Australia’s business leaders are facing a once-in-a-generation test of their managerial mettle.
By Engel Schmidl
Like everyone else, Saxon Mitchell has watched the coronavirus pandemic unfold, mutating rapidly from an outbreak in the Chinese city of Wuhan to an enormous global crisis.
The founder and CEO of events and catering company Venue Management Services, Mitchell knew things were bad when cancellations started building up.
In 20 years of owning and running hospitality businesses, he has seen downturns, including the global financial crisis (GFC).
“However, this is a complete revenue wipe out. For our industry, if we don’t have guests to serve, there is not much we can do,” he says.
“The very existence of our business is being tested during this crisis.”
Across the world, millions of business owners are in the same boat. No one has been here before. No one knows where it will end. The coronavirus fallout is shaping to be possibly as bad as the Great Depression – or worse, according to some economists.
Nouriel Roubini, Professor of Economics at New York University's Stern School of Business, writes that “the risk of a new Great Depression, worse than the original – a Greater Depression – is rising by the day.”
A difference leadership beast
What leadership strategies can be applied in such grave circumstances? What does crisis management look like when conventional wisdom seems hopelessly inadequate?
IOOF CEO Renato Mota says we are facing three crises in one: health, financial and economic.
“This is like a trifecta and not a pleasant one.”
Mota has worked in banking and finance for almost 25 years. He saw the worst of the GFC but says this is of a different magnitude.
“This started as a health crisis, and it very quickly turned to both a financial and an economic crisis.”
He says the hardest challenge right now for leaders is staying ahead of the game. Strategic adaptability and clear communications are crucial because of the continually changing landscape.
“Your ability to predict the future is radically reduced, which means you need to be able to adapt to what you know about the environment. You can have hypotheses and scenarios, but your greatest skill is your ability to adapt.
“For us, a lot of that is about communication, be it with our clients, staff, partners or stakeholders. Communication is our greatest weapon right now.”
Addressing the issues
Communication is front and centre as well for Julie Mathers, who is the founder and CEO of Flora & Fauna, a vegan beauty and lifestyle store.
Uncertainty around both supply chains and consumer demand is clouding the picture for all retailers. Cash flow problems loom for even those with a robust online presence suited to the new norm of self-isolation, like Flora & Fauna.
“We have to be prepared for everything, and that includes a complete shutdown which is unprecedented but very possible when we look at other countries,” says Mathers.
She’s in close and constant contact with her team. “It’s more than unsettling for everyone, so we have to make sure we over-communicate and be very clear.”
She says authenticity is a core value of her leadership strategy, something which she has held firm to in the crisis.
“Leading in a crisis brings out the outstanding leaders, in my opinion. Do you front it and manage it, or do you hide? Under normal trading we’d be inspiring and leading, we’re still inspiring but in a different way. I have to be clear and transparent and action-focused; you pull on a different set of skills.”
For Mitchell, adaptability means an overnight pivot to bring in cash flow.
“In one of our sites, we are creating a meal home delivery service which has required investment in certain equipment and supplies as well as retraining team members in a new service discipline.”
He hopes this might help save his business but forecasts lean times ahead.
“From my perspective, I don’t believe our part of the hospitality industry will rebound until well into 2021.”
See all of CPA Australia’s COVID-19 information and support, including small business resources.