Leadership in times of crisis

Leadership in times of crisis

 

The COVID-19 pandemic challenges the world in countless ways. Hundreds of thousands of people have lost their lives. Lockdowns, quarantines and social-distancing measures have led to massive fallout for the global economy, putting the future of many companies at risk – especially small and medium enterprises. From February to the end of March, global stock markets lost around one-third of their value and have remained volatile ever since. 

Unemployment has skyrocketed, especially in economies where “hire and fire” is still the preferred way to deal with volatility in demand. Experts predict that the European Union’s economy will contract by more than seven percent this year. And political tensions are high all around the world, although also for other reasons. 

In the words of UN Secretary General António Guterres, it is “the most challenging crisis we have faced since the Second World War.” To overcome this crisis will need a lot of work. To help society get through this peacefully will need leadership. Not from any one particular person, but from each and every one of us who have the privilege to be responsible for people and their families. 

 

I say this as the humble yet experienced first man of Siemens – a company that has faced, and overcome, many crises throughout its 172-year history. In the recent past, we navigated through the global financial crisis of 2008. We cleaned up our company during the 2007 compliance crisis. We rebounded from critical strategic and financial setbacks in 2013. In all these crises, leadership and great teams built by it enabled Siemens to become stronger and better than before.

Time and again I’ve seen this kind of leadership and alignment at Siemens over the past few months. At all levels of our organization, our employees have gone the extra mile to adjust to a new way of life, a new way of working. They have delivered a robust performance for the quarter. They have successfully completed the carve-out of our energy business and created Siemens Energy as originally planned. They continue to transform this company in an unprecedented way, securing the future for the next generation. 

 

They have done all this as a team, knowing that we all share a responsibility to support and protect our colleagues. This solidarity, this sense of community is the result of a strong leadership culture. Leadership is not reserved for managers. It is first and foremost a behavioral matter. It is about acting as if it was your own company. As if it was your own money to spend and your own reputation to lose. This is a very powerful aspiration and something that will enable us to overcome this crisis. It is about the people and about their leaders to give them confidence and show them the way forward. 

 

In this together  

Despite the company guideline directing Siemens employees to work from home, not all employees have that option. Our factory workers, for example. They keep our businesses up and running, but they cannot work at home. That’s why early on in this crisis it was very important to us to recognize those working on the front lines. Without them, our businesses would grind to a halt. We felt that meeting these employees face to face and thanking them for their service was the right thing to do.

Mülheim, Berlin, Görlitz, Krefeld and Amberg are some of the sites I visited.  Some of my fellow management team members went to see other sites, too. Needless to say, I would have visited sites outside Germany, but travel restrictions prevented me from doing that. Instead, we expanded our communication. We added video, the form of communication that comes closest to face-to-face interaction. Our goal was to reach out to every employee. During this time of isolation and social distancing, we did not want any employee to feel that they had to go it alone.

 

Connecting the dots  

One of the first things we did when the coronavirus was developing into a pandemic was to activate our Corporate Crisis Team (CCT). We established this team and the policy on how to operate it long ago. The purpose of the CCT was to manage extraordinary events, where the “normal” organization would be too slow and too formal. It has gone through practice runs many times before. Now it is active for a real crisis. The most relevant matters of the workstreams have been:

•  Health, safety and security
• Business continuity (demand side and supply chain et al.)
• Global coordination of regional aspects 
• Financial stability, liquidity 
• Securing own infrastructure (IT, Accounting, reporting et al.)
• Helping others (society) 
• Communications

While the workstream leads worked on their topics separately on a day-to-day basis with their teams, they are each a member of the CCT. And the CCT is chaired by the CEO. Here the important thing to remember is that you cannot delegate crisis management. You, as a leader, have to roll up your sleeves and do some of the heavy lifting like all the rest.

 

Every week the team meets to assess and discuss the impact of the pandemic on our company, on our businesses and on our employees. And we keep our employees around the globe up to date. They get a status report after the CCT personally from me in the form of a video message. I believe employees have the right to be informed about developments that affect them.

 

But the videos do more than provide information. They are meant to build confidence and to inspire employees all over the world to lead by example in these challenging times. Leadership doesn’t mean demonstrating who is the boss. It’s about being a role model by being supportive and mindful of others and by fostering a sense of community – and it’s about helping.

That’s one reason why we set up a coronavirus aid fund, where every euro donated by employees is matched by Siemens AG. The fund was set up through our community-serving nonprofit organization Siemens Caring Hands e.V., which has a 20-year track record in providing direct assistance to victims of major disasters. 

In that spirit, my fellow board members and I decided that we would go first in donating to this aid fund. This way the money will be put to use where it is needed most quickly and directly. The amount of donations that have come from employees in recent weeks has been astounding. In total, Team Siemens has already raised more than 12 million euros. I am very thankful for that. And this generosity clearly shows that the purpose of our company – to serve society – is well-established among our more than 386,000 employees. 

But our actions go beyond donations. All over the world, Siemens is working hard every day to lighten the burden of the pandemic. Demand for the products of Siemens Healthineers is high. “Help wherever we can” – that’s the motto of CEO Bernd Montag’s team. Healthineers has developed high-quality COVID-19 test kits and has accelerated the delivery of medical equipment to hospitals. In the UK, Siemens and Siemens Healthineers are participating in the VentilatorChallenge, an initiative by leading UK companies to produce medical ventilators in large numbers. 

Last but not least, while protective masks were still in short supply, we used our global procurement network to purchase two million more masks than we needed ourselves. Of these additional masks, we donated one million to the state of Bavaria and one million to the federal German government.

 

We will rebuild. Together.  

A saying goes: “The night is always darkest before dawn.” This means there is a time after COVID-19. And it could arrive soon. Until the world has a vaccine to protect people from the virus and medicine to treat them, there will be no reason for quick recovery. We now have a great opportunity: We can and need to build a better world – a sustainable, multilateral world based on the principles of an environmentally responsible, social market economy. 

 

No doubt, overcoming the crisis without losing sight of the future will be a challenge for political leaders, for business and for society as a whole. But this is the time for true leadership to show. We need to put our own interests and preferences behind the greater good of the next generation and, finally, behind a sustainable world economy that enjoys freedom and peace.

Our colleagues at Digital Industries are enabling the manufacturers of protective equipment and medical devices to convert or expand their production processes. We’ve also opened our 3D printing network for hospitals and healthcare organizations that are in urgent need of spare parts for medical equipment.

Generations before us have shown us how to do this. 75 years ago, members of the Allied Forces freed up the world from a terrible regime. Millions gave their lives for this. Millions were killed by the Nazi regime because of race and willful destruction. They freed up the world, they rebuilt it and created freedom and peace and a multilateral world order – at least for the most part. In the last decades, we have overdone it and crossed the line, where we exploit more than we build. There have been many reasons for this: a race for power, population growth, striving for a better life or even greed, just to name a few.

Among other things, COVID-19 has taught us a lesson: There are greater powers outside of mankind’s control. Maybe it’s simply nature that has struck back. In any case, we need to pause, think deeply and act diligently to build a world that is better than it was before COVID-19. Not because of the other potential pandemics of the future, but because this is what responsibility and leadership are all about. This is true for governments, companies, institutions and individuals alike.

The Author: Joe Kaeser 

 

             

 

About:

Ich bin einer von weltweit rund 295.000 überzeugten „Siemensianern“. Gemeinsam verwirklichen wir, worauf es ankommt. Unser unermüdlicher Antrieb und unser Versprechen: Mehrwert zu schaffen – für Kunden, Mitarbeiter und Gesellschaft. Denn ich bin der festen Überzeugung: ein Unternehmen muss seiner gesellschaftlichen Verantwortung gerecht werden. Aber dies kann nur aus einer Position der Stärke kommen. Deshalb ist eine wettbewerbsfähige und nachhaltige Ertragskraft eine wichtige Aufgabe. Meine Passion: Innovationen, Soziale Marktwirtschaft 2.0 und Transformation von Geschäften und Gesellschaften. 

Joe Kaeser ist seit 2013 der Vorstandsvorsitzende der Siemens AG. 

Mitgliedschaft in gesetzlich zu bildenden Aufsichtsräten sowie in vergleichbaren in- und ausländischen Kontrollgremien von Wirtschaftsunternehmen (externe Mandate)

- Allianz Deutschland AG, München (bis März 2020) 

- Daimler AG, Stuttgart 

- Mercedes-Benz AG, Stuttgart 

- NXP Semiconductors N.V., Niederlande  Sonstige Gremienmitgliedschaften 

- Vorsitzender des APA (Asien-Pazifik-Ausschuss der Deutschen Wirtschaft)