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Preparing For The Era of Uncertainty: Crisis Management

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Preparing For The Era of Uncertainty: Crisis Management

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Betzabeth

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Download as PDF, TXT or read online on Scribd

The Big Idea

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Series

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Crisis Management

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Preparing for the Era of
Uncertainty
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02 Article | A New Crisis Playbook for an Uncertain World

16 Charticle | What Covid-19 Taught Us About Doing Business During a Crisis

31 Q&A | Building a Culture That Can Withstand a Crisis

42 Article | 6 Types of Resilience Companies Need Today

51 Article | The Power of Community Partnerships in Times of Crisis

61 Article | Spotting a Modern Business Crisis — Before It Strikes

Reprint BG2104
No
Do

This document is authorized for educator review use only by Jesenia Verdezoto, Universidad Internacional del Ecuador (UIDE) until Nov 2023. Copying or posting is an infringement of
copyright. Permissions@[Link] or 617.783.7860
HBR / The Big Idea / A New Crisis Playbook for an Uncertain World

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A New Crisis Playbook for an
Uncertain World

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We’re entering a period of unprecedented instability. Is your business
prepared? by John E. Katsos and Jason Miklian
Published on [Link] / November 17, 2021 / Reprint H06OSG

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Marie Emmerman/Skizzomat
No

Today we stand at the precipice of not one but three converging and
potentially catastrophic long-term trends: climate change,
globalization, and growing inequality. On their own, each of these
makes the occasional crisis worse: We might see a more destructive
hurricane, a more widespread financial meltdown, or longer or more
violent civil unrest. Together, though, these trends magnify challenges.
Do

The Covid-19 pandemic, for example, was not just a health crisis but an
economic and political one as well.

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 2

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Welcome to the era of uncertainty, when constant crisis threatens every
business in every place on earth. We see it in supply shortages that are
no longer merely short-term inconveniences but disruptions that drag
on for years. It’s evident in power outages that last for a week or more,

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and in social unrest and protests over injustices that have persisted for
decades. Millions of managers are desperate to do the right thing in
these situations, but they have no clue just what that is or how to figure
it out. That’s because the most common ways companies have
responded to crises in the past are no longer applicable today.

yo
For the past two decades, for example, many have argued that the key to
weathering a storm is nimble, decisive action by a courageous leader.
Advocates of this approach assume that a crisis is a singular event —
typically a market-related or other financial upset — that happens,
op
requires a response, and is then followed by a return to business as
usual. Other executives and managers believe that when their
companies are fighting to survive, prioritizing ethical action is a luxury.
They do whatever it takes to protect themselves. A third approach is to
use avoidance mechanisms, such as promising but never delivering
tC

solutions, in hopes that the crisis will simply pass.

As upheavals become more common and complex, those strategies will

fail. Things will not simply go back to “normal” after pandemics,
wildfires, and socioeconomic turmoil. Firms that act selfishly are not
No

immune from struggling during a crisis; indeed, because they burn

every bridge at the first sign of trouble instead of building critical
relationships, they are likely to fare worse than their peers. And
claiming to be ready to tackle a challenge without following through
exposes companies to reputational damage; consider, for example, the
public dissatisfaction with organizations that pay lip service to
Do

supporting the Black Lives Matter movement but then do precious little
to make meaningful changes.

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 3

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Some firms, however, have learned and perfected ways to manage the
uncertainty that constant crisis brings. They do so in some of the most
volatile places on earth: conflict zones. To understand what works in
those conditions and why, we have conducted interviews with more

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than 300 business owners and managers in conflict-torn regions; held
discussions with leading practitioners and scholars; and researched
affected companies. In total, we studied hundreds of cases of businesses
thriving, scraping by, or crumbling as they faced a broad range of
violent and nonviolent political and social conflict from 1985 to today.

yo
What we found was that successful companies intentionally made more
contributions to their local communities than their peers did. In some
places they helped stop wars. In less-fraught settings, they reminded
people who disagreed with one another that they needn’t be perpetual
op
enemies. Whether the companies were small entrepreneurial ventures
or large multinationals, they had a blueprint for engaging with society
in a positive way.

Preparing for Crisis

Business leaders often recognize political, social, and environmental

changes as they happen. But in interview after interview, owners and
managers told us they regretted not taking those developments more
seriously. Why did we keep hearing the same laments? For one simple
No

reason: a mindset that left leaders reacting to crisis, rather than

preparing for it.

It’s tempting to worry that a proactive approach creates a signal-versus-

noise problem: How do you know you’re preparing for the right crisis?
With so much information to consider, it can feel like searching for a
Do

needle in a haystack. But we’ve learned that successful crisis

preparation is more like holding up a giant magnet to the haystack,
revealing the needles and extracting them before they can do damage.

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 4

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Once you realize which problems might impact your operating
environment, you can get ready for them.

Our playbook outlines the three most important lessons we took away

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from our fieldwork and illustrates them with real-world examples. In all
these cases, the red-flashing danger signals were always apparent to
anyone reading the local news or talking to local people. The companies
we studied — even the ones that failed to cope well with crisis — were
all trying to do what they thought was the right thing. But the ones that

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both survived and thrived had more than good intentions or strong
leadership. The secret to their success involved three strategies: paying
as much attention to the community as to the business, looking beyond
local authorities for solutions, and making principled political choices
even when they may be unpopular. These practices can help any
op
company trying to navigate the age of uncertainty. And we’ve found
empirically that they constitute the most profitable approach.

Partner with the community. You can’t do effective strategic risk

planning without understanding your sociopolitical context. Our
tC

research showed that companies that had little engagement with local
communities, viewing them merely as sources of consumers or raw
materials, were unlikely to outrun upheaval. When crisis hits, such
companies often cut local ties by closing factories or country offices,
laying off workers, or withdrawing in other cost-saving ways. Shutting
No

out the local community multiplies the risk that the project at hand, or
even the company itself, will fail.

Small corporate social responsibility (CSR) initiatives, such as

sponsoring a local sports team or funding scholarships, are wonderful,
but they don’t go far enough and aren’t likely to last. Instead, companies
Do

must build deeper ties with the broader community, because those
connections are integral to business survival during crises. This means

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 5

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developing relationships with local leaders within and beyond the
corporate world and working across societal dividing lines instead of
siloing within the “safest” segment of the community.

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A cautionary tale comes from the Lake Toba region of Sumatra,
Indonesia, where, around 2010, Starbucks started buying coffee beans
from local farmers and sharing the profits from the resulting (and
pricey) limited-edition product. Initially, community members we
interviewed thought the project was promising. The U.S.-based coffee

yo
chain worked with the farmers on enhancing production, building their
capacity, and improving the quality of their goods — the hallmarks of
creating shared value. But by 2018 it all ended.

When Starbucks came in, it introduced CAFE Practices (industry

op
standards for ethical sourcing) and paid a premium to its suppliers,
some of whom got involved in politics with the money. But the “land
mafia” — an extensive network of criminals and politicians with de
facto control over the local farmland — reportedly countered the new
threat to its power by destroying farms and threatening disappearances.
tC

As a result, we learned, some of Lake Toba’s most productive farmers

stopped growing coffee.

Farmers and distributors told us that they think those operations could
have been saved had Starbucks studied more about local politics,
No

learned how to defuse the mafia’s influence, and worked with the
growers. But that didn’t happen. And buyers for the company said they
instead turned their attention to more productive valleys, depriving the
local farmers of a promising livelihood and depriving customers of Lake
Toba’s most exceptional beans.
Do

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 6

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Marie Emmerman/Skizzomat

Compare that story to another — this one involving the National

Beverage Company (NBC) in the Palestinian Territories. In 1993, shortly

after Israel and the Palestine Liberation Organization signed the Oslo
Accords, CEO Zahi Khouri struck a deal with Coca-Cola to bottle and
bring the iconic soda to Palestinians. It was a gamble. Through its 40
years of operating in Israel, Coca-Cola was loathed by most people in the
No

Territories because it was seen as a collaborator with the occupation.

Khouri’s timing was also terrible. While he was trying to set up NBC, a
right-wing Israeli group assassinated Israel’s prime minister, triggering
a violent Palestinian rebellion. The peace accords were in tatters, and
each new attack jeopardized Khouri’s investment. But he pushed on
with opening his bottling facilities, even as people told him it was
Do

financial suicide.

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 7

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Today, after two intifadas, multiple failed peace negotiations, and
intractable economic troubles in Gaza and the West Bank, NBC boasts
more than $100 million in annual revenue and employs hundreds of
Palestinians, all while indirectly supporting the livelihoods of

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thousands more through supplier and contractor networks. NBC was
one of the only startups from that period that survived.

How did Khouri do it? He wasn’t harder-working or more ambitious

than leaders and managers at other companies in Palestine at the time.

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But he was smarter about engaging key community leaders and building
bridges. He leveraged his business experience with Western brands to
persuade Israeli companies and officials to let him ship supplies
through Israeli-controlled ports and border checkpoints. He then leaned
on the trust he’d built with Palestinian leaders to get their help
op
processing shipments and win their support for the operation, patiently
explaining how it would provide jobs and a popular consumer product.

Khouri took major financial and reputational risks to engage with both
communities. He could very well have been blacklisted by one or the
tC

other for “working with the enemy,” which could have meant losing
both the substantial sum he’d invested and the relationships he’d spent
years cultivating. But he didn’t shy away from those risks, and he was
transparent about his plans. Everyone knew he was partnering with
both sides (without favoring either one) to create something important.
No

Khouri’s example illustrates the first rule in the new crisis playbook:
Leaders must gain the trust of all the stakeholders in the communities
where they operate.

Work beyond the government. The second, related rule is this:

Companies must work not just with, but also beyond, government
agencies and office holders. In our research, the most common mistake

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 8

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we’ve seen is businesses partnering only with local appointed or elected
officials as if they are synonymous with community interests. When
public institutions are inadequate or are thwarting progress, that
approach is a recipe for disaster.

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A good example comes from Odisha, India, where the South Korean
steel manufacturer Posco tried in the early 2000s to launch an
ambitious $12 billion project that would have provided thousands of
jobs and $1 billion in development aid to local communities. The

yo
company’s agreement with the state included a plan for the government
to resettle 50,000 people living on the farmland where a new plant was
to be built. But officials reneged on their promise, instead moving the
farmers into barbed-wire tent cities and pocketing the resettlement
money. Those who’d been displaced appealed to Posco, but because the
op
company was unaware of the situation on the ground and wanted to do
everything “by the book,” it referred them back to the corrupt officials.
In 2010, with groundbreaking set to begin, Posco highlighted the
investment as a “success story” of working with the local community.
tC

Meanwhile, the farmers grew desperate. They joined forces with Maoist
insurgents waging war against the Indian government and attacked
Posco’s local offices, kidnapping visiting executives who came to
christen the site. After 10 painful years and $1 billion lost, Posco
abandoned and wrote off the project, claiming in 2015 that it failed as a
No

result of unforeseeable circumstances and “because the Indian

government has changed the law.” Officials kept the farmers in the tent
cities and sold the stolen land to domestic bidders.

Posco wanted to act ethically and comply with local laws, so it followed
the government’s lead. But it should have also engaged directly with the
Do

farmers and other members of the community to ensure better

outcomes.

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 9

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Dilmah Ceylon Tea used such a strategy to operate successfully during a
civil war in Sri Lanka that split the country along ethnic, religious,
regional, and political lines in the 1980s. While many companies closed
as a result of supply disruptions, protests and labor strikes, Dilmah

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avoided those problems because CEO Merrill Fernando was prepared for
the looming crisis. Fernando considered his firm’s health to be part and
parcel of his community’s, and he was constantly asking for local
reports from his employees. Many of Dilmah’s tea plantations lay in
remote areas, so Fernando had to trust his managers to do much of their

yo
work unsupervised. When he did interact with them, he was open about
the problems he saw, and his team members were equally candid about
issues they noticed.

Fernando wasn’t a fortune-teller. He didn’t know when or how the crisis

op
would erupt or how long it would last, but, thanks to his employees, he
did know that it was coming. As a result, he implemented forward-
looking strategies. He built cash reserves and supplies to maintain a
sufficient cushion for potential disruptions. He had frank discussions
about how the unfolding situation would impact the company and
tC

learned that even areas he assumed wouldn’t be affected probably

would be. This led Dilmah to embrace an expanded communication role
within the community and be perceived as an honest broker with a
stake in everyone’s survival.
No

Make principled political choices. Our third rule might be the most
surprising: Companies must not be afraid to take principled political
stands. Our research shows that firms tend to thrive when they make
consistent choices and communicate them clearly, even if a segment of
the population disagrees with them. Consider the case of the American
yogurt company Chobani in the highly polarized United States.
Do

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 10

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When Hamdi Ulukaya, a Turkish immigrant, founded Chobani in 2005,
he wanted to wear his politics on his sleeve by employing people who,
like him, had fled their home countries for safer lands. His company
funded school lunches for undernourished kids, because he’d gone

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hungry as a child. He built his factories in former industrial areas to
help revitalize communities most in need. And he hired lobbyists to
push for more-progressive policies nationwide. By 2016, employees
owned 10% of the company; by 2019, 30% of its workforce was made up
of former refugees.

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After President Donald Trump was elected, however, online trolls
attacked Chobani, claiming that Ulukaya wanted “to drown the United
States in Muslims” and calling for a national boycott of the company.
Ulukaya doubled down. He hired even more refugees and continued to
op
advocate for his adopted homeland to become a more welcoming and
open society. By the end of 2017 Chobani was America’s top-
selling Greek yogurt brand. Today the company is in talks to do an
initial public offering that would value it at over $10 billion, more than
$7 billion higher than a 2015 valuation.
tC

Businesses that think they can stay above the fray of contentious
political issues are woefully misguided. Customers often view inaction
as cowardice and think less of such firms, but standing on the sidelines
can also have grave consequences. When Meta (formerly Facebook)
No

entered Myanmar, for instance, it saw a unique chance to bring

everyone in the country onto its platform as Myanmar tried to transition
from authoritarianism to an open, democratic society.

But starting in 2014, the platform began to be used — often by

government and military officials — to promote conflict and ethnic
Do

cleansing against Rohingya Muslims. It took the company until 2018 to

finally remove inflammatory pages and the accounts of key instigators.

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 11

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Meanwhile, more than 25,000 people died and almost a million became
refugees. Meta’s global reputation was also badly tarnished. By trying to
ignore politics in order to maximize market share, the company sparked
widespread condemnation, burst the belief that it’s a positive actor for

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democracy and openness, and came to be viewed in Myanmar as little
more than a tool of the military.

Firms that take a stand early, clearly, and in line with their values (not
just spouting what customers or shareholders might want to hear) are

yo
usually able to grow new markets while limiting losses from
demographic groups that disagree with them. Coca-Cola has slammed
Republican attempts to restrict voting in Georgia, but that hasn’t
alienated all Republicans; even Donald Trump still drinks Diet Coke.
Chick-fil-A has come under fire for its CEO’s donations to an
op
organization that opposes extended civil rights protections for LGBTQ+
people, but when asked about the company during his presidential run,
Pete Buttigieg, the only openly gay candidate, remarked: “I do not
approve of their politics. I kind of approve of their chicken.” In conflict
and crisis contexts as far-ranging as the Philippines and Sierra Leone, as
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well as in Myanmar, companies willing to publicly make political

choices still earned significant business from customers who disagreed
with their positions, which allowed them to outperform their apolitical
peers.
No

A Social License to Operate

The three lessons that we’ve just discussed are interlocking; all help
explain why companies succeed or fail during times of crisis and
uncertainty. Zahi Khouri made NBC successful despite the Israeli-
Palestinian conflict by building bridges across community divides. But
Do

that was possible only because he extended his outreach beyond official
government entities and he took consistent political stances. Merrill
Fernando kept Dilmah going strong in Sri Lanka despite the civil war

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 12

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(and in 2004, the tsunami) because he did not rely solely on official
channels for information. But the company’s success also depended on
the trust Fernando had built with leaders of all ethnic communities in
the country.

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The rules we’ve offered can help managers and businesses understand
what they need to do to steer through crises. The how involves securing
a social license to operate. By that we mean that in addition to legal
licenses, a company needs the community’s approval of its operations.

yo
Communities grant this when they feel confident that a firm is
providing jobs and development opportunities and following certain
local customs. In exchange, the firm gets to make a profit without major
community objections.
op
Companies obtain a social license to operate by doing two things. First,
as we saw in Chobani’s case, they are clear about their purpose, goals,
and beliefs. Of course, communities are diverse, and a firm that is up-
front about what it stands for may put off some of the people it depends
on: certain customers, shareholders, suppliers, and employees. But the
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real risk in uncertain settings, especially hyperpolarized ones such as

the United States, isn’t alienating people because of honestly held
values — it’s alienating them because of vague or blank-slate values.
Those can be interpreted by anyone to mean anything, especially by
those who don’t like the company for other reasons.
No

The second part of obtaining the social license to operate is

communicating directly with community members. As we saw with
Starbucks, Posco, and Meta, working with official partners alone (federal
governments, municipalities, police, and so on) as if they are
synonymous with community interests can be a major mistake. Instead,
Do

managers and employees must openly communicate about their values

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 13

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with the community, not forgetting that their local employees are part
of their audience too.

Transitioning to this new crisis-readiness playbook is difficult work, but

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empirical evidence shows that it can lead to much more substantial
long-term profits than does the old way of doing business. The good
news is that the “hard path” benefits society too. We found that
companies employing the lessons we’ve outlined made a host of
positive contributions to their local communities. They have helped

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stop wars, built peace, and created value not just for themselves but for
all of us. As the world moves out of the Covid-19 crisis and deeper into
an era of unprecedented, accelerating instability, the best way for
companies to get ready is to deliver on their unique influence as citizens
in their own right.
op
John E. Katsos is an associate professor of business law, business
ethics, and social responsibility at the American University of
Sharjah, in the United Arab Emirates, and a research affiliate at
Queen’s University Belfast. As a scholar, he has published dozens of
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academic and media articles, as well as reports for boards and

international organizations. He has done fieldwork in Iraq, Lebanon,
Cyprus, Syria, Sri Lanka, and Hong Kong and is considered one of the
world’s leading researchers on business in crisis zones. As an
educator, Katsos teaches undergraduate, graduate, and executive
students in the United States, Europe, the Middle East, and Africa
how to manage more ethical and sustainable organizations for a
No

better world.
Do

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 14

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Jason Miklian is a senior researcher at the Centre for Development
and the Environment, at the University of Oslo. He has published
extensively on the topic of business and peace, including award-
winning articles based on fieldwork in Bangladesh, Colombia, India,

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and the Democratic Republic of Congo. Considered a top global
expert in the field of business, peacebuilding, and crisis, he sits on
numerous boards and high-level expert panels. Miklian has also
written for or been cited in an expert capacity by the New York
Times, the BBC, Foreign Policy, The Economist, and other news
organizations, and he is a coauthor (with Scott Carney) of The Vortex:
A True Story of History’s Deadliest Storm, an Unspeakable War, and

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Liberation (HarperCollins, forthcoming).
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No
Do

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What Covid-19 Taught Us
About Doing Business During
a Crisis

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Takeaways from a seven-city global survey.
by The Working Through Violence Research Team
Published on [Link] / November 17, 2021 / Reprint H06OSY

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Marie Emmerman/Skizzomat
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Over the past two years, the Covid-19 crisis has forced a fundamental
reordering of work and life around the world. But has the experience
helped organizations prepare for future crises? To answer this question,
we studied how relationships between businesses and society have
Do

changed during the pandemic in several global cities known for their
dynamic growth but also deep fragility.

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 16

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We surveyed 78,000 people via mobile phone in Bogotá and Medellín,
Colombia; Beirut, Lebanon; Cape Town, South Africa; Caracas,
Venezuela; San Pedro Sula, Honduras; and San Salvador, El Salvador. Of
this number, 16,500 respondents were business owners and managers.

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Because we tailored questions to local contexts and did not ask all
questions in all cases, the number of respondents for the questions
varies. (More on our survey methodology by our partner RIWI is here.)

We gleaned insights from both business leaders and citizens about the

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broad challenges they faced, and this article presents our most
important findings. They point to a way forward for any manager
working in a risky sociopolitical environment.

[ 1 ]
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Businesses can be seen as problem-solvers and
peacemakers during a crisis — or as harmful actors.

Covid-19 affected urban communities unevenly. Most cities had

neighborhoods that struggled through the pandemic’s downturn,

juxtaposed with pockets of affluence. In areas that deteriorated (as
perceived by respondents through metrics including public safety,
extortion, and corruption), citizens overwhelmingly said businesses
were part of the reason they were struggling. In areas that did well,
No

though, residents credited businesses with their shared success. This is

due in part to perceptions of how companies fared relative to their
communities.
Do

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 17

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No

These findings highlight an important correlation: Companies that were

more responsive to community well-being were also more successful in
working through challenging environments. During Covid-19, these
sorts of efforts included hiring disadvantaged workers, undertaking
direct charity and philanthropic work, assisting the unemployed,
helping to reduce local violence and conflict, and other concrete
Do

community-building measures. This kind of work pays off: Companies

that did it were nine times more likely to survive than those that didn’t.

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 18

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It’s encouraging that so many businesses helped their communities

during the pandemic. Our survey in Cape Town, in which about 15% of
respondents were business owners or managers, showed just how much
No

people relied on businesses to support them.

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 19

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[ 2 ]

The pandemic has exacerbated the threat of extortion

and violence against firms.
No

It is hard to overstate the precarity of many business environments

today. More than 55% of our respondents said their companies had
recently been threatened with violence or extortion, a finding that held
across firm sizes, sectors, and other differences. While the initial
Covid-19 wave in early 2020 led to a downtick in crime, especially in
Latin America as communities entered lockdowns, the longevity and
Do

depth of the crisis have triggered a whiplash effect. Extortion figures in

some cities are now at all-time highs, for example, with a rapid growth

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 20

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in actors exploiting the pandemic to enhance their digital extortion
capabilities and targets.

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No
Do

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No
Do

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 22

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Firms operating in such violent settings are part of the conflict
dynamics whether they take an active role, directly engage with the
state or criminal gangs, or subvert violence. Those that speak out
publicly against these crimes create new risks for themselves. For

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instance, 32% of owners and managers in Caracas, San Pedro Sula, and
San Salvador said that when they took such actions, it harmed their
businesses. These findings highlight how the symbiotic relationships
between communities, businesses, the state, and criminal groups can
perpetuate insecurity within firms and communities.

yo [ 3 ]

Generational shifts seem to be upending norms of

business-community engagement.
op
Our survey uncovered some positive — and some concerning — trends
about younger generations of business owners and managers in crisis
settings. On the positive side, this cohort sees corporations as more
deeply social and political than their older “stick to business”
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counterparts do. Moreover, citizens aged 18 to 35 were twice as likely as

their older peers to see foreign multinationals and large national firms
as positive forces in the community. For example, in Latin America,
those aged 18 to 24 were 70% more likely to engage in corporate social
responsibility efforts than those aged 35 to 64. Perhaps as a result, their
No

firms were also more than twice as likely to have experienced significant
growth since March 2020 than those of their older peers.

Younger generations also saw political and/or municipal support as

more important to business survival than their older counterparts did,
even though it was often nonexistent. However, perhaps because of this
Do

lack of aid, this cohort is also more likely to reach out to criminal
organizations. Younger managers and owners are three times more
likely to receive support from mafias and other unlawful groups than

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 23

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their older peers are, perhaps because they are 32% more likely to be
victims of crime and extortion and 25% less likely to get support from
municipal authorities.

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For example, in Cape Town, the Covid-19 crisis exacerbated problems of
endemic crime and institutional weakness. We found that 62% of those
aged 18 to 25 believe violence is at least sometimes justified, compared
with 36% of those aged 46 to 55. The younger cohort is also the most
likely to cope with social crisis by building relationships with violent

yo
actors and to see gangs as positive forces in their communities. Those
attitudes might be driven by a lack of faith in the state: This age group is
more likely than any other to say that government officials are the
primary instigators of violence and extortion.
op
These perspectives influence citizen perceptions of business-
community interactions more broadly. For example, 18-to-25-year-olds
in Cape Town are the least likely to believe that small businesses in their
communities make life better, and the least likely to turn to formal
institutions for help.
tC

In the short term, these beliefs may make resorting to violence more
easily justifiable and socially acceptable; in the longer term, they may
further alienate the age group from formal institutions and result in
gangs being the primary mechanisms of local governance. The Cape
No

Town data illustrates how a shock on top of an endemic crisis of

violence — in this case, the arrival of Covid-19 — pushes the system
even faster toward the breaking point.
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[ 4 ]

Smaller firms get the least assistance from

governments in crisis, but they are seen as key to

community success.

Businesses of all types have faced immense pressure from the Covid-19
pandemic. This pain included higher-than-normal closure rates,
difficulty keeping up with payments to suppliers and employees, and
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new (and changing) regulatory requirements. Governments around the

world passed initiatives to help firms meet these challenges, but aid was
delivered unevenly and often not to the firms that needed it most. For

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 25

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example, in the cities we surveyed, only 9% of businesses received
significant assistance, while a full 75% received none.

Strikingly, firm size mattered significantly when it came to government

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aid. The smallest companies were three times less likely to get it than
larger firms and less likely to get help from business associations and
municipal authorities.

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No
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The amount of government aid received corresponded to how well
companies were able to ride out the pandemic. For example, 70% of sole
proprietorships were negatively affected by the pandemic (including
loss of revenue, employment, supply chain issues, and similar) and 30%

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permanently closed from March 2020 to our survey period. Compare
that with the nearly 60% of firms employing more than 100 people that
saw stable or improving business: Only 12% of these organizations
closed.

yo
And yet small businesses are critical to community success, as evidence
from Lebanon suggests. The country has recently suffered a series of
consecutive, overlapping crises: a political revolution and protests in
2019, the Covid-19 pandemic, the August 2020 explosion at the Port of
Beirut, and now the current financial crisis in the country, which some
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have called the worst in the world since the 1800s. As a result, nearly
half of Beirut residents feel less safe than in 2019, while only 18% feel
safer, according to our results.

And yet, despite their vulnerability and comparative lack of resources,

two-thirds of respondents in Beirut said that small businesses were

making concrete efforts to help their communities, while nearly half felt
that large national and foreign firms were providing no support at all.
This suggests that small businesses seen as strong community
supporters have a comparative advantage going forward.
No
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No
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What These Results Mean for Managers

Sociopolitical challenges can be complex, systemic, and hard to

quantify — and extortion and violence against businesses in particular
are more pervasive than many assume. In such settings, companies may

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benefit from increasing their community embeddedness. Where firms
do not have the luxury of a peaceful, well-governed society, this might
mean dealing with illicit actors as a matter of necessity. However, such
strategies can create an economy dominated by criminal organizations,
further contributing to societal fragility and operational risk.

yo
More positively, our findings provide support for managers who take a
relational rather than a transactional approach to community
engagement. In any situation of rapid social reordering triggered by
crisis, firms that have already established and continue to build strong
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bonds with the local citizenry are more likely to succeed.

When managers invest in community embeddedness — hiring locally,

engaging in two-way information sharing, or consulting with area
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leaders on business decisions — they may not see immediate

operational or financial wins. But in the long term, they will build trust
and mutual respect, which can lead their communities to reciprocate,
supporting those companies and their ongoing success.
No

The research team on Working Through Violence is a

multidisciplinary group of scholars and practitioners studying how
businesses can support sustainable livelihoods and contribute to
safer cities. Team members are Benedicte Bull, Jason Miklian, Sarah
Cechvala, and Catalina Garcia of the University of Oslo; Brian Ganson
of the University of Stellenbosch Business School; Kristian Hoelscher
and Øystein H. Rolandsen of the Peace Research Institute Oslo;
Angelika Rettberg of Universidad de los Andes; Jay Joseph of the
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American University of Beirut; John Katsos of the American

University of Sharjah; Ben Miller of CDA Collaborative Learning
Projects; and RIWI.

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 30

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Building a Culture That Can
Withstand a Crisis

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How a company that works in conflict zones prepares for the unknown.
by John E. Katsos, Jason Miklian, and Patrick L. McClelland
Published on [Link] / November 17, 2021 / Reprint H06OT1

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A market in Somalia. CTG employs hundreds of staff in Somalia as field monitors who travel across the
country to food delivery sites to measure the impact of food programs. (Photo: Iain Statham)

In the new era of constant crises, a handful of CEOs have become

experts at preparing for and navigating them.
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Among these leaders is Alice Laugher, the head of Committed to Good

(CTG), a private company founded in Afghanistan and based in Dubai

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 31

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that provides specialist staffing and logistics to the humanitarian
community. When we met Laugher in 2014, for example, CTG had just
built out the medical and emergency services that the World Health
Organization used in West Africa to address the emerging Ebola

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outbreak. Since the company’s founding in 2006, its clients have
included most major humanitarian organizations; it now operates in 26
countries. In 2019 Laugher was awarded the prestigious Oslo Business
for Peace Award.

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No

Alice Laugher
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We recently asked Laugher what she and her team have learned about
uncertainty through working in crisis zones, and how this might help
managers new to the type of crisis leadership our tumultuous time
requires. The conversation occurred in September 2021, right after

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Kabul fell to the Taliban and the United States withdrew from
Afghanistan. Our meeting was punctuated by calls and messages from
the members of Laugher’s team on the ground there and local staff
members who continued their work of supporting humanitarian action.
We later used email exchanges to ask follow-up questions. This

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conversation has been edited for clarity.

You’ve worked in Afghanistan for more than a decade. How are you
handling the current uncertainty?
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We navigate a new normal every day. The situation, the rules, the
regulations, and the needs of the local population shift constantly. Can
you imagine running a business in a place where banks are not
operating? Or where corporate accounts are frozen? There is still active
fighting and hostility in parts of Afghanistan where we have staff. How
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do you deliver salaries and make payroll to thousands of employees

scattered across the country in such an environment? When the Taliban
took over, we were forced to reevaluate our core objectives,
achievements, and progress.
No

The United Nations has said it will “stay and deliver,” and so will CTG.
We’re able to do it only because we already have battle-tested systems in
place to make sure that payments get made to our employees on time.
While nobody foresaw how quickly the Taliban would reach Kabul, we
were perhaps able to react to the takeover better than other
international businesses because we are so locally connected through
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our staff. We prepared for eventualities that seemed obvious to us, yet so
many well-intentioned groups that simply weren’t paying attention to

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 33

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the situation on the ground were taken by surprise. And we had all
hands on deck to assist our partners with urgent evacuations because
we knew they would most likely need our help.

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These kinds of crises — and Afghanistan is only the most recent
example — test how strong our relationships with our staff, clients, and
partners really are. We ride the waves together. It’s as simple as that. We
share the same goal: to build humanitarian projects so that aid can get
to the people who need it no matter the danger or challenge involved in

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getting it there.

You’ve been recognized for your work in conflict zones,

particularly in how CTG has helped enhance peace in those
locations. What are the most challenging uncertainties your
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business faces in conflict zones?

Each country is radically different, but preparation goes a long way

everywhere we operate. You have to navigate local laws, some of which
may be unpublished. In one country, the tax law is from 1921, so it
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certainly cannot be found easily and downloaded from the internet!

And meeting tax obligations — something that is considered a back-
office task — has much more serious consequences in conflict zones. I
have witnessed these obligations being enforced by unlawful detentions
and on occasion by supposed officials armed with AK-47s.
No
Do

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One of CTG’s assignments is to train the Iraqi Police in explosive ordinance disposal and improvised
explosive device (IED) disposal. Above, a trainee attempts to disarm an IED.
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That’s why it’s so important to have local staff members as part of your
core team. They can help navigate the nuances and sensitivities of their
country, and they have a deep understanding of their environments, a
level of insight that can’t be matched by outsiders no matter how much
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research they do. CTG recognizes this, which is why we offer decent
work opportunities that can otherwise be hard to come by in low-
employment nations. We give people a sense of stability and financial
security and create mutual respect with local community leaders, who,
in turn, provide support when a crisis strikes. While conflict-affected
No

regions do need international support for both humanitarian and

development needs, you cannot arrive in a country as an outsider and
solve all its problems. That’s not the path to sustainable recovery.
Do

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How does CTG’s corporate culture help you and your employees
deal with the VUCA conditions you regularly face?

We have a culture that encourages people to go the extra mile because of

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the value of the work that we are enabling. We believe in what we are
helping to deliver.

In Gaza, for example, our senior manager, who is Palestinian, once

delivered food supplies to local and international staff while they were

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in their bunkers and moved people to safe locations while his own house
was being destroyed by a rocket attack. He went beyond the call of duty
amid his own crisis, which set the tone for his team. Many CTG
employees have done similar things in similar circumstances. It’s
actions like these that make our culture what it is, not statements on a
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website or in a press release.

Our people share a fundamental desire to make a difference and help

those in need. Everyone trusts that we will jointly make the right
decision for security and safety based on local knowledge and
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information, while still getting the job done. CTG is not a “look to the
CEO for the answer” culture. I don’t pretend to have all the answers.
Instead, we work together to find solutions to complex problems.

How do you shape this kind of culture?

We embed it in everything we do. Our company name is CTG:

Committed to Good. And we make that commitment because we must
— not for appearances but because it’s better for our staff, clients, the
communities we work in, and, frankly, our bottom line. If we didn’t act
in ways that affirmed these values, we wouldn’t have been in business
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for very long. Our employees, clients, and communities would have
abandoned us.

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 36

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One key strategy is to expose our headquarters staff to the realities of the
business. We don’t want to have an “ivory tower” feeling. All of our team
members go to the countries we work in, because everyone must see the
jobs their colleagues do in order to understand how we all fit together.

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Salwa Nassar, pictured above, is a female civil engineer with CTG in the Gaza Strip. She has worked in
Jordan, Egypt, the Kingdom of Saudi Arabia, and the U.S. but is one of only a few female civil engineers in
Palestine.

It doesn’t matter if you are in a back-office finance role —

understanding our on-the-ground work, who it benefits, and what our

partner organizations want is critical. It is simple things like seeing that
a cash machine withdrawal of $100 might require a B6 armored vehicle
and a costly private security detail. We all try to get to the field as much
as possible.
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How do you adapt quickly given the speed with which things
change?

We have several plans of action as part of our day-to-day business in

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each country. For example, our team in South Sudan was prepared for
some serious civil unrest and escalation at the end of August, when the
opposition parties called for mass protests against President Salva Kiir.
Thankfully, the street protests didn’t really happen. This is the ideal
scenario for CTG, of course, as there was neither a disruption to our

yo
business operations nor a threat to our staff’s safety.

Nonetheless, a lot of times our emergency plans do have to be used. So,

we must remain versatile at both the local and leadership levels, and our
culture and the trust we have in our team approach are essential.
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Without those, it would be impossible to prepare or to be particularly
resilient. Every time there is a new issue, we look for opportunity. Had
the Taliban not taken over in Afghanistan, for instance, the country still
would have had deep problems, and CTG would be there to help enable
solutions. That doesn’t change just because a new group comes to
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power. We adapt to fit the environment while very much keeping our
core principles and values a business priority.

For example, gender equality is a core value of CTG and is a major

passion of mine. We prioritize the employment of women in conflict-
No

affected countries and in humanitarian programming through our

Female First program. Will the roles we used to support for women in
Afghanistan still be safe? Will women want to continue to work in these
roles? I honestly don’t know yet, but they’ll still be our priority in
Afghanistan and elsewhere.
Do

Our relationships — with the local community, clients, and the wider
humanitarian aid sector — also help with adaptation. I have spent 18

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 38

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years working in emergency and conflict settings and have built many
relationships. Relationships are not just part of your broader network of
contacts; they take time, effort, and care. Ultimately, like all businesses,
you must know your sphere of influence to get done what is needed, but

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in fragile environments trust is very hard to come by — so if you’ve done
the work of building good relationships, it’s one less thing you must
worry about. Trust helps us play a role in making these places safer.

How has Covid-19 impacted CTG?

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In many ways, Covid-19 was just another crisis for us. Our ability to
travel was obviously the biggest challenge it posed. The pandemic made
it challenging to frequently and easily mobilize to the field from HQ,
due to long quarantine restrictions, suspended airline routes, and other
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regulations. We also lost a critical colleague to the virus — one of our
operations managers, who was on leave in the UK — and his passing hit
us very hard.

But honestly, our staff is prepared for the worst every time we deploy, so
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Covid-19 was a much bigger deal for people in countries that don’t
regularly face difficulties doing basic things. In the countries we work in
people die all the time; in that sense, Covid-19 was just another issue to
navigate, along with other medical diseases — such as cholera, malaria,
or Ebola — famine, drought, displacement, and terrorism. We have
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managed travel disruptions before in specific countries, and so we had

already built out a digital system to replace regular on-site meetings to
the point where most of our staff members are not office-based — they
are out in the field. Pandemic restrictions just meant that we had to use
those systems in more countries for an extended period, whereas in
previous crises we would use them for shorter periods in specific places
Do

that we couldn’t travel to.

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 39

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What advice do you have for leaders and organizations that aren’t
used to dealing with crisis?

In a crisis, you have to work together as a team: An organization with a

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hero culture will not survive. You have to rely on your staff — from the
most junior to the most senior — to step up. This is why it’s so important
to really know everyone before crisis hits. You want to know how far you
can push people and who you can rely upon. It’s wonderful when you
see new talent in the organization stepping forward to assist their

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colleagues to get a needed job done.

John E. Katsos is an associate professor of business law, business

ethics, and social responsibility at the American University of
Sharjah, in the United Arab Emirates, and a research affiliate at
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Queen’s University Belfast. As a scholar, he has published dozens of
academic and media articles, as well as reports for boards and
international organizations. He has done fieldwork in Iraq, Lebanon,
Cyprus, Syria, Sri Lanka, and Hong Kong and is considered one of the
world’s leading researchers on business in crisis zones. As an
educator, Katsos teaches undergraduate, graduate, and executive
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students in the United States, Europe, the Middle East, and Africa
how to manage more ethical and sustainable organizations for a
better world.

Jason Miklian is a senior researcher at the Centre for Development

and the Environment, at the University of Oslo. He has published
No

extensively on the topic of business and peace, including award-

winning articles based on fieldwork in Bangladesh, Colombia, India,
and the Democratic Republic of Congo. Considered a top global
expert in the field of business, peacebuilding, and crisis, he sits on
numerous boards and high-level expert panels. Miklian has also
written for or been cited in an expert capacity by the New York
Times, the BBC, Foreign Policy, The Economist, and other news
organizations, and he is a coauthor (with Scott Carney) of The Vortex:
A True Story of History’s Deadliest Storm, an Unspeakable War, and
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Liberation (HarperCollins, forthcoming).

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 40

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Patrick L. McClelland is associate professor of management at the
American University of Sharjah, where has served as the head of the
management department and director of graduate programs in the
School of Business Administration. His published work is an

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assessment of the impact that top managers have on their
organizations. As an educator, he teaches strategic management,
international business, and corporate governance to undergraduate,
graduate, and executive students in the United States, Europe, and
the Middle East. He has also served public and private organizations
in an advisory capacity in all three regions.

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No
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6 Types of Resilience
Companies Need Today

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Lessons in crisis management and agility from Unilever. by Paul Polman
and Andrew Winston
Published on [Link] / November 17, 2021 / Reprint H06OT3

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Marie Emmerman/Skizzomat
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When severe storms hit in tropical climates, buildings may fall, but
most palm trees survive. They bend but don’t break. They have
resilience. Can your organization say the same?

In today’s volatile and uncertain world, companies will face many

crises. Natural disasters destroy property and disrupt operations. A
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discovery of human rights abuses in a supply chain breaks consumer

trust earned over years. A hostile takeover bid shakes a business to the

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 42

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core. New competitors and technologies upend the industry. A global
pandemic changes everything.

One of us (Paul) ran the consumer products giant Unilever for a decade.

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With operations in 180 countries and brands that reach a couple billion
people each day, Paul and his executives had front-row seats for every
kind of crisis. They saw how our two big existential challenges, climate
change and inequality, along with multipliers like rising transparency
and pressure from stakeholders, create emergencies. These megatrends

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are accelerating, so the way companies respond can protect or destroy
value quickly.

By tracing decisions Unilever made to create both traditional forms of

resilience (financial flexibility, portfolio diversity, and organizational
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agility) and less-obvious forms (driven by purpose, trust, and
stakeholders) that changed the company more deeply, we aim to show
how leaders can best prepare for the world ahead.

The Building Blocks of Resilience

A company can’t thrive amid uncertainty without financial, portfolio,

and organizational resilience. These are table stakes today — and
essential preparation for sudden shocks and long-term crises.
No

Financial flexibility. When Paul arrived at Unilever in 2009, the

company was stagnant. Revenues were down, the stock had been flat for
over a decade, and investment in the future of the company was limited.
The business had very little financial resilience.

His team worked fast to begin the challenging work of getting the
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business moving again. This involved setting solid but achievable

growth goals and ramping up investment in people, brands, R&D, and
manufacturing to improve quality and stay competitive. Seven years

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 43

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later, revenue was up 33%, to $60 billion, and Unilever’s stock was
performing better than that of its peers and the European FTSE index.

That foundation is important, since today’s biggest challenges are

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creating real financial pressure. At one point, the effects of climate
change were costing Unilever more than $300 million per year. For
example, droughts in Brazil reduced reservoir capacity, triggering water
restrictions and preventing people from showering as frequently, which
caused shampoo sales to shrink by 15%. Only companies with already

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healthy balance sheets can weather such storms.

Portfolio diversity. At its most basic, having a diverse mix of products

smooths out the ups and downs in any one business. If a cold spring
reduces ice cream sales, for example, it’s good for soup to be in the
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portfolio. During Paul’s tenure, Unilever boosted its acquisition rate,
buying into new, future-fit categories and bringing many purpose-
driven brands into the mix.

As the world moves toward a net-zero economy, entire products and

value chains in transportation, energy, buildings, and much more will

vanish or change dramatically. Companies with a single set of products
in a category — for example, those that make only parts for internal
combustion engines — will not survive the coming transition. They will
need a more diverse product line to stay competitive.
No

Organizational agility. Paul’s early work at Unilever also included

structural changes to build organizational resilience, since the global
colossus was too decentralized into country and product fiefdoms. A
reorganization around major product categories and a big reduction in
management layers created a leaner, more agile, and more outward-
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looking company. Leaders could get faster feedback from markets about

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what was working and what needed more investment, and were able to
identify possible problems before they became crises.

All companies, but especially those with long supply chains, will face

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continued pressure to justify how they and their partners operate and to
understand the social, political, and economic dynamics their
businesses are involved in. Human rights abuses or corruption will not
stay hidden for long. Local disruptions can quickly have outsize
consequences if left unaddressed. An organization set up for better

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information flow, one that empowers on-the-ground employees to
notice and talk about looming problems, will be better prepared for (or
able to avoid) surprises.

New Strategies for Resilience

op
Financial, portfolio, and organizational strength are important, but the
larger opportunity is in making a company more broadly crisis-resistant
for the long term, because doing so serves multiple stakeholders — not
just shareholders.
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We argue that the strongest organizations today and in the future will
thrive by giving more than they take from the world. We call this kind of
company “net positive” because it seeks to improve the well-being of
everyone it touches through its operations, value chain, products,
No

services, and influence. (Our new book, Net Positive, lays out how to
build a business with that goal.)

Organizations that have a clear purpose, build strong relationships that

reinforce each other, and amass a reservoir of trust will have deeper
sources of strength when they need them most.
Do

Purpose. A company that knows its reason for being, and consistently
backs it up, is both tougher and more flexible during a crisis. At

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 45

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Unilever, a renewed focus on its history — going back to a commitment
to health and hygiene in the 1870s — aligned the company around a
clear mission: to make sustainable living commonplace. This was
reinforced by the Unilever Sustainable Living Plan (USLP), one of the

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earliest corporate sustainability plans in the world, which was
integrated into the organization’s strategic plan. It wasn’t a mere add-
on; it was (and still is) the strategy.

When the USLP launched, having a committed CEO wasn’t enough for it

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to succeed — Paul needed everyone on board. Unilever started with a
new, robust leadership-development program, a yearlong journey for
the top executives to discover their own purpose. There was a fair
amount of pushback and turnover, but even so, it was critical that a
company with a mission be full of the right people. Over time, Unilever
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rolled out purpose-finding programs to all employees; as of today, more
than 60,000 have gone through them.

The company also began to embed purpose in its brands. Finding a

reason for being at the product level is advanced work, but it’s been
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successful and rewarding. From Lifebuoy soap’s global handwashing

programs to Dove’s positive-body-image campaigns, dozens of Unilever
brands have connected in a genuine way to a larger need. Doing so has
been profitable, too: The purpose-driven brands have been growing
much faster than the rest of the business for years.
No

When employees know they’re not just selling soap but also helping to
solve a major health issue and saving lives, they are more driven. The
data is clear — people working at a company with a clear purpose are far
more engaged, and Gallup studies show that organizations with
engaged people are more productive and financially successful. Those
Do

employees will also help you fight through crises.

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 46

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Trust. The USLP has helped Unilever build trust with major
stakeholders because its aggressive goals (50-plus targets covering
operations, supply chain, products, impact on communities globally,
and more) are fully transparent and because the company talks openly

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about which ones it has struggled to meet.

And prompted by an infamous human and moral crisis that hit a

different industry, Unilever began to open up much more.

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In 2013, the Rana Plaza garment factory in Dhaka, Bangladesh,
collapsed, killing more than 1,100 workers who were making cheap
clothing for the West. It was a painful reminder of inequality and the
dangerous conditions in which many are forced to work.
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To ensure its own supply chain was safer, Unilever invited the
international NGO Oxfam to audit its Vietnamese vendors on issues like
living wages, working hours, and the right to collective bargaining —
and to publish the results publicly. Oxfam found nothing egregious but
identified some problems. For example, while Unilever was paying more
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than minimum wage in some places, the pay was still below what
experts considered a living wage. The company is now working its way
toward the goal of offering living wages throughout the value chain.

Transparency is a great tool to ensure consistency and engender trust.

Rather than rebelling against tough questions and pressure, business

leaders should embrace them and use them to build a stronger
organization.

Stakeholders. When Paul arrived, Unilever was facing protests for its
use of contingent labor at a Pakistani tea factory. Out of 800 workers,
Do

only 22 held full-time positions, leaving the vast majority without

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 47

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security or benefits. The IUF, the federation of agriculture and
hospitality worker unions organizing the campaign, called it “Casual-T.”

Paul worked with IUF head Ron Oswald and the workers themselves on

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a solution. After discussing several options and holding a vote, they
settled on a plan to create a few hundred full-time jobs: stable roles with
benefits for employees who would get the training and experience
they’d need to be productive over the long term.

yo
Net-positive companies build better connections with stakeholders
besides employees as well. They forge bonds with suppliers by helping
to grow and improve their businesses, rather than simply demanding
the lowest cost. (For example, Unilever’s “Partner to Win” program
shifted this relationship from pure transaction to innovation
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partnership.) They also help consumers lead more sustainable lives,
support business customers on their sustainability journey, and find
and work with investors who want long-term value creation. And, in
turn, communities with stronger ties to an organization support it
through good times and bad.
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Having a wide array of stakeholders, bound by purpose and all trusting

and working in partnership with the company, provides a diverse bank
of support. Remember those palm trees surviving big storms? Part of
their secret is a large, spread-out root system — not just one anchor but
No

many that can take a lot of pressure.

How the 6 Resilience Strategies Pay Off

When the biggest crises hit, all six forms of resilience help you move
quickly and effectively. The global pandemic was one such event. It
Do

created a tremendous test for organizations, drawing on both their

morals and their agility to deal with vast, sudden shifts in how the world
works and what products people need. Some companies made poor

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 48

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choices, but many did the right thing. Medtronic, for example, shared
proprietary designs for a portable ventilator to help the world ramp up
production. These actions build trust: People remember who is there for
them.

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Unilever, under current CEO Alan Jope, provided €500 million to
support suppliers and extend credit to customers. While the world shut
down and employers everywhere furloughed people, Unilever
guaranteed jobs for months, which was even extended to indirect

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suppliers like cleaning companies and security firms. It also shifted
people and operations to help produce medical equipment and redirect
supply chains that were overwhelmed. After a decade of being
committed to a purpose-driven model, Unilever could make big changes
quickly because it had the financial leeway, the support of employees,
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and the trust of suppliers and governments. The company was more
agile than its peers due to investing in strong roots.

The benefits of Unilever’s long-term, multistakeholder model were even

clearer during Paul’s greatest crisis as CEO. In 2017, Unilever faced a
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hostile takeover bid from Kraft Heinz and its coinvestors, private equity
firm 3G and Warren Buffett. Kraft’s business model at the time, which
was widely reported as being based mainly on slashing costs and
maximizing immediate profits, was fundamentally incompatible with
Unilever’s. But that disconnect wasn’t enough to stop the bid.
No

What scuttled the deal was the unusual level of support from the
company’s stakeholders. Many long-term investors made their
displeasure known; they felt an independent Unilever would build
longer-term value. Even more surprising was the public backing of
traditional antagonists: unions and NGOs like Greenpeace. By working
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in genuine partnership with these groups for years, Unilever had built a
foundation of trust, which it drew on to fend off Kraft Heinz.

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 49

t
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•••

No company can prepare for every outcome, but these six forms of
resilience, put together, can provide a serious buffer. They also allow

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organizations to work in larger coalitions on the biggest issues, such as
climate change and income inequality.

Net-positive businesses don’t just endure or bounce back from crises;

they also anticipate and prevent them.

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Paul Polman works to accelerate action by business to achieve the
UN Global Goals, which he helped develop. He was the CEO of
Unilever from 2009 to 2019 and has been described by the Financial
Times as “a stand out CEO of the past decade.”
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Andrew Winston is one of the world’s leading thinkers on
sustainable business strategy. He is an adviser and speaker on how to
build companies that profit by serving the world. His books include
Green to Gold, The Big Pivot, and Net Positive.
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@AndrewWinston
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Copyright © 2021 Harvard Business School Publishing. All rights reserved. 50

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The Power of Community
Partnerships in Times of
Crisis

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When building peace and building business go hand in hand.
by Jason Miklian, John E. Katsos, Angelika Rettberg,
and Jennifer Oetzel

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Published on [Link] / November 17, 2021 / Reprint H06OT6
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No

A man harvests coffee in Santuario municipality, Risaralda department, Colombia, on May 10, 2019.
(Photo: Raul Arboleda/AFP via Getty Images)

Rodrigo Lopez plucked the deep-red coffee cherries with his calloused
hand, dropping them a handful at a time into a burlap bag. Nestled
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nearly a mile above sea level, Lopez’s farm in the Andes mountains of
Colombia has the perfect climate and soil for coffee. Lavazza buys his

Copyright © 2021 Harvard Business School Publishing. All rights reserved. 51

t
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exceptional harvests for its finest espresso-quality Italian roasts; his
decent harvests become Folgers.

But the hard-to-access terrain is also the perfect climate for growing

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another addictive cash crop: coca, used to make cocaine. Lopez’s small
farm stands nearly equidistant between the cities of Cali and Medellín,
home to two of Latin America’s most notorious drug cartels. The thick
vegetation and lack of infrastructure like paved roads has made the area
an ideal hideout for insurgent groups and paramilitaries.

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In 2005, Lopez’s farm was ground zero for some of the western
hemisphere’s most brutal violence in 50 years. Lopez remembers those
times when he walks past the house of his former neighbors, who
vanished one night without a trace. The next day, leftist guerrillas from
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the Fuerzas Armadas Revolucionarias de Colombia (FARC) lived there.
The next month, rightist paramilitaries forced FARC out and attacked
Lopez’s family, taking their life savings at gunpoint and eating every
one of their chickens. Lopez didn’t dare complain. He stopped farming,
fearing he’d be killed for daring to fight for his land or forced to grow
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coca instead.

FARC retook the area a year later, but Lopez’s hope that things would
get better was short-lived. He heard gunshots in his field for hours
before insurgents yelled, “Comrade! Come out immediately, we need
No

you.” Lopez emerged in his pajamas, sure he was a dead man walking.
He was forced to chauffeur FARC soldiers around town in his old pickup
truck at gunpoint while they took potshots at police officers. That night,
Lopez ripped out the truck’s alternator and threw it into a ravine — he
and his truck would never be pawns of war again.
Do

At one time or another, tens of thousands of coffee farmers across

Colombia have faced a similar choice: keep farming coffee despite the

t
os
risk of violence, switch to coca and become direct participants in drug
production, or abandon their farms, like Lopez, and try to scrape by in
cities overflowing with conflict migrants. Eventually, though, they
found a fourth option, one that contains a lesson in how to run a

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business in the face of constant danger, uncertainty, and violence.

A Different Playbook for Crisis

Lopez, who we spoke with over several visits in late 2016 and early 2017,
and whose name has been changed for protection, is part of the

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Federación Nacional de Cafeteros de Colombia (FNC). Founded in 1927,
and popularly known as Juan Valdez, FNC is one of Colombia’s largest
and most important businesses. It is a public and private alliance of
more than 500,000 coffee producers, and historically it has prioritized
strong relationships with its farmers. But by 2008, amid the global
op
financial crisis, coffee prices were crashing, FNC was losing money
quarter after quarter, and long-simmering conflicts between the
government and insurgents ignited into all-out war.
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Luis Genaro Muñoz, the CEO of FNC, received a drumbeat of reports

that grew worse by the day: destroyed supply lines, extorted farmers,
and even executions of staff by guerrillas and paramilitaries. He cycled
through the standard fixes of increased protection and supply chain
management to no avail, and felt pressure to ride out the conflict by
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cutting costs and securing FNC’s assets.

But standard fixes — including pulling out of the worst-hit areas — were
the exact things that would endanger farmers like Lopez and FNC’s local
employees. They would also harm the company’s long-standing
business model, which depended on small-scale Colombian coffee
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producers; in fact, FNC’s product was marketed around them. Muñoz

realized that he needed a new model. With his company’s future on the
line, Muñoz launched a five-year plan and took three radical steps.

t
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First, he made the company the public face of peacebuilding in the
coffee regions. This meant putting FNC branding on peace initiatives
that had no guarantee of success and using the company’s political
capital to bring key actors to the negotiation table. If it worked, the

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government, rebels, and local community could all rebuild society
together with help from FNC. If it failed, he’d take the blame for a failed
peace and a new spiral of violence.

Second, Muñoz transformed FNC’s relationship with its farmers from

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one of buyer and occasional benefactor to one of partners in crisis.
Working with the United Nations, the Spanish Agency for International
Development Cooperation, and the NGO Humanismo y Democracia
(now called La Fundación Concordia y Libertad), Muñoz integrated
national and international development agencies into his company’s
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operations in hundreds of villages, building long-term projects aimed at
finding solutions that worked for all stakeholders, even FARC and the
paramilitaries.

These weren’t simplistic CSR-style initiatives like donating money or

supplies; they were in-depth consultations that treated the business, the
local community, and authorities as equal participants, with equal
stakes in their mutual success. Muñoz hired more than 1,000 people
across the country to distribute peacebuilding training modules at
village roundtables, train their neighbors and fellow citizens in
No

community engagement and dialogue, and facilitate farming and

sustainability best practices.
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A man carries a coffee bag at a farm in Santuario municipality, Risaralda department. (Photo: Raul
op
Arboleda/AFP via Getty Images)

Third, and most audacious of all, Muñoz invited both the leftist
guerrillas and the rightest paramilitaries to the village roundtables,
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knowing that without their buy-in, any cease-fire would be impossible.

By uniting everyone, and finding new ways to go forward together,
Muñoz aimed to build a profitable local peace in FNC’s operational
areas, one that would be stronger than what even the Colombian
government’s own initiatives could achieve.
No

The roundtables started tenuously; most local communities refused to

sign on out of skepticism or fear, and insecurity grew as insurgents and
paramilitaries warned the farmers against organizing. Muñoz persisted,
publicly committing to double the project’s length to a decade and
making a multiyear financial commitment to ensure that peacebuilding
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activities would be completed.

t
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Lopez and tens of thousands of brave coffee farmers responded to
Munoz’s call by doing something radical of their own: They banded
together under the project, hoping that there would be strength in
numbers. Some were murdered as a result, but that didn’t stop the rest.

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They used their collective strength to tackle the conflict head-on,
holding community dialogues and peacebuilding trainings under the
threat of death.

Eventually, FARC commanders and paramilitary members joined the

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initiative, seeing more to gain from a transition to peace than from yet
another cycle of war. Confident that FNC was a trusted broker that
wouldn’t vanish if violence spiked, farmers began to rebuild their
communities. “We realized that they had our backs,” Lopez said. As for
the community, “the project helped to establish friendships across party
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lines. We became closer to each other and started building peace
together. We started taking care of our public goods such as the roads
and schools.…Peace is not just something coming from the government
but from neighbors, too.”
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After one year, the security situation improved so much that Lopez and
thousands of his FNC brethren could safely return to their fields. The
project concluded shortly after the government of Colombia signed a
peace agreement with FARC in 2016. Today FNC has not only survived
in one of the world’s most dangerous crisis zones but has expanded its
No

coffee sales into 32 countries. More importantly, its farmers earn higher
prices and have greater yields all while living and working in a safer,
more secure, and more sustainable business environment.

Learning from FNC’s Success

The FNC case is a powerful example of a company’s ability to create

positive change in the communities where it operates. But what lessons
are applicable in other crisis settings? We offer three places to start.

t
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Move beyond traditional CSR and ESG activities. When communities
are dealing with a socioeconomic or political crisis, anything that looks
like lip service from a company won’t improve community relations.
Most mining and oil firms in Colombia, for example, combine

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traditional corporate social responsibility (CSR) or environmental,
social, and governance (ESG) activities with securitization strategies to
cope with violence. Despite the high financial cost, these initiatives
have largely failed to improve the companies’ standing with locals, as
they are perceived to help the company’s needs more than the

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community’s, exacerbating mistrust of the firms. The companies that,
like FNC, build lasting programs instead of one-offs are the ones that
succeed.

But there isn’t just one way to become crisis-proof through community
op
engagement. For example, Éxito, a Colombian retail company, stands at
the fore of reintegration efforts by helping former fighters return to
civilian life. Company operations serve as a training ground, and Éxito
has hired former members of both FARC and the paramilitaries. Éxito
works to reintegrate fighters and communities as a strategic goal to face
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crisis head-on, and profits have followed. The strategy both reinforced
the idea that Éxito works for the people, gaining it customer loyalty, and
protected the company from attacks by criminal organizations, allowing
it to expand into markets it could not enter before.
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While its exact activities differed from FNC’s approach, Éxito was
equally successful in building trust among key actors across Colombian
society. These examples show that marrying the community’s deepest
needs to a company’s deepest expertise leads to the strongest
partnerships.
Do

Educate managers. Managers are rarely trained to proactively address

the challenges that arise in crisis-affected communities, and as a result

t
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tend to adopt a business-as-usual mindset. But firms impact the places
where they operate whether they realize it or not, and local perceptions
matter. In worse-case scenarios, if locals believe a company is enabling
violence rather than trying to stop it, they can revoke its social license to

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operate — that is, its acceptance by the community. And once lost, that
license can take years or even decades to win back.

To get managers on board with being proactive, emphasize that

community welfare is a competitive advantage and engagement is a key

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part of their responsibilities. Our research finds that companies that
fully embed in a community typically gain legitimacy and reputational
advantages over competitors, especially in places where people have
been ignored or even victimized by their own government.
op
Further, research has shown that context-specific knowledge is critical
when addressing complex risks. This means it’s crucial for managers to
understand what motivates local actors, the real versus perceived
severity of potential crises, and on-the-ground rumblings about looming
threats.
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Invest in and nurture community trust. Trust-based relationships can

create deep social ties that embed the firm into the fabric of the
community. When that happens, it can give rise to a valuable, hard-to-
copy source of competitive advantage for businesses. Building localized
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knowledge is done first and foremost by listening to local actors without

preconceptions or assumptions about what they need. This includes
understanding their skills and competencies as well as the political and
social risks they face.

As FNC discovered, trust in relationships must be earned; it isn’t given

easily. For good reason, it took months of dedicated community effort to

get farmers to buy in to FNC’s engagement concept. In Colombia, as in

t
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many conflict and crisis settings, well-intentioned community projects
by outsiders come and go, filled with grand promises in the beginning
and usually failing to deliver in the end. Any firm wishing to build trust
and support in such settings must prove — not just claim — that it will

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be a committed partner in the community’s survival. FNC demonstrated
this by expanding the project’s timeline from five years to 10. Only once
trust — and business — was concretely established within this period
did FNC end its deep engagement efforts, transitioning to a lighter
approach.

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•••

From violent conflicts to social unrest, businesses are facing crises that
they can no longer ignore or avoid. Managers that recognize the value of
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contributing to local prosperity and peace will enjoy tangible returns to
the company’s bottom line, even if the gains might seem difficult to
immediately quantify. These decisions can also save livelihoods — and
sometimes even lives.
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Ten years after he threw his alternator into a ravine, Lopez tended to his
trees with the care of an artisan. His hard work had paid off: The
cherries he harvested would be in Italian espresso cups the next year.
That’s thanks in large part to the courage FNC’s Muñoz showed by
believing in a new community model, and the peace that farmers like
No

Lopez built together throughout the region.

Ultimately, the fortunes of businesses are inextricably tied to the

communities in which they operate. It’s a lesson both Rodrigo Lopez
and Luis Genaro Muñoz can attest to.
Do

Juan Pablo Medina Bickel contributed research and analysis to this

article.

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Liberation (HarperCollins, forthcoming).

John E. Katsos is an associate professor of business law, business

ethics, and social responsibility at the American University of
Sharjah, in the United Arab Emirates, and a research affiliate at
Queen’s University Belfast. As a scholar, he has published dozens of
op
academic and media articles, as well as reports for boards and
international organizations. He has done fieldwork in Iraq, Lebanon,
Cyprus, Syria, Sri Lanka, and Hong Kong and is considered one of the
world’s leading researchers on business in crisis zones. As an
educator, Katsos teaches undergraduate, graduate, and executive
students in the United States, Europe, the Middle East, and Africa
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how to manage more ethical and sustainable organizations for a

better world.

Angelika Rettberg is an associate professor in the political science

department at Universidad de los Andes (Bogotá, Colombia), where
she leads the research program on armed conflict and peacebuilding
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and the MA program on peacebuilding. Her research focuses on the

private sector as a political actor and specifically on business
behavior in the contexts of armed conflict and peacebuilding.

Jennifer Oetzel is a professor at the Kogod School of Business at

American University. Oetzel’s research and teaching focus on social,
economic, and environmental sustainability. Specifically, she looks
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at how companies can reduce business risk by promoting economic,

social, and environmental development as well as peacebuilding in
countries where they operate.

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Spotting a Modern Business
Crisis — Before It Strikes

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Eight perspectives on how societal challenges are evolving, and what that
means for companies. by Rakshitha Arni Ravishankar
Published on [Link] / November 17, 2021 / Reprint H06OTC

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op
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Top row, from left: Tima Bansal; Sarah A. Soule (photo: Elena Zhukova); Sarah Kovoor-Misra. Middle row:
Ruha Shadab (photo: Jamie Mullick); Chang Hoon Oh. Bottom row: Marianna Fotaki; Sinziana Dorobantu;
Maziar Minovi (photo: Richard Jopson).
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Companies are embedded in their social, economic, and political

context — not separate from it. That means they are directly connected
to the major crises that engulf society, from climate change to income
inequality and beyond.
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Further, research shows that younger generations are more likely than
others to see large firms as sociopolitical actors that can have a positive
impact on their communities.

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But since not every crisis affects all companies equally, it can be
challenging for organizations to identify which ones pose a threat to
their businesses, their employees, their customers, and their
communities. Today’s crises are also more complex and fast-moving
than those from decades past, Covid-19 being the most recent example.

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To better understand what companies are facing and how they can
successfully respond to the challenges ahead, Harvard Business Review
posed four questions to scholars and practitioners.
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Here’s an edited collection of their responses.

[ 1 ]

How have crises that affect businesses changed in the

last 50 years?

Tima Bansal, professor of strategy at Ivey

Business School and founder of the Network
for Business Sustainability: The 1997 Asian
No

financial crisis was a real awakening. A

seemingly remote event — the collapse of the
Thai baht — destabilized currencies and stock
markets across Asia and quickly disrupted U.S.
stock exchanges too, signaling a new and deep
interdependence among financial markets worldwide.
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In the decades since, crises have only become more global, more
frequent, and more volatile, and this is likely to continue. Covid-19 is

t
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the most recent example: A public health crisis in a specific locality —
Wuhan, China — became a global disaster. Why? Because products,
financial assets, people, and information flow quickly and cheaply
today. Transportation and communication networks have created a

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complex, interconnected world. What’s more, we’re now seeing the
limits of industrial growth. Companies are extracting natural resources
faster than the Earth can regenerate them, and ecosystems are being
stretched to the breaking point. Given our finite resources, the business
environment is increasingly dynamic, chaotic, and unpredictable and

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small events are amplified.

Maziar Minovi, CEO of Eurasia Group: For

most of the past half century, the West enjoyed
relative peace and prosperity. The free
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movement of ideas, information, money,
goods, services, and people lifted billions out
of poverty. As a result, large corporations in
rich countries were populated with two
generations of risk managers who didn’t have
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to think much about politics.

That age of complacency is over. We’re in a world where the soon-to-be-

largest economy, China, is dominated by a small group of people who
make decisions in secret and have the power to direct government
No

policy toward their political survival rather than economic dynamism.

Meanwhile, rising concerns about inequality have given rise to populist
fury and unpredictable politics in many parts of the West. Our global
financial interconnectedness magnifies these dynamics. It’s why
China’s decision to tighten control of its technology or financial sector
matters to businesses in Singapore, Austin, and London, and a vote
Do

from a single U.S. senator on a bill today can upend strategic plans in
Frankfurt and Tokyo tomorrow.

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Marianna Fotaki, professor of business ethics
at Warwick Business School: Globalization
has created unprecedented competition for
labor and opportunities, leading to exponential

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growth for transnational businesses. At the
local level, this ease of doing business across
borders has allowed some companies to
acquire disproportionate power to influence
local politics and governance. When that happens, they assume a

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dominant role in making policy decisions that affect people in a society
— which can then undermine democracy and public good in the region.
Ironically, the lack of strong legislative institutions, which makes all
this possible, can be a cause of instability in society, affecting
businesses in turn.
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At the global level, the absence of strong economic regulatory
institutions to ensure equitable and fair business practices means that
corporations have no limits on their size and influence. The result is
industries turning into monopolies or oligopolies, and giant companies
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preventing newer ones from entering the market. When left unchecked,
these anticompetitive behaviors can exacerbate inequalities between
rich and less developed countries, creating global disparities.

Sinziana Dorobantu, associate professor at

New York University’s Stern School of

Business: Modern technologies such as more-
efficient supply chain operations, the internet,
and social media have not only increased the
pace of change in business but have also drawn
more attention to its impact on society. Fifty
Do

years ago, oversight of companies was largely

the domain of regulatory agencies and specialized consumer groups.

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What the public knew was largely defined by what businesses were
required to disclose. Today, however, public perception of businesses is
affected by a diverse range of stakeholders — consumers, activists, local
or national governments, nongovernmental organizations,

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international agencies, and religious, cultural, or scientific groups,
among others. My own research shows that when businesses operate in
a highly transparent society with new media technologies and a free
press, even decentralized, uncoordinated events can easily escalate into
a significant crisis for the firm.

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How can companies identify the crises they’ll likely

face going forward?
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Chang Hoon Oh, William and Judy Docking
Professor of Strategy at the University of
Kansas School of Business: There are a few
ways businesses can identify risks. One,
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externalize expertise through insurance and

consulting companies that identify
sociopolitical or climate risks. Two, hire the
right talent for risk assessment. Three, rely on
government agencies, media, industry-specific institutions, or business
No

leaders’ own experience of risk perception. A fail-safe approach is to use

all three mechanisms in tandem, if possible.

That said, risk assessment is only the first step. Any uncertainty or risk
can become a crisis if the company is not prepared for it. Take the 2011
Fukushima Daiichi nuclear disaster in Japan, an event my colleague
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Jennifer Oetzel and I have been studying. While it was triggered by

natural events — an earthquake and a tsunami — many argue that the

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spillover of radioactive elements from the nuclear plant happened due
to an error in foresight.

Sarah A. Soule, senior associate dean and

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Morgride Professor of Organizational
Behavior at the Stanford Graduate School of
Business: The rise of social media has made it
easier to identify crises. Smart leaders are
paying attention to what’s trending to

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anticipate how these issues impact their
businesses. For example, some businesses were
carefully tracking the emergence of the Covid-19 virus in China in
December 2019 through social media and other sources, even as
governments seemingly failed to do so. Another example is the Black
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Lives Matter movement in the U.S., which, especially after the killing of
George Floyd, has forced companies to reevaluate their responsibility to
stakeholders and change their strategies both externally (such as
marketing efforts) and internally (such as increased focus on diversity,
inclusion, and equity).
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[ 3 ]

To whom are businesses responsible when crises

occur?
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Bansal: Limiting the responsibility of companies to their shareholders

or stakeholders is not enough. I believe that companies are responsible
to all people in society — not just today but for generations to come.
That’s because, in most cases, crises simmer over years; their impact
may only be noticeable in the future. And it can be hard to know who
Do

caused the crisis — there may be many perpetrators. For example,

microplastics are being detected in the placentas of pregnant women
after decades of plastics accumulating on land and in water. The effects

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of carbon emissions are only being discussed now, despite their roots
dating back to the Industrial Revolution. Instead of just focusing on the
exact cause of a crisis, it’s important for businesses to recognize the
broader ways in which they can support communities.

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When Hurricane Katrina ravaged the Gulf Coast of the U.S. in 2005,
Walmart was among the first organizations to provide disaster relief.
Walmart employees brought food and water and offered shelter to
thousands of people in New Orleans who were affected. Lee Scott, the

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CEO at the time, seems to have made the decision not because it
mattered to stakeholders but because Walmart could help.

Fotaki: Businesses do not exist in a vacuum. Rather, they grow out of

societies, even if they ultimately turn into transnational corporations.
op
And business outcomes, both positive (such as increased employment)
and negative (pollution) affect everyone, whether they participate in the
business activity or not. The global climate crisis, for instance, is a
consequence of doing business that affects everyone. Companies helped
create it and so have a responsibility to help fix it.
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Dorobantu: During crises, businesses need to focus on their purpose,

which should be intrinsically linked to the customers they serve, the
employees and suppliers that make that service possible, and the
communities and public authorities that give consent to operate. “Why
No

do we exist?” may seem like a very big question, but it allows businesses
to direct financial and operational resources to serve their purpose and
make a positive impact on society.

Take the example of global mining companies during the early months
of the Covid-19 pandemic. The purpose of mining firms is to extract raw
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materials that are critical for the manufacturing of medical devices,

electrical and electronic equipment, and automobile parts, among other

t
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things. To do this, mining companies need to not only focus on the
operational and financial aspects of their business but also take care of
the people and communities in which they operate — especially when
they are cut off from other distribution channels during a crisis. Doing

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so is a win-win for everyone: Local governments can rely on mining
companies to deliver essential supplies like food and medicines to the
people in the area of operation, communities’ essential needs are
fulfilled, and mining companies can continue their business operations.

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[ 4 ]

How has the Covid-19 pandemic changed the way

leaders will handle crises going forward?

Dr. Ruha Shadab, founder of LedBy

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Foundation: We’ve seen that we need to be
wedded to the cause, not the problem. Any
crisis is an opportunity to reevaluate your
mission, rethink what drives your
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organization, and become flexible and agile to

achieve that mission. When you do, it helps
you adapt more quickly to change. I’ve seen
this with my own social venture.
No

When the pandemic started, our hybrid professional-development

training — 80% virtual, 20% in-person — had to go 100% virtual. We
had to revisit the problem we were solving (training more women to be
workforce-ready at a time when female unemployment in service-sector
jobs was rising) and reiterate our mission (it was more important than
ever for us to help women become more employable). That pushed us to
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strategize a new approach to virtual training, such as creating new

course materials, shorter workshops, and more offline homework.

t
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The other lesson is empathy. Everything is really about people —
especially those who work with (and for) you. Recognize that your
employees, team members, and colleagues are not just “resources” but
humans with lives beyond their jobs. They are your first set of allies.

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Building this empathy requires trust and transparency, and that starts
with being honest about the challenges, risks, and opportunities for the
people supporting your business in times of crisis. When you do this, it’s
likely to create an enabling and rewarding environment for everyone.

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Sarah Kovoor-Misra, professor at CU Denver
Business School: The pandemic has taught us
that an individualistic, self-interested
approach is not effective in a crisis. For
instance, essential workers and their
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organizations have had to collaborate and
support each other through the crisis to save
lives and meet needs, demonstrating that
collective and altruistic efforts matter. Leaders need to develop cultures
that support collaboration and positive behaviors in the workplace and
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reward these behaviors. In addition, they must pay greater attention to

their employees’ mental health and protect them from burnout — both
during and after a crisis. The last year and a half has shown us that
crises have psychological and social consequences, and that we’re all
more than the work we do. Paying attention to their employees’ needs
No

outside their job roles and tasks, such as by providing employee

assistance programs, childcare benefits, caregiving support, inclusive
leave policies, and flexible work schedules, is a positive step in that
direction.

Minovi: The pandemic has demonstrated just how interconnected

today’s crises are. Policy makers, investors, and business decision-

makers must spot the many connections among first- and second-order

t
os
emergencies and think carefully about both their local and global
implications. Leaders must become perceptive and game out many
potential scenarios for unexpected shocks. They must stay active in the
global forums that will set the rules and standards to govern business in

rP
the future. Finally, corporations need to move away from virtue-
signaling and create strategies to address possible triggers for crises.

Oh: It remains to be seen whether leaders will remember the early

lessons from the pandemic — something that doesn’t always happen

yo
after a crisis. For example, since last year, there has been a shortage of
semiconductor chips in the automobile industry due to restricted
supply chains. The industry experienced the same kind of shortage
following the Fukushima disaster. In the aftermath of that crisis,
companies developed alternative and reliable supply chain partners.
op
But in the absence of predictable threats, they later forgot the lessons
they learned — leaving them unprepared in 2020.

This example highlights one of the key lessons for leaders: To improve
business adaptability and resilience, prepare for crises before they
tC

strike. Doing that requires an ongoing strategy of proactive thinking and

foresight — whether there is a crisis on the horizon or not.

Rakshitha Arni Ravishankar is an associate editor at Ascend.

RR
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