To understand how leaders make decisions in Covid-19, the researchers surveyed chief Executive in more than 500 Chinese companies in February and March of 2020. They want to know where the bias of these leaders were brought to the table and how it affects their decision-making through the Covid-19. They identified three different bias:1)optimism and pessimism; 2)the cost of the Respondent; and 3)short-term and long-term thinking. In this article, they explain the management implications and provide a way the leaders fight against each.
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The Covid-19 pandemic required the leaders make a decision, under considerable pressure. Many a CEO as”Chief crisis officer”as they work to ensure their company’s survival and management of the physical, mental, and social well-being of employees.
Because there is no roadmap for the kind of crisis Covid-19, the chief Executive officer has a management to a large extent rely on their existing skills and character traits. We want to understand its decision-making biases, they were brought to the table and how these have affected their decision-making.
Because China in the next few weeks the rest of the world in the experience Covid-19th, we surveyed CEOs of more than 500 Chinese companies in February and March of 2020. We focus on three areas: the CEO’s background and firm characteristics, and how the CEO responded Covid-19 the spread, as well as their expectations for the post-pandemic future. Our study reveals three against prejudice. In what following, we explain the management of affect and provide ways leaders against each.
1. “The glass is half full”and”glass is half empty.”
Optimist(52%)and pessimists(48%)is almost the same between the representatives of the CEOs in our study.
Optimist main founders and business owners. The founder of the strong ties to their personal network to keep them confident that they can maintain and exploit business opportunities in the recession. For example, the founding CEO of the leadership of the building-the lighting design company to say, thank you. “Our brand, long-term customer relationships and mutual trust, we get our customer’s commitment to keep business project. …We stand for quality, this is not the first time that our growth depends on us how to behave in a tough business environment.” Most pessimists had in the B2C market. Shape of consumer sentiment about economic uncertainty in China, their main concern is a decline in the market demand and precautionary savings.
Each feature has a management impact. Optimistic CEO tends to develop a positive psychological state, such as confidence, hope, and resilience in themselves and their team. However positive may be counterproductive, if the leaders neglect the severity of the crisis and lose touch with the concerns of employees, customers or business partners.
For them, too pessimistic, Ceo of risk create a climate of fear and anxiety, which may lead to employee disengagement. Leaders need to be realistic about the challenges facing their company, while also motivating employees to meet them.
As a check against your natural bias—whether you are an optimist or a pessimist—we recommend using an open, approachable leadership style. This will help you get feedback on your style to convey the right information to your team.
2. Cost with people.
Crisis prompt companies to cut costs, hoard cash, and to tighten control. The logic is simple: when the market and the future revenue is difficult to forecast, and margin-expansion strategy is a safe bet. However, these measures have a direct impact on employee well-being, motivation, job satisfaction and job security.
Feminine and versatile, chief Executive with transferable skills and capacity across industry and functional areas are more aware of this pandemic, the worsening of the impact on employment conditions and attitude. They actively attempt to resolve the employee’s dissatisfaction low commitment. Female CEO of China’s leading online mutual insurance company stressed that “People and innovation is the key for our business. These success factors do not change during the Covid-19 will not change the future. I have no hesitation in investing in our employees training and development…and the recruitment of skilled managers from other companies. These people will help us in the growth of a pandemic to an end.”
Finally, the CEO is not focused on costs or human costs. Both negative returns and lose the motivation of the employees could cause your company to fail. Don’t ask,”How can we reduce costs?” Ask yourself,”How can we continue the competition?” By doing so, you can avoid the vicious cycle has a negative impact on productivity, creativity and innovation.
3. Short-term and long-term thinking.
A knee-jerk reaction is a major risk during the crisis. CEOs who are overly focused on the short term possible action may harm the future of the business. Those who are too focused on the long-term may not be able to solve short-term operational needs necessary for survival.
Most of the CEOs in our survey biased in favor of long-term thinking, especially in the B2B market. As the CEO of China’s largest office real estate management company explained that this direction is derived from the B2B market”high entry barriers”, which forces leaders”, to deal with our business partners in the nature, in their best interests.” There are exceptions: the chief Executive officer in B2C markets, who can understand the occupied short-term austerity measures as consumer behavior rapidly changes. However, even if some in the group are looking forward to the new business model. For example, the establishment of the chief Executive, the Chinese consumer products company, described her organization is seeking to strengthen its market position, by connecting online services with offline to its customers after the epidemic.
The CEO with a short bias need to be mindful of their activities the potential long-term impact on the company’s ability, brands, and stakeholders. Chief Executive officer with a tendency to, and should have a long-term perspective the risk of insufficient epidemiological impact profitability. Having an opponent who can be used as a voice of reason can help these leaders avoid unrealistic goals and maintain short term accountability.
During the crisis, leaders need to remain objective and reasonable. This is often easier said than done, especially when you make important decisions with limited time and resources. To know what decision-making biases you bring to the table—and how to deal with them will help you better manage future crises.
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