Why leaders should think long term, even now
Lowell Valencia-Miller is a teaching assistant professor in the Department of Management in the Daniels College of Business at the University of Denver. He shares his insights on why strategic leadership is always important, especially during a crisis like COVID-19.
Q: Right now, in spring 2020, what is most important for strategic leaders to consider?
A: Planning for the long term. Leaders with a strategic focus need to be thinking not about the next three months, but the next three years. We can roll up our sleeves and implement the short-term tactical measures that we need to as business leaders, but we need to think about the damage we might do that will have to be repaired later. We can’t allow the decisions we make in the short term to distract us from the decisions we need to make for the long term. Every day that goes by is a day wasted to position our companies for what eventually will be in two or three years.
Q: Can you give us an example of something strategic versus tactical?
Let’s take the aviation industry, for example. Obviously, right now people aren’t feeling comfortable flying. We saw this before, after 9/11. So we ask, what do airlines have to do to instill confidence, to get people flying again? It can’t be done alone; it has to be done in collaboration with government, communities and other businesses. Our economy is based on people traveling, especially in Colorado where tourism is such a huge piece of our economic base. So strategic leaders need to ask, what does the future look like once this is all said and done? Once this passes, what will the consumer be expecting of us?
After 9/11, that expectation was security. People wanted to know the plane was safe, that the pilots in the cockpit were safe, so that they, in turn, could feel safe. Now, we’re thinking not about the pilots or the plane as much as the travelers sitting next to us. So what can be done to ensure that the person sitting next to me, elbow to elbow, is as healthy as I am?
Strategic leaders need to start planning for that future moment. They need to develop strategies to help position themselves for when that day happens. And it will happen. We got through the Depression of the 1930s, we got through 9/11, we got through the Great Recession of 2008–2009. We’ll get through this, too.
Q: How is strategic thinking different today than it has been in the recent past?
A: The difference is how we evaluate both the business model and the overall strategy. The business model is how a company makes money—what the value proposition is for my customer. What resources and partners do I need? What are my costs? What is my revenue?
The strategy is about how we will execute the business model to deliver the value to the customer while generating the benefit for the company in a sustainably competitive way. You can’t look just at the strategy without considering the business model. They both have to be working together in order for the company to be successful.
Nine months ago, you couldn’t find an empty seat on an airplane. Planes were full, people were packed in like sardines, customers felt safe and airlines were making money. So the question becomes: Now what will customers want from airlines, or from their government officials? They will want to feel safe. So that’s the big change—it’s about what the customer wants, and what the customer perceives as valuable.
Q: How do times of crisis affect leaders and leadership?
A: Times of crisis offer the opportunity for leaders to show their true selves. There’s no playbook, there’s no specific right answer—it’s just about making the decisions that need to be made. When you inspire others in the decisions that you make, it becomes less about managing and more about leading. It’s also about resilience. Effective crisis leadership means the ability to clearly communicate how people can come together around a common goal or vision and inspire others to follow.
Q: What do leaders learn in times of crisis?
A: Leaders learn who and what they are. They learn what they’re capable of doing that they hadn’t thought possible. We see companies go through times of crisis in a microcosm. They may suffer a catastrophe, due to weather or another significant uncontrollable event. As they respond, they learn not only what they are capable of doing, but more importantly, what their employees are capable of doing. In some respects, they may even underestimate these capabilities until times of crisis—until everyone rises to meet it.
Q: What will the world look like in 18 months?
A: I wish I knew but unfortunately no one really knows the answer. Some companies will go out of business and never recover. Others will get by somehow, and in the end, they will be stronger for what they’ve endured. But here’s the thing: just as we’ve recovered in the past from numerous economic downturns, there will be another recovery.
It may take a little longer. It may take a little bit more intestinal fortitude or guts. But there will be a brighter future. There will be opportunities presented by what we’ve endured. Whether it’s a new approach to telemedicine, or companies like Airbnb having to create a subsidiary to sanitize and clean rentals, or airlines having to incorporate health checks for passengers similar to what Emirates has started doing, there will be opportunities for people who see them to seize them for the future.
Lowell Valencia-Miller has taught at the University of Denver for seven years, after spending 30 years in a variety of leadership positions at different companies. He teaches several courses including strategic management, strategic business communication and strategic leadership through contemporary analysis.