This is the time to be bold, says Mehrdad Baghai. “There’s great freedom in the sense that people will be much more understanding of moves that don’t work out. People are always going to assume that you were doing your best to get the boat to harbour in a crisis and that you assumed this kind of bolder move was going to be the thing that worked well.”
As chairman of strategy advisory firm Alchemy Growth, Baghai works with CEOs to build their businesses. He has also studied what separates the entrepreneurial from the timid in times of crisis. During his time as a partner at McKinsey & Company in Sydney and Toronto in the 1990s, he co-authored a paper on growth strategies and found that “acquiring in a downturn was the single greatest value-creating move any leader could make”. Many organisations don’t have the means for acquisition in the midst of a crisis, he hastens to add, “but the ones that can look for pockets of opportunity and make a move are the ones that create more separation between themselves and their competitors.” This is a time, he explains, where you see creative, entrepreneurial leaders at their best.
Effective leaders are actively looking for different ways of working in the future. In the past decade, there have been more collaborations at the sector level, says Baghai, pointing to telecommunications companies around the world coming together to identify technology for 5G or banks from different regions partnering in a syndicate to look at fintech investments. “If you’re a full-tech company and you can sign up a bank in five major markets, that’s incredibly attractive.”
The coronavirus crisis has put a spotlight on creative collaborations. Baghai singles out Ergo’s COVID-19 Intelligence Forum, which has brought together economists, policy-makers and scientists to distil information for decision-makers. He believes more global partnerships from the same sector (but not in competition) will be formed in order “to use their collective mass to be attractive”.
Another opportunity is in industry but he cautions that our manufacturing capacity “is not what it was three decades ago so it’s going to take creativity and entrepreneurship to set ourselves up to be strong participants in export markets as they open up over time”. Baghai also challenges the government to support industries that are going to be an important part of Australia’s future, such as new energy sources. “We haven’t done nearly enough to exploit our leadership across the globe for a whole bunch of sectors in the energy transition the way we did in mining,” he says. “With our natural strengths, there’s really no reason why we couldn’t be leaders so this is the time for us to get in front. When the world gets back from the downturn that has accompanied the virus we need to be there to take advantage of the new growth.”
And if we want to change our mindset, we need to look at gender equality like never before. In April, Forbes identified many countries that have fared well in the coronavirus crisis (think Germany, Taiwan, New Zealand and Iceland) have female prime ministers or presidents. “Women have something very special to offer in a crisis,” says Baghai. “In the aftermath of this how do we ensure that Australia doesn’t become one of those countries that’s satisfied with the idea that 20 or 30 per cent female leadership is enough?”