Year Two of the coronavirus pandemic sees uneven and fragile economic recovery in the United States and broader global community. While Chief Executive Magazine recently reported US CEO confidence in future business conditions at a two-year high, leaders in both profit and mission-based organizations continue to face daunting fiscal and operational challenges.
In this Reset 2021 article I will address three priority areas that leaders and the boards that oversee them are talking about now and that require ongoing “protect and correct” attention and action.
The three priority areas are Organizational Reputation, Human Capital and Cybersecurity.
Often discussed within the framework of Environmental, Social and Governance (ESG) issues and regulation, these areas are discrete but interlinking business dimensions that need to be high on the senior executive team’s 2021 “protect and correct” agenda. Why? Because the prolonged global socio-economic dislocations wrought by the Covid-19 pandemic, combined with a low trust stakeholder ecosystem, and disruptive, next generation digital technologies all contribute to heightened business and management risk.
LEADER PRIORITY: ORGANIZATIONAL REPUTATION
Warren Buffett famously said, “It takes 20 years to build a reputation and five minutes to ruin it.” Add to this timeless observation the fact that leaders today must navigate in what has become a very low trust ecosystem.
The credibility of societal leaders declined overall in the past year, according to the Edelman Trust Barometer 2021 Global Report, with CEO credibility at a middling 48 percent trust level. Additionally, the “infodemic” of misinformation and false narratives that continues to proliferate across news, social media and workplace platforms requires extra vigilance and quick action to reduce reputational damage. Heightened stakeholder expectations around social responsibility issues also contribute to reputational value and risk.
By way of recent news headline examples, consider the cases of Dominion Voting Systems and Smartmatic, both companies on the receiving end of infodemic damage. McKinsey & Company and Apollo Global Management are lessons in how “the company you keep” scandals can prove costly to organizational reputation and the bottom line.
Protect and Correct Action Checklist
- Leader behavior that exemplifies high personal and professional standards, conduct and accountability.
- Prepared crisis communication plans for high-risk scenarios, including specific staffing and messaging assignments.
- Clear employee policies about appropriate use of workplace communication channels.
- Rigorous vetting of potential business relationships – clients, vendors, strategic partners, investors – to insure alignment with organizational values as well as regulatory compliance.
- Rapid resolution of issues that involve public welfare or misperceptions.
- Legal action as per expert opinion and counsel.
LEADER PRIORITY: HUMAN CAPITAL
The recruitment, development and retention of top talent is a post-Covid priority of both global and United States CEOs, as reflected in The Conference Board C-Suite Challenge 2021 Report. Senior management needs to revisit their organization’s talent strategy now in light not just of the pandemic but also because of shifts produced by digitization and changing workforce demographics and skillsets.
With four generations in the labor force (i.e., Boomers, Generation X, Millennials (Generation Y) and Generation Z), managing for an inclusive, high performance work environment requires a fresh look at the organization’s culture and at the evolving leadership skills and personal qualities needed to execute in a transformed, post-pandemic world.
Board oversight of talent strategy has also increased in importance, with management needing to translate its human capital metrics and data into meaningful, high-level plans to support its business strategy.
Protect and Correct Action Checklist
- Revise financial allocations for office space and technology investments due to teleworking and digital operations.
- Initiate actions associated with Diversity, Equity, Accessibility and Inclusion (DEAI) best and corrective actions to retain and attract quality talent, as well as other key stakeholders.
- Ensure employee welfare against ongoing Covid-related threats, such as workplace safety and mental health stressors.
- Revisit the next-generation talent pipeline with an eye to upskilling, succession planning and labor market competition.
- Take stock of current organizational culture traits and how they are helping or hindering the enterprise’s performance since the pandemic started. How might they help or hinder organizational success post-pandemic?
LEADER PRIORITY: CYBERSECURITY
Disruptions from cyberattacks now rank consistently among high-level risks facing business and government leadership. According to a World Economic Forum report, next-generation technology could overwhelm the global cybersecurity community by 2025.
Data breaches and ransomware are increasingly threatening employee, customer and public privacy and security, as well as organizational reputation and profits. One evidence point: cybercrime reports to the Federal Bureau of Investigation (FBI) more than quadrupled in 2020. Last year’s massive Solar Winds data breach and the attempted poisoning of a Florida city’s water supply by a hacker in early 2021 are only two examples of the diverse types of systemic threats that leaders must become better prepared to counter.
Protect and Correct Action Checklist
- Provide ongoing employee training and awareness campaigns to protect against email compromise, data theft, equipment damage and service delivery disruption.
- Incorporate cybersecurity practices into the organization’s values and culture.
- Increase investments in cybersecurity that protect critical infrastructure and data against emerging systemic threats.
- Seek innovative partners for solutions to what is a global cybersecurity problem with cross-border complexity and ramifications.
SUMMARY
Reset 2021 holds both anticipation of a post-Covid economic boom and many uncertainties. This year’s unfolding is sure to impact organizations and their leaders unevenly and in different ways, which is all the more reason for senior management to adopt a “protect and correct” stance that promotes financial resiliency and innovation. It is incumbent on top executives – and board directors who oversee them – to insure robust risk management policies and systems are in place and current for all three priority areas: organizational reputation, human capital and cybersecurity. ♦♦♦
Copyright © Susan Battley 2021. All rights reserved.