Tom Graham, a Consultant within Berwick Partners’ Procurement & Supply Chain practice has been speaking with Chief Procurement Officers across the globe, from a range of different sectors to discuss their leadership concerns during this next phase of the crisis. The discussions focused on the complication’s leaders may face as we enter the next stage of the crisis in addition to the part office-based, part-remote way of working at some stage in the future. Together, they discussed the concerns leaders have with re-engaging their teams, how management styles must change and the mental fall-out after a period of isolation, health and economical stress.
A remote/office combination
When I began to write this research piece, the focus had been on the partial return to the office. Yet the UK government’s recent announcement, demonstrates how difficult it is for leaders to plan, manage, and motivate their teams.
Over the last six months, the word ‘unprecedented’ has often been used. From the discussions I’ve had it now looks increasingly likely that the long-term effects on leadership will also be unprecedented in scale.
The importance of leadership
As the crisis roles on, the potential for team disengagement intensifies. CPO’s are aware of how imperative it is that they are able quickly re-engage with their teams, recognising that a lack of engagement could have major implications on the success of their future strategies. A recent report from McKinsey on, ‘COVID-19 and the employee experience. How leaders seize the moment’ stated;
“Organizational responses are having a tangible impact on employees. Compared with respondents who are dissatisfied with their organizations’ responses, those who say their organizations have responded particularly well are four times more likely to be engaged and six times more likely to report a positive state of well-being”.
However, many leaders will find themselves in a challenging situation, needing to set a clear path of direction whilst not having all the answers to all their team’s questions.
One CPO explained the challenges they had faced with motivating a team who had experienced mental fatigue, a peer from a national retailer corroborated that their team has also sought answers and long-term reassurances which they cannot give, leading to a negative impact on employee motivation. McKinsey’s report states: “leaders need to help rattled workforces believe in the future”. One procurement leader believes that this should be one of their biggest concerns, as they look to strike the balance between keeping good practices in place, whilst adapting their approach as we enter a period of increased outbreaks. The combination of lockdown fatigue and a physical disconnect from an office and colleagues will, or may have already, accelerated disengagement. Leaders need to act swiftly to reconnect, re-engage and motivate a team which may have lost members, enthusiasm and direction.
Rebuilding employee loyalty, whilst not physically connected is a major concern for nearly all leaders. McKinsey’s report once again raised this point, “It would be a mistake to assume that the camaraderie that has sustained many employees early in the crisis will endure long term. Leaders need to take active steps to ensure continued relationship building, particularly for remote workers.”
Across the board, there are overwhelming concerns centred around how the current or future, mixed office and remote dynamic will impact team culture and long-term engagement with the business. A CPO from a major retail bank discussed the on-going challenges they have faced in preserving team culture when working remotely, a concern which has been reiterated by senior leaders in the pharmaceutical sector who discussed the concerns around dilution in connection points between their team members. Previously, the office environment may have facilitated this, but the sense of being together as a team, is near impossible to create in this hybrid world. One CPO explained how some staff have voiced that they have felt a loss in ‘connection tissue’ to the organisation, where as another explained their concerns around the ability of a team to challenge leaders remotely, questioning whether this new way of working may result in a lack of diversity of thought.
As we enter the next stage of the crisis, organisations must adapt to building teams and onboarding people in a way that they feel connected to the culture of a business. The concerns around erosion of social capital during onboarding processes were raised by one CPO from a global consumer goods company, with a procurement leader from a global entertainment’s organisation wanting to know when we will see an increase in employee’s mercenary mentality. It is predicted that as staff feel less connection to an organisation, we will see a spike in salaries as organisations battle to attract talent.
The loss of personal connection will be exacerbated as teams find themselves out the office or in at different times and regularity. Potentially, this may create even greater division within the workforce and in some cases, presenteeism is now more of a premium than ever before, with certain team members feeling that a commitment to the office in a time of crisis, will accelerate development opportunities.
Leaders must quickly learn, how to successfully (and fairly) manage a physically divided team. It is imperative that those working remotely are not put at a disadvantage compared to those in the office. Concerns from across sector were around the ‘offline’ or ‘coffee conversations’ that could be missed by those who are working remotely, with 86% of those spoken to being airing concerns. Across the board, there are concerns around ‘accidental exclusion’, with one-to-one calls leading to decisions being made that have not been co-ordinated with the team which can cause certain members of the team to be forgotten about. This was confirmed by one CPO who raised concerns around some staff feeling their views would not be heard.
Yet a formalised method of communicating does not solve all problems, particularly around individual connections to leaders and the business. Whilst virtual coffees and spontaneous conversations, have reduced some challenges, they have not replaced the office small talk. With leaders from both chemicals and insurance businesses stating that ‘golden rules’ need to be created, with the key point being meetings should either be virtual or physical, but never a mixture.
One CPO felt that the more personal, desk conversations, were often a major motivator for their team. Video conferencing and virtual coffees no longer felt natural and could often feel contrived which again could negatively impact engagement and productivity.
For many, working remotely has highlighted greater inequalities in a team, with the CPO’s we spoke to explaining that younger generations will feel a greater impact on their lives than those more senior in the business. The lack of social benefits and often more challenging, remote working conditions could ultimately lead to a more divided work force.
Throughout the crisis, we have seen introverts and extroverts handle the crisis very differently. Leaders have needed to home in on their facilitation skills, ensuring that both parties can equally contribute to discussions.
The methods used by leaders to engage their teams are going to be tested like never before, with McKinsey stating that ‘mental and physical fatigue is now people’s default’. How leaders will overcome this will be a major hurdle.
One CPO explained his concerns around how they will overcome this, citing a historical reliance on social engagements with the ‘party pot’ being a default tool to create comradery. Yet there are concerns that this may not be possible in the short term and no longer suffice in the long-term, with leaders having to find new ways to rebuild team relationships without the adequate training or prior experience.
Leadership style & behaviours
Leaders must ensure that their management style is fit and ready for a hybrid way of working. Overwhelmingly it was agreed that leaders must adapt to managing through results and outputs however a CPO from a major retailer explained more focus must be placed on performance management and development, which can easily be missed when working remotely.
How leaders will objectively measure performance, with many of their team working remotely is an area of concern for some. It was commented that different team members living environments, would make it difficult to fairly measure performance in a standardised manner.
Leaders must be authentic and lead from the front. Managing through presenteeism, must be ignored. Concerns were raised from leaders of pharmaceutical and financial services business who believe mid-managers that are not experienced in managing through outputs with too many leaders being inexperienced in effectively managing remote teams.
Leaders EQ has been tested throughout the crisis and must continue. Team members will have been impacted differently during the crisis and several CPO’s stated it is essential that their junior managers suspend judgement and develop greater observation skills of potential issues, showing greater empathy.
Managers must develop into leaders and understand how to get the best out of their teams in a period which is still not ‘normal’. A procurement executive from a global insurance organisation stated that leaders must recognise that there is nothing ‘normal’ about what we are going into and must appreciate that for many the next period is a transient phase. Managers now need to understand how to get the best out of individuals, empowering them to make independent decisions. A CPO within the chemicals sector believes that greater training must be provided around having more honest conversations, considering language and cultural nuances when communicating with multi-national teams.
Purpose in the workplace
Executives from across sector are now reviewing the purpose of the office. As Deloitte discuss in their paper ‘Workforce strategies for post COVID-19 recovery’;
“It is important to remember that transformative change can be difficult and unsettling for many workers. Whilst some may prefer working from home, others may be uncomfortable or unproductive outside the traditional work settings. How leaders accommodate and balance these divergent expectations will help define the future of trust in their organisation.”
There are concerns from across sector as to how being away from the office and your stakeholder community for a sustained period may impact business partnering and the involvement in decision making. Concerns exist as to how social capital can be built upstream when working remotely.
Several leaders explained that certain members of their team have struggled to virtually replace, ‘informal coffees’ with their stakeholders.
There are serious concerns, that working remotely may have stalled individual’s professional development and stifled creativity. Leaders from both the retail and pharmaceutical sector believe that a lack of sidebar conversations will have a negative impact on innovation.
Maintaining team cohesiveness and connectivity currently and when 30%-60% of an office may not return will be extremely problematic. Some believe that we are under the illusion that collaboration has been successful, when the reality is that teams have rallied together during crisis.
A sector wide response has been to look into creating more collaboration areas. Yet the practicality of this has come under question, with the CPO from a leading manufacturing organisation stating that most offices are not currently built to support this, and group size restrictions still apply. With many businesses looking to ‘survive’ during the crisis, it is therefore unlikely that fit out projects or new office space is a realistic priority.
Many employees are likely to seek clarity towards their job responsibilities, particularly if some of their colleagues have been made redundant. An executive from a leading food and beverage organisation stated their concerns in the blurring of roles, with individuals wanting to increase their responsibilities and value to the business.
An executive from a leading hospitality business believes that the crisis may see a broadening of roles and required skill sets longer term. This may have an impact on the external talent organisations look to recruit, or the training and development programmes put in place internally.
The mental health fall out as a result of the pandemic is the overwhelming concern for leaders from across sector. 96% of those spoken to raised concerns around the mental health issues forthcoming of their team members. During the early stages of the pandemic, the World Health organisation issued a statement that noted “elevated rates of stress or anxiety” caused from lockdown. Leaders unanimously felt unprepared and untrained to suitably tackle the topic as we return to the workplace.
A CPO from a leading retail bank stated their concerns on how their teams would adapt to life when they get back in the office, raising concerns around their team’s loss of perception of self, and acknowledged that spotting signs of mental health concerns may have been challenging remotely, yet much more apparent in person.
A recent study suggested that extroverts are more likely to struggle when adapting to life back in the office. It was claimed that the common question of ‘what have you been up to?’ could prompt anxiety, with extroverted team members feeling that they have failed to adequately answer the question with ‘nothing’. An executive from a chemicals business agreed that this is a major concern.
A recent study conducted by the University of Manchester and University of London, called ‘Lancet Psychiatry’, described the mental health inequalities caused by lockdown, “with people living with young children showing greater increases in mental distress than people from child-free homes”. It continues;
“The greatest increase in mental distress was seen in young people aged 18 to 24 and those aged 25 to 34”. It goes on to find, “new inequalities in mental distress have emerged, with those living with young children and those in employment at the start of the pandemic being at risk of larger increases in mental distress”. It concludes, “Our findings suggest that being young, a woman, and living with children, especially preschool age children, have had a particularly strong influence on the extent to which mental distress increased under the conditions of the pandemic.”
The mental health fall-out will be an ongoing issue. A CPO we spoke to explained, “‘human’s like a beginning, middle and end and we are in the middle with no end in sight”. This is something leaders must monitor closely with time.The Lancet Psychiatry states;
“As the economic fallout from the pandemic progresses, when furloughs turn into redundancies and mortgage holidays time out, the researchers say mental health inequalities will likely widen and deepen and must be monitored closely so that steps can be taken to mitigate against a rise in mental illness”.
This is a concern for many leaders who recognise that further job cuts and a recession, will have a detrimental effect on the wellbeing of their teams.
A CPO from a leading insurer, stated that it is imperative that team members feel that they have more to offer than just ‘the day job’. Leaders must have the confidence to ask difficult questions, showing authenticity and concern. McKinsey’s recent report, titled ‘Communications get personal: How leaders can engage employees during a return to work’ they state;
“It provides a historic opportunity to overcome the stigma of mental and emotional health as taboo topics for workplace discussion, especially the feelings of isolation and shame that are attached to job losses and other employment casualties.”
Leaders must learn how to manage their own mental health and wellbeing. Nearly all spoken to agreed that measures needed to be put in place to mentally support the leaders too.
As we enter the next phase of the crisis, leaders are going to be tested in ways they have never been tested before. For organisations and functions to emerge from the crisis strongly, it is imperative that leaders find solutions to the multiple problems they may face. Engagement, management styles and mental health are all going to be on-going issues. Organisations must build new strategies, whilst rebuilding team culture and togetherness. Whilst we may be coming towards the end of one crisis, without the right stewardship, businesses may be hurtling into another.