7 Lessons for Leading in Crisis
Jossey-Bass, 2009, 139 pp. ISBN 978-0-470-53187-7
Bill George is a Harvard Professor of management practice and the former CEO of Medtronics. He is the author of two books on leadership, Authentic Leadership and True North. This book examines a wide range of crises that leaders have faced and how they dealt with them.
“The habits of a vigorous mind are formed in contending with difficulty. Great necessities call out great virtues.” (Abigail Adams to her son John Quincy, 1780)
“People who are intent on going in a meaningful direction have a chance of finding their way through the fog of crisis and of bringing others alongside them.” (Warren Bennis, Foreword)
“In True North, I defined True North as the internal compass of your beliefs, values, and principles that guide you through life. Like being in a crucible, a crisis tests whether you will hold fast to your beliefs.” (2)
Lesson #1. Face Reality, Starting with Yourself
“The leader’s first job is to define reality.” (17, Max DePree in Leadership Is An Art.) Before you can lead your organization through a crisis you have to recognize it and then get everyone else to acknowledge it as well. Many CEOs get stuck in a comfortable mind-set with their version of reality. Leaders tend to miss the signals, get defensive, and go into denial, blaming people or circumstances, not accepting that they must fix it. Often it is hardest to admit your mistakes and acknowledge your own role in the origins of the crisis. And unless there is a culture of openness and candor, few people will risk getting into trouble by telling the boss bad news. Whatever is the worst that could happen, it’s not as bad as compounding the problem by denying it.
“In today’s world, the penalty for non-adaptive behavior is severe. With the velocity of information on the internet, reaction times must be much shorter as the failure to adapt will be quickly noticed, amplified, and punished.” (27, quoting Kevin Share, CEO of Merck)
Lesson #2. Don’t Be Atlas: Get the World Off Your Shoulders
Leaders turn inward because they fear failure and loss of self-esteem. We tend to operate with two pictures of ourselves. In one we are capable and contributing. In the other, we see our reputation being destroyed by exposure of our shortcomings. A crisis tends to accentuate the negative picture, and we retreat inward. For many, their image is so dependent on success that failure deeply wounds their self-image and they live in a world of denial.
Embrace your fears and they will gradually dissolve. Turn to your teammates and important people in your personal world for help and support. Without help, leaders carry an impossible load. People from outside can provide insights and advice you don’t get from insiders. Begin with one person who can help you discover your blind spots, who will be completely honest and open with you, perhaps your spouse or best friend. Having mentors is a tremendous asset. Being vulnerable can be powerful. It helps you connect with people at a deep level.
“Learning how to express your vulnerabilities on appropriate occasions is an emerging leadership skill. It needs to be used with care, so that people can have confidence in your leadership and the direction you are leading them.” (42)
Build your resilience by keeping your body in shape, keeping your mind sharp and spirits high, and by not taking yourself too seriously.
Lesson #3. Dig Deep for the Root Cause
“Like the weeds in your backyard, crises have roots with long tentacles that are buried deep underground. If you cut down the weeds without removing the whole root, they will surely grow back.” (47) People are often blocked from recognizing the root cause because the implications are so frightening. The leader must bring people together to confront their worst fears and address the risks.
“As a leader during a crisis, you should insist that people give you the whole story. Then always protect them from negative consequences when they do.” Trust the people you work with but get out there in the marketplace and get first hand information to verify what they are telling you. You don’t have to solve the problem yourself, but you have to keep asking probing questions until the real problem is identified and resolved. Superficial solutions will create further problems.
Lesson #4. Get Ready for the Long Haul
It is tempting to simply make tactical changes and weather a crisis until things return to normal. But it is very difficult to forecast when it will end. “Like sailors at sea, they batten down the hatches until the storm passes. But what if the storm goes on for a long time? What if fundamental changes in direction are required?” (62) It may be better to assume it will last a long time. If things ever return to normal, “normal” will be different. Often situations deteriorate before they get better.
When markets are growing and your firm is competing hard, it is easy to overlook signs of trouble and to take greater risks to keep profits flowing based on the assumption that markets will stay healthy.
Decisive action is often encumbered by the emotional stake in past strategies, people, and decisions. Outsiders can often see what needs to be done because they do not have the emotional blinders. Are you prepared to ask yourself what a new CEO would do and then walk out of your office and come back in as that new CEO and do it?
“In a crisis, cash is king.” (69) Do you have enough cash reserves to get through the worst crisis you can imagine?
Lesson #5. Never Waste a Good Crisis
Use a crisis to fuel the future, to cut overhead, restructure, to make difficult moves, or whatever is needed to position your organization for a brighter future.
Lesson #6. You’re in the Spotlight: Follow True North
“The world of the Internet has democratized information and dramatically increased its velocity of transmission. As a leader, you need to find ways to use it to your benefit rather than bemoan its downsides.” (89) “During a crisis, the spotlight on leaders is turned up to maximum intensity.” “In the glare of the lights, your ability to stay true to your values is put to the test. You can make or break your reputation in an instant.” (90) After the 9/11 attacks, national leaders hid while Giuliani was instantly visible, present, caring for the city’s police and firefighters. You can’t anticipate a crisis but you can be ready by being grounded in your beliefs and principles.
“The key to handling public issues is to be open, straight-forward, and transparent.” (91) “Being transparent creates an open and human image of the organization. Its leaders seem like normal people who are tasked to take on difficult challenges. When you are open, you are in a better position to ask people for their support. If things get worse, as they often do, people are more sympathetic to your point of view if you have kept them fully informed. During this time, you should be highly accessible within your organization….” (92)
“In today’s world, internal and external communications have morphed into one, making it impossible to draw a bright line between them. Whatever is said inside the company is quickly transmitted to outsides, and whatever is written or said outside is also read or heard inside.” (93) “The greater your openness, the more people will rely on you to provide them with the inside view, and the less they will rely on the rumor mill.” (96)
“In an era of instant media focus on disasters and problems, the hunker-down strategy won’t fly. Leaders are compelled to get out in front of the story immediately or abdicate their opportunities. You are better off seizing the initiative and telling people what you know and what you don’t, while assuring them that others are working to get the facts as quickly as possible.” (97) “In fact, acknowledging that you don’t know is far healthier than pretending you are certain.” (98) “The key is getting out in front of the crisis in its first hours with clear statements, both internally and externally, that accept responsibility and build confidence and credibility with all your constituents.” (102)
Lesson #7. Go On Offense, Focus on Winning Now
“Look at the crisis as a gift. It provides you a golden opportunity…to reshape your business and your industry and emerge as a winner.” (105) Develop a clear vision of future markets, including how your customers’ needs will change. Based on these changes, develop a focused strategy to play to your strengths. Move aggressively. Invest during downturns. Here are seven steps:
Keep your head up rather than hunkering down. Maintain a sharp focus on winning in the emerging marketplace. (118)
“The crisis you are facing, or inevitably will face, may be the defining moment in your professional life.” (121) “What is your defining moment? When that moment arrives, will you be prepared to heed your calling to step up and lead? Your defining moment comes when your life story collides with a crisis in the midst of your path. It is in this crisis that you learn who you really are.” “Are you being true to your beliefs and your values? Or have you buckled under the pressures or been pulled off course by the seductions of the moment?” (125)
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