I recently facilitated a workshop with several CEOs where we worked on the dramatic business growth model components. One of the questions that I had asked them beforehand was, "What is Your Profit/X?" The results showed that there this concept is not clear to many....
How a leader responds to a crisis defines them. During a crisis, there is uncertainty, confusion, and fear. Do they panic like Francesco Schettino or lead like Ernest Shackleton. What should you do? Great leaders can balance getting things done with inspiring and empowering others. Those leaders who are highly task-focused tend to have tunnel vision in their drive for results and ignore the needs of the organization. Leaders who balance task- and people-focus are equally driven and while striving for results keep the broader organizational needs in mind. They also recognize that it’s not just about being efficient — it’s about being effective.
In a crisis, effective leaders need to communicate facts, layout a plan and lift morale.
Before you can deliver the circumstances, you need to figure out the situation. Once that is done, you can define reality for the team and manage expectations.
Figure Out the Situation. Listening to Commander Kirk Lippold speak about the attack on the USS Cole, it was evident that while his crew knew how to perform in a crisis, this was something no one had expected. It was critical to figure out the actual situation on the ship. The key to figuring out the response was to get status reports for his officers. The same applies to business when a crisis hits; it often best to assign the responsibilities of determining the actual and expected situation to key employees and then calling a subsequent meeting to update everyone. Doing this helps impose order on a chaotic situation and creates greater clarity.
Define Reality. Your employees are amazingly able to deal with reality even if it has a significant downside. It’s the unknown that is paralyzing. A leader’s job is to bring the facts about “exactly where we are” to their organization and teams. However, in communicating, it is best to be honest and humble. Failing to be accurate leads to a credibility gap between official reports and the truth, as was reflected in the “Five O’Clock Follies” and what is and current White House briefings.
Manage expectations. When a crisis hits, people want it to be over immediately! However, there is seldom a quick resolution, especially when faced with a situation like Covid-19. It falls to the leader to address the size and scope of the crisis. You don’t want to alarm people, yet do not be afraid to speak to the magnitude of the situation. If you don’ t know the full extent, be honest but present what is known. As Winston Churchill said in 1940, “You ask, what is our aim? I can answer in one word. It is victory; victory at all costs; victory in spite of all terror; victory, however long and hard the road may be, for without victory there is no survival.”
Provide Continual Updates. People want to know, “How we are doing.” Thus, provide regular updates to the team on where the company is, the gains that it has made, the challenges that it faces. With more knowledge, your employees will feel more comfortable and better able to help you.
Demonstrate Control. During a crisis, control is hard to gain, but a leader must assume it. While the leader cannot control the disaster, they can control the response. A leader brings the people and resources to bear that will deal with the crisis. While the situation may seem uncontrollable, showing leadership with a great team creates control.
Lay Out a Plan
Keep loose. Not only does this apply to your demeanor, but a leader also can never afford to lose composure, it refers to the leader’s ability to adapt rapidly. All great leaders have shown this trait. In crises, things change quickly; thus, success is the ability to change quickly in response to the environment. Your first response may not be your final response, and the leader cannot be tied to a single strategy. In the immortal words of Mike Tyson, “Everybody has a plan until they get punched in the mouth.” Leaders must absorb new information, listen carefully, and consult with the frontline experts who know what’s happening and determine the appropriate strategy. Shackleton’s great trait was adjusting his plan as things changed.
Focus on Strategy. Many senior leaders believe this is a time to pitch in and help with the heavy lifting. However, not necessarily, the leader’s primary role is setting the strategy. If they are engaged in the front lines, then who is setting the vision? If you, as the leader, enjoy doing that hands-on work and the adrenaline rush that comes from direct action, Sorry! That is not your job anymore.
Delegate. In a crisis, there are just too many decisions for the leader to make all of them. If the leader has to make all the decisions, reaction times slow, and by the time the decision has made its way up and down the organization, the environment has changed. Instead, leaders define the challenge and strategy and then delegate decisions down the organization. As David Marquet says, “take the authority for making decisions and push it down to the people with the information.”
Provide Perspective. Generals and battle commanders are rarely in the front line because they need to see the bigger picture of the entire battlefield and the conditions that can affect each area so resources can are deployed more effectively. Those leaders who can engage directly, but still maintain their sense of perspective, are the ones that will help the organization survive.
You need a new baseline. During times of crisis, people at all levels of an organization can become fixated on what we lose, bonuses, jobs, promotions, etc. Now all bets are off. Focusing too much on what people have lost prevents concentrating their energy on the “new normal.” During these times, it is not the time for “woulda, coulda, shoulda.” Letting go of what could have been is a crucial first step to being focused on success in the new environment. Shackleton continuously had to do this as conditions changed for his team.
Use urgency as an ally. Gravity tends to focus the mind, thus use it accelerate your efforts to analyze and act on problems instead of wandering around them. Appropriately used, urgency, can frame challenges better, get people engaged in a deeper understanding of the issues, and equip them with the responses necessary to be successful. It is a powerful unifying force.
Check-in routines. Now, most employees are working virtually, staying in touch with your people is more important than ever. Set a routine of 15-30-minute check-ins every day is essential crucial than ever. Since no one is commuting, this time is now available. These interactions provide opportunities to share updates, highlight the latest critical information, and identify adjustments that are required. These check-ins reinforce that we are responding together to the challenges the organization faces.
Celebrate all victories. Give recognition of the adaptive actions that get positive results, especially when people are adjusting on the fly. Don’t over-hype the small gains but use them to show how each gain gets the organization closer to the goal.
Opportunities. The Chinese word for crisis is composed of two Chinese characters signifying “danger” and “opportunity,” respectively. Create “opportunity scouts” within the organization. If the employees know the current challenges, get them involved in imagining a response and a recovery plan that creates value in the current environment. When facing essential threats, people always see more opportunities. Your team’s ideas for surviving on both the cost and revenue sides of the business are often better than what you can implement on their own.
Great leaders see the bigger picture that more than money is at stake; that people must put themselves and their loved ones ahead of business needs?
Concern for employees. Great leaders care about their employees as people first and workers second. That distinction is not noticeable during a typical workday, but it becomes critical during a crisis. It’s important to acknowledge and validate how your people feel, as they’re often operating in survival mode – a natural “fight or flight” response. But fight (anger) of flight (escape) reactions keep us from acting on our opportunities. Ignoring how your employees feel will only magnify these feelings. For employees to see that management cares about them, they need to understand the “why” behind the decisions. Thus, the CEO needs to overcommunicate when sharing information about the choices they are making. If you watched Chernobyl, you will have seen when they had to ask employees and others to volunteer for things that the employees knew would kill them, the employees would do so if they knew why. However, once the rationale was explained, the employees volunteered. As Ben Horowitz says in The Hard Thing About Hard Things, “Take care of the people, the products, and the profits — in that order.”
Appeal to a Common Purpose. Effective leaders convince people to want to take action–and that requires appealing to a common purpose. If you just tell them what to do, you get little buy-in. A great example was Governor Cuomo’s speech on social distancing on March 22. Angry after seeing large groups of people congregating in New York City parks and not following social distancing instructions, he said, “This is just a mistake. It’s insensitive. It’s arrogant. It’s self-destructive. It’s disrespectful to other people. It has to stop now. This is not a joke, and I am not kidding.” However, this would unlikely to get the response he was looking for, so he reframed the challenge as a once-in-a-generation opportunity to get better, stronger, and more resilient. “America is America because we overcome adversity and challenges…and that is what’s going to make this generation great,” he concluded.
Focus on the Greater Goal. For companies that have followed the Chicago School mantra that they exist only to make money for shareholders, a focus on the goal is unlikely to gain much traction during a crisis as most employees don’t care. However, if you defined the Company’s purpose for existing on the following four criteria:
1. Focusing on the impact on the world and people;
2. Is not centered on the financial gain;
3. Is something unattainable; and
4. Rallies employees
You are more likely to enable employees to remain committed during this period of uncertainty and fear. Also, it allows your employees to rally around the goal to help the community and others at this time. An example of such a purpose is “To refresh the world, to inspire moments of optimism and happiness, and to create value and make a difference.” [Company is identified at the bottom]. I recently heard of a CEO of a who claims that Covid-19 is Democratic Hoax to damage the President and as such has not implemented social distancing or changed behaviors at his office where everyone works in close proximity. His workers are now comping down sick. When this is all over, no one with integrity will want to work at his company. Some have argued that it is irrelevant as there will be many unemployed, so you will quickly fill job openings. However, who do you want on your team? The best employees, with integrity, and belief in your organization, or just the flotsam and jetsam of the labor market?
Empathy. In crises, bad things happen to good people. Some people who did everything to be safe will get sick, and some will die. Great leaders have empathy; however, they realize that going through hard times makes people stronger. Thus, they provide support and care while encouraging those people to push on. By doing this, leaders get people to invest in themselves and learn how they respond to events that contribute to the outcome. Furthermore, investment in your people during such times creates better networks, community, and belief in the organization, which makes these employees more valuable to the team when things return to normal.
Community engagement. Every company is part of a broader community. Employees often live in subdivisions or apartment complexes. Their children go to schools. If they get sick, they go to a hospital for care. While companies in discretionary industries are in danger during a pandemic as sales fall, they are still a crucial part of their communities. If they rise to the challenge by giving back through donations, public service videos, or contributing resources, they can prove that they are an essential part of the community. It will help them gain more loyalty as crisis recedes.
Answer: Coca Cola
Copyright (c) 2020, Marc A. Borrelli
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