.
It became a focus theme during a survey whose participants have shared their invaluable and detailed insights. Not only regarding the experiences of the people on the business front lines in these extraordinary times, but on avenues towards the ‘new normal’.
Key findings and Keywords
1 - Disorientation
The disorientation linked to the pandemic has played the role of ‘forerunner’ – stimulating executives to experiment with new leadership practices, or to step up their pace.
2 - Taking charge, accountability, responsibility
Disorientation and experimentation alone would not have sufficed for effective change management. Also needed was a general predisposition to take individual responsibility.
Forced and active experimentation: Forced experimentation is a consequence of disorientation. Only through a more experimental approach (with greater error tolerance) was it possible to cope with the pandemic’s disruptive novelty.
3 - Recognition and Reward – new actions
4 - Comunication and closeness - development of a “virtual community”
Individual empowerment was greatly facilitated by a range of supportive actions (especially at the beginning of the pandemic) and the organisation's closeness to the individual. In this situation, typical elements of emotional intelligence, such as empathy and cooperation, played a decisive role on the part of management.
Equally, actions of recognition and reward for ‘virtuous’ behaviors, as well as continuous and transparent communication, have helped to create a positive environment and a sense of togetherness within the organisations surveyed. The difference and distance that usually characterises corporate hierarchy has been somewhat attenuated.
5 - Co-creation and a sense of belonging
The emphasis on communication and closeness between the individual and the organization, with the reduction of the constraints typically linked to a rigid hierarchy have raised people’s capacity to embrace and propose new initiatives. Encouraged by management, there has been a boost in co-created initiatives aimed at solving the problems caused by the pandemic.
Leading Questions – a Diagnostic Framework
- Kick-off: how have leadership behaviors changed in your organisation in the face of the pandemic? What are the main observable trends and what mechanisms does the organisation offer?
- Operational and person-centered leadership: has the pandemic and its resulting disorientation led to individuals, prompted by the organisation, to combine their usual operational leadership with a more people-orientated leadership style? How did this change take place?
- Leadership and employee engagement, creativity and autonomy: has the increased use of homeworking in response to the pandemic encouraged a leadership style focused more on facilitating employee autonomy and creative problem-solving? Has there been a development in delegation with respect to control? Does all this affect levels of employee engagement?
- Cost containment and engagement: how much has the greater attention to cost control, linked to the pandemic’s negative economic impact, affected leadership behaviors? How much of an impact has this had on employee engagement?
- Leadership and communication: to what extent and how effectively can internal communications, both at institutional and management level, affect an organisation’s ability to manage the complexities brought about by the pandemic?
- Leadership and Business Development: homeworking strongly limits direct contact between people. How greatly does this limitation affect sales and business development? What can leadership do and what have they done to address potential gaps in effectiveness and achievement?
- Leadership in the face of uncertainty, in particular with regard to employees experiencing stress and anxiety: how does management lead teams in times of uncertainty, fear and stress? Can leaders manifest an empathetic ability to orientate people’s behavior in a positive way?
- Homeworking (remote working) vs smart working: in the light of the changes underway, can the activities involved in homeworking evolve into “smart working” with a resulting increase in the level of autonomy of employees, and adequate MBO practices?
What’s Next? Challenges and Potential Leadership Actions
The actions emerging from our survey were responses to a crisis, a radical disorientation. The question is: once the situation stabilises, will this positive tension persist? How can we maintain it? Here are 7 avenues:
- There have been shifts in management behavior, towards more empathetic micro-management, for example. Will these be consolidated? What other examples can we find? Using what tools and interventions?
- Operational leadership is often geared towards efficiencies and anchored in short-term results. Will middle managers be able to maintain the trend towards co-creation and their inclination towards bottom-up proposal-making?
- Many organisations saw the emergence of a more inclusive leadership model. Will this take root post-crisis? How can we facilitate more advanced forms of leadership? Through executive coaching? By bringing into play the companies most senior experts, for example, with ad hoc mentoring programs? How to deploy change agents to transform a corporate culture?
- How can the solitude of leaders be eased in the face of these challenges and the new complexities that will continue to present themselves?
- Will we see the development of ‘error coaching’, a cultural change where error is understood to be a possible outcome for those who take action, and not as a partial failure?
- Will cost containment measures be compatible with a culture of engagement?
- Will the homeworking experiment be able to turn into true smart working practices? How will we manage the tension between the need for control, and the autonomy of the employee working remotely?
By Franco Gnocchi, Partner, Amrop Italy
With a focus on Leadership Services, Franco Gnocchi is a Professor at the European University of Rome, specialising in Organizational Development and Leadership within the Faculty of Psychology. Before moving to talent management consulting, Franco spent a major part of his career in senior HR positions, for AC Nielsen. IMS Health (Dun & Bradstreet Group), and Millward Brown (WPP Group). In 2008 he started his experience as a senior HR consultant. His expertise includes HR Development, Leadership Assessment, Mindset Change and Executive Coaching. Franco holds a degree in Political Sciences and attended a Master in HR and Organization at SDA Bocconi (Milan). He is a Professional Certified Coach with the ICF, fluent in Italian and English.
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