Crises happen everywhere, from moribund businesses, leadership breakdowns and loss of trust to consumer migrations, disappearing financial portfolios and natural calamities, among others. To get out of these crises, a true and steadfast leader must go in the line of fire and pilot his organization through the tests and difficulties.
Bill George, a professor of management practice at Harvard Business School, in his book 7 Lessons For Leading In A Crisis, believes that it requires a combination of skills and behavior, both personal and professional. He says these can be mastered if the leader has the ability to stay on course with his authentic self — his convictions, his values and his truths. Here are seven lessons for a leader tasked to herd his organization through a crisis:
The First Lesson: Gaze at the reflection in the mirror and examine what you see. The man in the mirror, that’s who you are in a crisis. As a leader you must face reality, and, as George says, the reality must begin with the person leading the pack. If you are that person, identify your responsibility in the problem of the moment, bring your teams together and agree on what brought you to a dire state in the first place. Accept that widespread recognition of reality is the crucial step to finding the solution to an identified problem.
The Second Lesson: Prepare for the situation to move from “awful” to “more awful.” George states, “No matter how bad things are, they will get worse.” You have to face off with this reality, and you’d better believe it. Don’t shoot the bearer of bad news. Instead, listen to him and plan your actions given the grim facts that confront you.
Snap out of denial mode and focus your attention on what needs to be done to arrest the downward spiral. You may implement a series of tactical next steps to immediately get out of the rut, but what is more important is your strategy for a healthy turnaround and how to stay in that healthy state. Attempting to find short-term fixes that address the symptoms of the crisis only ensures a relapse that will bring you back to the same tight spot.
The Third Lesson: Have plenty of cash in times of crisis. George suggests, “Build a mountain of cash, and get to the highest hill.” He aptly describes the situation by declaring that in times of professional peace and quiet you worry more about earnings per share and profit surge than you do about your balance sheets. To survive the turbulence, you need to get ready for a long fight to guard against the nastiest circumstances so you will have to be prepared to traverse the proverbial eye of the storm. The question is, “Does your company have ample cash to outlive the most dreadful occurrences?”
The Fourth Lesson: Never be a “lonesome cowboy.” You cannot go it alone when crisis is in front of you. Linking up and building coalitions with the right groups or individuals that can provide help, ideas and commitment toward the identification of corrective measures are critical. “A leader cannot act like Atlas. Get the weight of the world off your shoulders,” George enthuses. It’s all right and, in truth, essential, for a leader to be open with others, own up to blunders, and look to trusted friends and associates for counsel, assistance and encouragement.
In order to understand the real reasons for the crisis, the leader and member of the leadership team must be willing to tell the whole truth. As JP Morgan Chase CEO Jamie Dimon shares, “It’s not sufficient to have one person on your team who is a truth teller. Everyone on the team must be candid in sharing the entire truth, no matter how painful it is.”
The Fifth Lesson: Volunteer yourself to sacrifice. There is no doubt there are valuable things that you will have to offer to temper the situation or to appease aggrieved parties. When sacrifices need to be tendered, the leader should step up and make the greatest sacrifices himself. “Crises are the real tests of a leader’s true north, the internal compass of his beliefs, values, and principles that guide him through life. Everyone is watching to see what the leader does,” George avers.
Crises will test whether he stays true to his values or not, bends over to outside pressures or meets them head-on, gets seduced by quick fixes, or sincerely performs short-term sacrifices in order to put in good order a long-term solution to the organization’s current state of affairs.
The Sixth Lesson: Effect needed changes even when the sailing is smooth. Along this line, Israel’s Benjamin Netanyahu, speaking at the Davos conference, gives this piece of good advice: “Never waste a good crisis.” It underlines the fact that when things are going well, organizations and people refuse to go along with major transformations or simply endeavor to cope with minor alterations. To this, George declares, “A crisis provides the leader with the platform to get things done that were required anyway and offers the sense of urgency to accelerate their implementation.”
The Seventh Lesson: Create the changes in the landscape in your favor. “Go on the offense: focus on winning now,” George advises. So often, he continues, “the go-to strategy for veteran leaders when a crisis strikes is to buckle down and ride out the storm. They don’t make any major changes. Instead, they wait until the climate is right to resume normal operations.”
Being aggressive during times of crisis may not be in accordance with what would naturally be assumed or expected, but the situation brings excellent prospects to alter the competition in your favor, with new products or services to gain new consumers and generate better market shares. George pronounces, “Many people look at a crisis as something to get through, until they can go back to business as usual. But “business as usual” never returns because markets are irrevocably changed. Why not create the changes that move the market in your favor, instead of waiting and reacting to the changes as they take place?”
Crisis, it is often said, presents both danger and opportunity. There are the dangers of threat and time pressure and the opportunities to think on your feet, bring people together and generate brilliant solutions to the problem at hand. George’s seven lessons provide precision and firmness that will enable your organization to emerge from the crisis a leader in any field or discipline faces.
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Bill George’s 7 Lessons For Leading In Crisis is available at National Book Store.