For most of us, thankfully we are not involved directly in armed conflict, but what happens when there is one in a country. From the outside looking in, we know there will mass migration to safe areas of the world, ideally all those leaving have some form of money to ensure travel costs. After the mass migrations which will make headlines, the businesses that are left, how do they function? Louai Al Roumani, Former CFO of BBSF Bank in Syria has written a book about how to function, which can be used for contingency planning if fortunately you are not involved in armed conflict. The book is titled Lessons from a Warzone, Penguin Business, London, UK, 2020.

Chapter 6 Change, but don’t rush to change everything

Mr. Roumani at BBSF over the course of 8 years of employment had 6 different CEOs. Every newcomer, particularly at the CEO level wishes to relay now this is how things should be done or change is about. A good leader has the ability to lead a change process.

An effective leader in an crisis recognizes the unhealthy triggers of change and is capable of identifying areas that need transformation, but does not uproot core values. They usually get 4 things correct

Being mindful of opposing forces in a changing context – in a crisis there are opposing forces at play. Change induces stress and people want some form of stability. An example is asset-liability meetings were boring before the war because the levels were comfortable. When the war started and continued the meetings could last a couple of hours due to different viewpoints.

Rewiring their thinking: from temporary and permanent changes to changes mapped against CSFs – in normal times temporary measures are done for temporary changes and permanent measures for permanent challenges. In a crisis, it is hard to draw the line between the 2. Therefore it is better to identify and changing criticality of the CSFs and can you still meet them.

Having a strong sense of the organization’s core values – core values are the unwritten rules that an organization is run by. These procedures were started long ago, for good reasons, a crisis happens and someone wants to change it.

Always asking the 5 whys – a successful leader in a crisis asks the 5 whys behind every change. Ask why 5 times to identify the true reason for the change. This method helps people become aware of the structured approach to assessing the need for change, and will be more diligent in making requests for change.

The 5 outcomes of change

Good outcomes

change to less – there was a desire to triple check everything, sounds great. Reality is that the other 2 relied on the someone else doing most of the work. Better ensure one robust control layer or sometimes less is more.

another example how to find a ghost worker. People cheat the system, but there are tell tale signs for example: a manager with a 300 employees has discretion and people were put on payroll. Trying to vertify was frustrating, however everyone takes holidays. Vertifying those that do not take holidays led to the fraud.

change to more – creative accounting is bad. Creative finance is good. Having the right information at the right time is always vital.

an example is all banks have provisions for their doubtful debt. It is usually between 0 and 2%. In the war the ratio went up to 40%. What to do? What can you control? how systematic this figure is to everyone including your competitors? if you adjust the ratios, with explanations, the Board will accept it.

remain the same – sometimes the answer is no change needs to be done. For example the change may not be a CSF and better left alone for now.

Bad outcomes

remain passive – do not do anything this means not doing the assessments to even consider changing, just try to wait it out.

change things half-heartly -f if change is going to happen, then all in, not at the margins.

Linking to dividend paying stocks, a constant in life is change and how an organization deals with it. If you examine the biggest companies from 20 years ago, they have changed. If companies are not dealing with change and how to adjust to it, find an alternative.

There are more questions than answers, till the next time – to raising questions.