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David McKay, MBA ’92, LLD ’19, shares how to lead through uncertainty

May 13, 2020

Evangeline Philos

Evangeline Philos is a current MBA student and Forté Fellow with a background in operations in the oil and gas and consumer packaged goods industries. Her personal goal in the MBA program is to learn how to lead through uncertainty and get comfortable being uncomfortable. In her blog below, she writes about lessons learned from David McKay, MBA ’92, LLD ’19, President and CEO of RBC, who spoke to students on May 12 for the MBA Teachable Moments Virtual Speaker Series, a program designed to provide Ivey MBAs with unprecedented access to accomplished leaders.

COVID-19 brought unprecedented challenges to the global economy, upending markets and posing enormous liquidity risks for the majority of businesses and consumers. David McKay, MBA ’92, LLD ’19, discussed RBC’s agility in handling this crisis from a financial perspective and conveyed his realistic approach to leading through uncertainty. 

Learning from the past

At RBC, McKay said lessons from the 2008-09 recession were applied proactively and with relative success. While some banks are struggling with liquidity, RBC started to play defence in 2019 by anticipating a recession and building up reserves. While no organization was fully prepared for a pandemic of this scale, RBC had buffered its balance sheet with liquidity, holding off on share buybacks and acquisitions. This points to an important takeaway: be agile in learning from the past and apply those lessons swiftly to change and improve. This approach is RBC’s source of strength.

Seeing black, white, and grey 

The new normal poses both opportunities and challenges. McKay said 94 per cent of the 85k RBC workforce is currently working from home. Some employees find the digital medium to improve productivity; others are plagued by mental health issues. On one hand, this is a chance to reduce our carbon footprint. On the other hand, predatory states are a real threat and McKay said cybersecurity has become a top priority. The takeaway: seeing both ends of the spectrum, and everything in between, is crucial in being able to scenario-plan. Leaders must be capable of applying a wide perspective to inform the best decisions and anticipate future challenges. 

Working as a team 

Dealing with a crisis is a team game, McKay said. While governments are ultimately accountable for policy, they rely on corporations for support and advice, recognizing that some of the best data resides in the private sector. Of note is that many of the things we considered important start to fall away. McKay suggested there is still a long road ahead. It was easy to shut down; it will be harder to re-open. Assessing the future of our economy is difficult and investors are looking for management that is cautious and conservative. The takeaway: credibility as a leader comes from providing a realistic outlook and working with others to make the best tactical decisions for the long term.  

Making difficult decisions 

For McKay, this pandemic has tested leaders by forcing them to make “grey” decisions in a shorter period of time. It becomes a concern when leaders succumb to pressures, especially in critical situations. Crisis management teams cannot have cracks. When pressure points are amplified, individuals tend to rely on their core strengths and veer away from areas they had developed. When this happens, McKay said, it is important to trust your gut and not hesitate to make changes to teams while ensuring that individuals have the opportunity to move into roles for which they are better suited. 

Looking forward 

McKay left us with some final thoughts on looking forward in this digital age. As an MBA class, how can we build teams and create culture digitally? As I Zoom into another lecture tomorrow, I will be wondering how we have done so far in nurturing our digital family and what more we can do to ensure that we leave this year as tightly knit as previous classes.