Coronavirus: 15 emerging themes for boards and executive teams

11 Ways To Create More Time To Think | Auguste rodin, Rodin, Rodin ...

Board directors and executives can pool their wisdom to help companies grapple with the challenge of a lifetime.

As Winston Churchill said, “Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.” We are seeing some faint signs of progress in the struggle to contain the pandemic. But the risk of resurgence is real, and if the virus does prove to be seasonal, the effect will probably be muted. It is likely never more important than now for boards of directors and executive management teams to tackle the right questions and jointly guide their organizations toward the next normal.

Recently, we spoke with a group of leading nonexecutive chairs and directors at companies around the world who serve on the McKinsey Resilience Advisory Council. They generously shared the personal insights and experiences gained from their organizations’ efforts to manage through the crisis and resume work. The 15 themes that emerged offer a guide to boards and executive teams everywhere. Together, they can debate these issues and set an effective context for the difficult decisions now coming up as companies plan their return to full activity.

Managing through the crisis

1. Boards must strike the right balance between hope for the future and the realism that organizations need to hear. There are many prognostications on what comes after COVID-19. Many will be helpful. Some will be right. Boards and managers may have some hopes and dreams of their own. Creating value and finding pockets of growth are possible. It is important to have these aspirations, because they form the core of an inner optimism and confidence that organizations need. However, leaders should not conflate aspirations with a prescience about the future.

2. The unknown portion of the crisis may be beyond anything we’ve seen in our professional lives. Boards and managers feel like they might be grappling with only 5 percent of the issues, while the vast majority are still lurking, unknown. Executives are incredibly busy, fighting fires in cash management and other areas. But boards need to add to their burden and ask them to prepare for a “next normal” strategy discussion. Managers need to do their best to find out what these issues are, and then work with boards to ensure that the organization can navigate them. The point isn’t to have a better answer. The point is to build the organizational capability to learn quickly why your answer is wrong, and pivot faster than your peers do. Resilience comes through speed. This may be a new capability that very few organizations have now, and they will likely need to spend real time building it.

3. Beware of a gulf between executives and the rank and file. Top managers are easily adapting to working from home and to flexible, ill-defined processes and ways of working, and they see it as being very effective and also the wave of the future. Many people in the trenches think it is the worst thing to happen to them (even those that are used to working remotely). Remote working is raising the divide between elites and the common man and woman. There is a real risk of serious tension in the social fabric of organizations and in local and national communities.

4. Don’t overlook the risks faced by self-employed professionals, informal workers, and small businesses. These groups are often not receiving sufficient support. But their role in the economy is vital, and they may be noticed only later, when it is too late.

5. Certain industries and sectors are truly struggling and require support. Several disrupted industries and many organizations in higher education, the arts, and sports are severely struggling and require support to safeguard their survival.

Return to work—the path ahead

6. Mid- to long-term implications and scenarios vary considerably. It’s important to differentiate between industries and regions. Some industries may never come back to pre-COVID-19 levels.

7. What went wrong? Boards and executives, but also academics, need to debate the question. Where should we have been focusing? Take three examples. Why did companies ignore the issue of inadequate resilience in their supply chain? The risks of single sourcing were well known and transparent. Also, why did we move headlong toward greater specialization in the workforce, when we knew that no single skill was permanently valuable? Finally, why did we refuse to evolve our business models, although we knew that technology and shifts in societal preferences were forcing us down a treadmill of ever decreasing value-creation potential?

8. How can we prevent a backlash to globalization? The tendency toward nationalism was already strong and is growing during the crisis. The ramifications will be challenging. For example, in pharmaceutical development, residents of the country where a pharma company has its headquarters may expect to get the drug first. Global companies, despite their experience, may find it harder to address and engage directly with diverse, volatile, and potentially conflicting stakeholders. In such times, societies may need someone to mediate between the private sector and some of these stakeholders.

9. Companies need help with government relations. Strong government interventions are occurring on the back of a serious loss of confidence in free-market mechanisms. There is little question that different governments will land on different answers to the debate around how free markets really ought to be structured. The corporate community has been thrust into a new relationship with government, and it is struggling. The government landscape is fragmented, with highly varied approaches and competencies. Companies are looking for a playbook; no one has an infrastructure to manage this complexity.

10. Where will the equity come from, and with what strings attached? Governments are propping up various sectors with new capital. What will they receive in return? Will they distort markets? How can companies manage this process carefully to emerge from the crisis with a stronger balance sheet? Further, much more capital is likely needed; presumably some of it will come from the private sector. Will capital markets be effective and trusted in such times? Who governs this overall process, and what role should the government play? Is it the time for more state funds?

11. The balance between profits and cash flow is tricky, and essential to get right. Many companies are caught right now and are sacrificing their bottom line in order to pay for their financing. That’s not sustainable; companies will need guidance on how to balance the two.

12. It may be time for responsible acquisitions, including to help restructure certain industries. Many “resilients” have “kept their powder dry,” and are now ready to acquire. But they need to be sensitive and allow sellers a good path to exit. We need guidelines for responsible acquisitions.

13. Cyberrisk is growing. Remote working increases the “attack surface” for criminals and state actors. Both are more active. Chief information officers and chief information security officers are grappling with the overwhelming demand for work-from-home technology and the need for stringent cybersecurity.

14. Innovation may never have been so important. Innovation has always been essential to solving big problems. The world is looking not just for new things but also for new ways of doing things (especially on the people side, where we need new behaviors, long-term rather than short-term), capabilities, and work ethics.

15. The path ahead will surely have ups and downs and will require resilience. As lockdowns are relaxed, and segments of the economy reopen, viral resurgences and unforeseen events will keep growth from being a straight line going up. It will likely be a lengthy process of preserving “lives and livelihoods” over several months, if not years. The reality is that many or even most business leaders made choices over the past decades that traded resilience for a perceived increase in shareholder value. Now may be the moment to consider that the era of chipping away at organizational resilience in the name of greater efficiency may have reached its limits. This is not to say that there are no efficiencies to be sought or found, but more that the trade-off between efficiency and resiliency needs to be defined far more clearly than it has been in recent years.

It is the board’s responsibility to coach and advise its management team, especially when the terrain is trickier than usual. However, boards should not mistake the need for vigorous debate with the need for consensus. More than ever, a bias to action is essential, which will frequently mean getting comfortable with disagreement. Apart from all the operational focus needed for the return to work, it is even more important that boards and management teams take a step back to reflect upon these 15 core themes. In summary:

  1. Take the time to recognize how the people who (directly or indirectly) depend on the company feel.
  2. Have aspirations about the post-COVID world, but build the resilience to make them a reality.
  3. Strengthen your capability to engage and work with regulators and the government.
  4. Watch out for non-COVID risks, and make sure to carve out time to dedicate to familiar risks that have never gone away.
  5. Find out what went wrong, and answer the uncomfortable truths that investigation uncovers.




Battling the ‘pandemic of misinformation’

Social media used to spread, create COVID-19 falsehoods

During COVID-19 Pandemic It Isn't Just Fake News But Seriously Bad ...

Ubiquity of social media has made it easier to spread or even create COVID-19 falsehoods, making the work of public health officials harder.

This is part of our Coronavirus Update series in which Harvard specialists in epidemiology, infectious disease, economics, politics, and other disciplines offer insights into what the latest developments in the COVID-19 outbreak may bring.

When a disease outbreak grabs the public’s attention, formal recommendations from medical experts are often muffled by a barrage of half-baked advice, sketchy remedies, and misguided theories that circulate as anxious people rush to understand a new health risk.

The current crisis is no exception. The sudden onset of a new, highly contagious coronavirus has unleashed what U.N. Secretary-General António Guterres last week called a “pandemic of misinformation,” a phenomenon that has not gone unnoticed as nearly two-thirds of Americans said they have seen news and information about the disease that seemed completely made up, according to a recent Pew Research Center study.

What distinguishes the proliferation of bad information surrounding the current crisis, though, is social media. Kasisomayajula “Vish” Viswanath, Lee Kum Kee Professor of Health Communication at the Harvard T.H. Chan School of Public Health, said the popularity and ubiquity of the various platforms means the public is no longer merely passively consuming inaccuracies and falsehoods. It’s disseminating and even creating them, which is a “very different” dynamic than what took place during prior pandemics MERS and H1N1.

The sheer volume of COVID-19 misinformation and disinformation online is “crowding out” the accurate public health guidance, “making our work a bit more difficult,” he said.

Misinformation could be an honest mistake or the intentions are not to blatantly mislead people,” like advising others to eat garlic or gargle with salt water as protection against COVID-19, he said. Disinformation campaigns, usually propagated for political gain by state actors, party operatives, or activists, deliberately spread falsehoods or create fake content, like a video purporting to show the Chinese government executing residents in Wuhan with COVID-19 or “Plandemic,” a film claiming the pandemic is a ruse to coerce mass vaccinations, which most major social media platforms recently banned.

In order to be effective, especially during a crisis, public health communicators have to be seen as credible, transparent, and trustworthy. And there, officials are falling short, said Viswanath.

“People are hungry for information, hungry for certitude, and when there is a lack of consensus-oriented information and when everything is being contested in public, that creates confusion among people,” he said.

“When the president says disinfectants … or anti-malaria drugs are one way to treat COVID-19, and other people say, ‘No, that’s not the case,’ the public is hard-pressed to start wondering, ‘If the authorities cannot agree, cannot make up their minds, why should I trust anybody?’”

Mainstream media coverage has added to the problem, analysts say. At many major news outlets, reporters and editors with no medical or public health training were reassigned to cover the unfolding pandemic and are scrambling to get up to speed with complex scientific terminology, methodologies, and research, and then identify, as well as vet, a roster of credible sources. Because many are not yet knowledgeable enough to report critically and authoritatively on the science, they can sometimes lean too heavily on traditional journalism values like balance, novelty, and conflict. In doing so, they lift up outlier and inaccurate counterarguments and hypotheses, unnecessarily muddying the water.

“That’s a huge challenge,” said Ashish Jha, K.T. Li Professor of Global Health and Director of the Harvard Global Health Institute, during an April 24 talk about COVID-19 misinformation hosted by the Technology and Social Change Research Project at the Shorenstein Center for Media, Politics and Public Policy.

“People are hungry for information, hungry for certitude, and when there is a lack of consensus-oriented information and when everything is being contested in public, that creates confusion among people.”
— Kasisomayajula Viswanath

“What I have found is a remarkable degree of consensus among people who understand the science of this disease around what the fundamental issues are and then disagreements about trade-offs and policies,” said Jha, who is a frequent commentator on news programs. “The idea of covering the science in a two-sided way on areas where there really isn’t any disagreement has struck me as very, very odd, and it keeps coming up over and over again.”

Then there is the problem of political bias. This has been especially true at right-leaning media outlets, which have largely repeated news angles and viewpoints promoted by the White House and the president on the progress of the pandemic and the efficacy of the administration’s response, boosting unproven COVID-19 treatments and exaggerating the availability of testing and safety equipment and prospects for speedy vaccine development.

Tara Setmayer, a spring 2020 Resident Fellow at the Institute of Politics and former Republican Party communications director, said what’s coming from Fox News and other pro-Trump media goes well beyond misinformation. Whether downplaying the views of government experts on COVID-19’s lethality, blaming China or philanthropist Bill Gates for its spread, or cheering shutdown protests funded by Republican political groups, it’s all part of “an active disinformation campaign,” she said, aimed at deflecting the president’s responsibility as he wages a reelection campaign.

But turning around those who buy into false information is not as simple as piercing epistemic bubbles with facts, said Christopher Robichaud, senior lecturer in ethics and public policy at Harvard Kennedy School (HKS) who teaches the Gen Ed course “Ignorance, Lies, Hogwash and Humbug: The Value of Truth and Knowledge in Democracies.”

Over time, bubble dwellers can become cocooned in a media echo chamber that not only feeds faulty information to audiences, but anticipates criticisms in order to “prebut” potential counterarguments that audience members may encounter from outsiders, much the way cult leaders do.

“It’s not enough to introduce new pieces of evidence. You have to break through their strategies to diminish that counterevidence, and that’s a much harder thing to do than merely exposing people to different perspectives,” he said.

While Facebook, Twitter, and YouTube have all recently ramped up efforts to take down COVID-19 misinformation following public outcry, social media platforms “fall short” when it comes to curbing the flow, said Joan Donovan, who leads the Technology and Social Change Project at HKS.

Since the national shift to remote work, many social media firms are relying more heavily on artificial intelligence to patrol misinformation on their platforms, instead of human moderators, who tend to be more effective, said Donovan. So many users suddenly searching and posting about one specific topic can “signal jam search algorithms, which cannot tell the difference usually between truth and lies.”

These firms are reluctant to spark a regulatory backlash by policing their platforms too tightly and angering one or both political parties.

“So they are careful to take action on content that is deemed immediately harmful (like posts that say to drink chemicals), but are reticent to enforce moderation on calls for people to break the stay-at-home orders,” said Donovan.

Viswanath said public health officials cannot, and should not, chase down and debunk every bit of misinformation or conspiracy theory, lest the attention lends them some credence. The public needs to more closely scrutinize and be “much more skeptical” about what they’re reading and hearing, particularly online, and not try to keep up with the very latest COVID-19 research. “You don’t need to know everything,” he said.

Putting the onus entirely on the public, however, is “unfair and it won’t work,” said Viswanath. Institutions, like social media platforms, have to take more responsibility for what’s out there.

Public health organizations should be running effective communication surveillance of social media to monitor which rumors, ideas, and issues most worry the public, what is understood and misunderstood about various diseases and treatments, and what myths are circulating or being actively promoted in the community. And they need to have a strategy in place to counter what they’re picking up. “You cannot control this, but you can at least manage some of this,” Viswanath said.

Though some COVID-19 misinformation and conspiracy theories are outlandish or even dangerously inaccurate, Robichaud said it’s a mistake to dismiss those who believe them as people who don’t care about the truth.

Many cognitive biases get in the way of even the best truth-seeking strategies, so perhaps we could all benefit from a little more intellectual humility in this time of such great uncertainty, he said.

“Most of us are, at best, experts in a tiny, tiny area. But we don’t navigate the world as if that were true. We navigate the world as if we’re experts about a whole bunch of things that we’re not,” he said. “A little intellectual humility can go a long way. And I say that as a professor: It’s true of us, and it’s also true of the public at large.”