In nature, stampedes occur when herds of animals are fleeing the threats of predators. Likewise, among humans, we have countless examples of herd behavior, including riots, sporting events, and the hoarding of goods in times of crisis. As researchers who study organizations, we wondered whether the current economic panic concerning the COVID-19 pandemic was also leading to some (understandable) herd behavior among leaders.

In recent weeks, we surveyed 460 global executives on how they expect COVID-19 to affect their organizations in the short and long terms, where they have been focusing their attention, and what actions they have been taking. (See “;The Research.”;) We supplemented this with more in-depth discussions with a select group of 50 executives to better understand the nuances at play across different companies navigating the crisis.

The Research

The survey of 460 global executives focused on both organizational and personal challenges.

The sample was from a cross section of industries and different types of organizations (publicly traded, privately held, nongovernmental, governmental), ranging from single-person businesses to organizations with over 50,000 employees, and across the full range of hierarchical levels.

While many responses reflected concerns commonly held amid the pandemic, other responses were unanticipated and provide important insights for managing and setting strategy in the current environment. In particular, we identified key opportunities for leaders to support preserving organizational culture and capabilities –; the combination of skills, processes, and technologies that differentiate a company –; in the short term and to develop new capabilities.

Predictable Concerns About the Future

We found that the magnitude of the impact of the COVID-19 crisis on companies varied by respondents”; industries in predictable ways. (See “;Severity of COVID-19″;s Impact on Selected Industries.”;) Their concerns were greater for the short term (within the next six months) than the longer term by roughly 15% across all industries.


!function(){“use strict”;window.addEventListener(“message”,(function(a){if(void 0!==a.data[“datawrapper-height”])for(var e in a.data[“datawrapper-height”]){var t=document.getElementById(“datawrapper-chart-“+e)||document.querySelector(“iframe[src*='”+e+”‘]”);t&&(t.style.height=a.data[“datawrapper-height”][e]+”px”)}}))}();

We also looked at how the size and type of company was affecting perceived impact. Our research found that large organizations felt less threatened by the crisis than smaller ones in both the short and long terms. (See “;Severity of COVID-19″;s Impact on Organizations of Different Sizes.”;) Just 55% of respondents from companies with more than 50,000 employees reported that effects in the next six months would be very high or extremely severe versus 73% of solo practitioners and 60% of those from organizations with two to nine employees.


!function(){“use strict”;window.addEventListener(“message”,(function(a){if(void 0!==a.data[“datawrapper-height”])for(var e in a.data[“datawrapper-height”]){var t=document.getElementById(“datawrapper-chart-“+e)||document.querySelector(“iframe[src*='”+e+”‘]”);t&&(t.style.height=a.data[“datawrapper-height”][e]+”px”)}}))}();

In addition, leaders from privately held companies felt less secure than those from publicly traded companies, with 66% of the former anticipating very high or extremely severe impacts, versus 58% of the latter. (See “;Severity of COVID-19″;s Impact on Different Types of Organizations.”;) One potential implication is that larger, publicly traded companies might be better positioned not just to weather a crisis, but to pursue opportunities in the midst of one. Given their relative financial strength and the weakness of some smaller competitors in the current context, bigger players that have greater relative resources may be well positioned for acquisitions or other strategic investments. In other words, it”;s a buyer”;s market.


!function(){“use strict”;window.addEventListener(“message”,(function(a){if(void 0!==a.data[“datawrapper-height”])for(var e in a.data[“datawrapper-height”]){var t=document.getElementById(“datawrapper-chart-“+e)||document.querySelector(“iframe[src*='”+e+”‘]”);t&&(t.style.height=a.data[“datawrapper-height”][e]+”px”)}}))}();

Yet when we looked at the data, we saw no significant differences between large, publicly traded organizations on the one hand and smaller, privately held companies on the other in terms of how they were seeing strategic opportunities in the midst of the crisis. To some extent, this reflects a common problem within organizations around strategic thinking: When you are in the midst of a major crisis, the natural tendency is to remain vigilantly focused on assessing the situation, developing response plans, and mobilizing the organization for immediate threats. In the rush to manage the immediate priorities, there is not enough focus on identifying longer-term opportunities that could contribute materially to recovery and acceleration postcrisis.

A Short-Term Focus, but More at the Top

Given this common problem, it did not come as a surprise that the primary concerns of leaders were around survival. (See “;Respondents”; Rating of the Major Types of Impacts on Their Organizations.”;) These primarily consist of dealing with loss of revenue, cash flow difficulties, and damage to employee morale, all of which see relatively sudden, quick impacts that are more variable over the short term, with concern dropping significantly after six months.


!function(){“use strict”;window.addEventListener(“message”,(function(a){if(void 0!==a.data[“datawrapper-height”])for(var e in a.data[“datawrapper-height”]){var t=document.getElementById(“datawrapper-chart-“+e)||document.querySelector(“iframe[src*='”+e+”‘]”);t&&(t.style.height=a.data[“datawrapper-height”][e]+”px”)}}))}();

However, a significant minority of respondents registered concerns about damage to organizational culture and existing core capabilities, as well as the need to develop new capabilities. More than a third of respondents rated the need to develop new capabilities as a very high or severe concern. Unlike the concerns about revenue, cash flow, and employee morale, these were viewed as equally worrisome beyond six months out as they were in the short run.

Interestingly, however, it was junior-level leaders who were much more concerned about capability loss and insufficient capability development for future success than senior executives. (See “;Employee Concern for Current and Future Capabilities Across Organizational Levels.”;)


!function(){“use strict”;window.addEventListener(“message”,(function(a){if(void 0!==a.data[“datawrapper-height”])for(var e in a.data[“datawrapper-height”]){var t=document.getElementById(“datawrapper-chart-“+e)||document.querySelector(“iframe[src*='”+e+”‘]”);t&&(t.style.height=a.data[“datawrapper-height”][e]+”px”)}}))}();

Why is this the case? Perhaps top-level execs are more attuned to the bottom line. Perhaps they are less attuned to shifts in the market that will require new capabilities. We can”;t reach definitive conclusions, but the gap between the perceptions at the different levels of the organization is in itself something that leaders need to understand and attend to.

Looking for Opportunity in the Midst of Crisis

For several decades, many Western business leaders and politicians have pointed out that the Chinese character for crisis is composed of the symbols representing danger and opportunity. Although it”;s a handy story motivationally speaking, it”;s not actually true. Mistranslations aside, the basic idea still holds: Most crises create longer-term opportunities as well as threats because they produce rapid, sustained shifts in organizations”; external and internal environments. The implication is that the COVID-19 crisis is likely to generate opportunities to acquire competitors and suppliers, as well as top talent, at a fraction of the price of only months ago. Exploiting these opportunities will, however, require leaders to avoid getting fully consumed by the short-term impacts of the crisis and be willing to take some risks in making investments in a very challenging environment.

Concerning talent acquisition, there are unquestionably many opportunities. Job-loss fears are three to seven times larger in organizations of fewer than 100 employees compared with organizations with over 10,000 employees. The implications for leaders of small organizations is clear: They need to be highly attentive to the insecurity in their organizations.

But the less obvious implication for larger businesses is equally important. While only months ago there was a war for talent, the current, sudden shifts and downsizing happening across industries means new opportunities for recruiting top talent.

The concerns about culture and core capabilities, and the opportunities that the crisis is creating, highlight a key question for leaders: How can you pursue opportunity in the midst of crisis? We are already seeing organizations establish separate postcrisis planning teams. These teams should be responsible for assessing the longer-term impacts and how their organizations should prepare to accelerate out of the crisis, with a year from now being a reasonable planning time frame for emergence. Specifically, they should be asking these questions:

What is likely to change permanently as a result of the crisis?
What existing trends is the crisis likely to slow or accelerate?
Do these sorts of changes create opportunities and/or threats postcrisis that can be capitalized on if we rapidly and effectively pursue the right actions?
If so, what needs to happen to lay the groundwork to do this?

Of course, capitalizing on postcrisis opportunities should not come at the cost of dealing effectively with the immediate challenges. Companies and leadership teams must focus first and foremost on doing an effective job of responding to the crisis. However, good organizations usually have the capacity to do this sort of parallel processing if they understand how valuable it is. For leaders today, even modest investment in shaping the postpandemic reality could reap huge potential benefits for your organization.

Read more: sloanreview.mit.edu