Corporate war rooms are having a moment right now. In a lot of ways, that’s no surprise: The challenges of managing a business through something like the novel coronavirus pandemic screams for a centralized command-and-control structure.
Leaders are usually fond of military metaphors in times of crisis. Already during the pandemic, US president Donald Trump has declared himself a “wartime president;” governors and generals have made frequent battlefield references; and Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, has often sounded like he’s getting entangled in a two-front war, with Covid-19 and with Trump.
Corporate leaders are on wartime footing as well. The CEOs of AT&T, Bank of America and Marriott all have compared efforts to confront the pandemic to epic battlefield conquests. Ignacio Alvarez, CEO of Popular, Inc., the Puerto Rico-based bank Banco Popular with a large presence in New York City, says that responding to the changes and challenges presented by Covid-19 is indeed “like fighting a war.”
“The people in the headquarters had better have a good connection with the people on the front lines, so they can maneuver quickly,” Alvarez says, adding that having a good plan helps, “but once the first shot is fired, you need to adjust rapidly.”
Small wonder then that war rooms are so in vogue. In a March survey published by business media company Arizent, nine out of 10 financial services companies said they had established special Covid-19 executive response teams, as had companies like Microsoft, UnitedHealth Group, and General Mills.
“It helps us look ahead and determine what’s going to happen a week or two from now that might not be apparent to the people on the ground,” says Donal Mulligan, former CFO of General Mills and current head of the task force now overseeing the packaged food maker’s Covid-19 response.
During times of crisis, much like in times of war, having a centralized team that includes personnel from across business lines, geographies, and support functions is crucial for coordinating responses, communicating with the troops, and seeing into the future.
More than that, employing military-style syntax when facing a relentless, invisible enemy conveys the stakes in easy-to-grasp terms. “Military strategy acknowledges that this is a zero-sum game: We win, they lose, or vice-versa. No half measures,” says Davia Temin, CEO of Temin and Company, a crisis-management consultancy. “It confers on the battle a level of gravitas.”
While many big banks some other legacy companies employ screen-filled bunkers that look like NASA mission control, most war rooms are virtual by necessity, owing to both the global nature of today’s business landscape and to the unpredictable scope of Covid-19.
Nor, despite the informal references, does anyone technically call their virtual crisis center a war room. Popular, Inc. calls its effort a “business continuity group.” At BOK Financial, a big Oklahoma bank, it’s called the “emergency operations center.” General Mills uses the fairly common term “task force,” while global consultancy group McKinsey & Company prefers the term “integrated nerve center.”
According to Temin, the nom de guerre is “a fancy name that a lot of people use, and that’s fine. If it provides the group with dignity and a heightened status, that’s needed during a crisis.”
War rooms have been around for a while. Winston Churchill famously orchestrated Britain’s strategy during World War II from his underground Cabinet War Rooms. General Norman Schwarzkopf managed the 1990s Persian Gulf War from two war rooms—one in Riyadh, the other at US Central Command in Tampa.
Corporations use them to respond to all sorts of crises—hurricanes, wildfires, cyberbreaches, and the like. They’re often comprised of an institutionalized group, a type of standing SWAT team that lies dormant until summoned to action when the company’s operations are at-risk.
Some corporations practice during normal times with military-style table-top exercises to improve team coordination, a training exercise that “helps members to learn about each other—that guy overreacts a bit, or she underreacts,” Temin explains. “Ideally, it’s like a well-run platoon: When you’re facing the enemy, you know how to deploy.”
The most ambitious leaders get training: the US Army War College offers weeklong courses that teach CEOs how to apply military tactics and strategy, including war-room operations, to corporate crisis situations.
At General Mills, Mulligan’s task force is a 20-member group that includes representatives from various operating units, as well as legal, human resources, IT, risk-management, facilities, and government affairs. Since the mission is to best Covid-19, it also includes an outside expert on infectious diseases.
The task force’s charge is broad. It acts as a response hub and feeds recommendations on big-picture topics—such as the decision to implement stay-at-home orders—to General Mills CEO Jeff Harmening and his senior leadership team. It also oversees several regional control towers that manage things like supply chains and distribution.
The group made an early decision to accelerate investments in the IT infrastructure’s bandwidth to accommodate the surge of employees working from home. “The investments were planned over the next 18 to 24 months, but we basically got them accomplished in a few weeks,” Mulligan says. “We needed to make sure we had the bandwidth for our employees to be as productive at home as they are in the office.”
As the pandemic unfolded and people in the US rapidly shifted from eating out to buying grocery-store brands, demand surged. Mulligan’s task force made the call to trim production of its 89-variety Progresso soup line to a handful of the most popular products like the traditional chicken noodle.
“Every time you change a variety, it means you’re stopping the production line to reset it. That’s time you’re not producing cases,” Mulligan explains. “So, we said, ‘Let’s focus on one and run it as fast as we can.’”
By nature, war rooms are ongoing efforts. They adapt as people learn from experience and improve crisis management tactics as they evolve. Alvarez notes that Popular Inc.’s business continuity group was overwhelmed in response efforts to Hurricane Maria in 2018. “We had never faced anything that big, and we were a bit slow,” he concedes.
For a big bank, the pandemic response has included not only employee and customer safety, but also quickly establishing cybersecurity safeguards for employees working from home and legal protocols and disclosures for emergency payment deferral and loan programs, such as the Small Business Association’s Paycheck Protection Program. “This time, our response has been much faster because we’ve dealt with a crisis before,” Alvarez says.
Smaller companies employ war rooms, too. Montecito Bank & Trust, a community bank in Santa Barbara, California activated its standing “incident management team” in late-February to spearhead its Covid-19 response. The group met twice a day for weeks, virtually, to review public health updates, authorize emergency relief pay for some employees, and authorize purchases of laptops, security tokens, and security licenses to enable staff to work from home. It also performed stress tests on Montecito’s finances and reviewed scenario plans, eventually deciding to close all branch lobbies.
The structure “helps make sure that we’re not stepping on anyone’s toes,” says CEO Janet Garufis. “It’s important that everyone is on the same page, and everyone hears the same story.”
In the end, all the talk about military-style coordination might pale next to the psychological need for people to see someone—or a group of someones—firmly in charge during a crisis. “When the stakes are this high,” Temin says, “we want fierce, battle-tested combatants on our side who are all-out to win.”