Managing a company in times of crisis comes with a fair share of discomfort, but actions taken at the right moment—with the right mindset—are crucial for the business’ sustainability.
2020 has been a great management school.
I love crises: they promote change and always teach valuable lessons, while also surfacing great opportunities. Nevertheless, like any transformation, changing course never comes without pain. Even at times of peace, managing a company is complex and stressful, particularly in fast-scaling organizations. A global crisis further accelerates the pace and compounds the complexity to breathtaking levels.Here are some insights gathered while facing the Covid-19 pandemic, and informed by previous corporate crises with which I’ve dealt.
Crisis management is all about the team
Like all things management, it all boils down to the team. As the legendary business coach Bill Campbell advised, “work the team, then the platform.” That is, rather than focusing on the technical problem at hand, focus on the team that can solve it—they will devise the right solution.
Focusing on the team means two things:
1. Make sure the team understands the situation and the tasks they are required to deliver.
2. Make sure the team is engaged, armed with the right resources, and has your backing and support.
Accept that things are worse than we would like them to be
Hope is a basic human protective instinct, but it creates cognitive biases such as underestimating danger. In complicated, dire situations, we have a tendency to reject action, triggered by a mix of wishful thinking (convincing ourselves that everything will be OK because this is what we want to believe), procrastination (postponing action until things “clear out”) and fear ( ignoring the imminent danger because it’s too scary to face the possible repercussions).
But the wall is there. Ignoring it or waiting for something to happen will not miraculously remove it. If you don’t hit the brakes at the right moment early in the game, you will hit it head first.
It is hard to pull the corporate alarm bells and hit the brakes, since it contradicts the organic instincts of a growing business—charging forward, seeking growth, and seizing opportunities with momentum and zest. This was especially true for us, as we had thrived over the past decade, experiencing extreme prosperity. It takes real leadership to shift gears, pull the brakes, change course, redirect resources and make budget cuts.
Many business leaders refused to acknowledge the situation in March 2020, despite the red lights and alarm sirens out there. It was uncomfortable and unpopular to take actions that had been outside of the consensus just weeks before.
Keep eyes open to the horizon
Even under attack when the team is in strong defense around the basket the captain is looking ahead for the right moment to rebound and charge.
In business, for my opinion survival is not viable strategy, I always play to win. While the majority of the teams were working on fortifying the defenses, we kept some teams free to explore opportunities, tactical and strategic ones, we obviously don’t have the capacity to captivate all opportunities through the crisis but we had prepared, planted seeds and kept pushing forward, it means that we will be ready to spin out of the curve pushing the throttle.
In times of uncertainty you can’t really know where you are in the curve, are markets heading up, down, technical corrections etc. that’s why we need to prepare, stormy weather never last forever.Keeping some offensive mindset also help engage the team, people want to know you are playing to win.
Taking action in times of uncertainty
Uncertainty can be lethal in business, causing anxiety that quickly spreads through the organization’s leadership, and hence, compromises effective decision-making processes.
Fortunately, there are several things we can do to mitigate the toxic repercussions of uncertainty. Like many things in life and business, the first step is to recognize the facts and face the situation.
1. Acknowledge the unknown unknowns
In 2002, the United States Secretary of Defense Donald Rumsfeld gave his famous speech about the lack of evidence tying Iraq with the supply of weapons of mass destruction, coining the phrase “known unknowns and unknown unknowns.” Likewise, in the 2020 Covid-19 crisis, we found that while we have some insight into the unknown pieces of the puzzle, we are no doubt blind to many other factors. This realization should neither paralyze nor discourage us. It just means that there are more probable futures, requiring us to take more educated guesses. We also have to acknowledge the possibility that in a few months time, looking back to where we’re at now, we will realize that we overreacted in some cases. This doesn’t mean we were wrong: we took the right decision at the given time, informed by the data that was available to us.
2. Maintain agility
Leadership is rightly often associated with clarity: a clear push towards a clear goal with clear messaging—the ship captained by a savvy leader, well-equipped and fully knowledgeable to navigate the sea.
Yet the last couple of months have felt like steering a ship through stormy weather without proper navigation tools. We constantly have to adjust our actions and shift our focus. For the bystander, it may seem a little chaotic, but it’s not: we adjust and readjust all the time according to the most recent available data. As we constantly use every sense we have to direct our actions, the rapid course-shifting requires enormous trust from all involved: the leadership team, employees, shareholders, etc.
3. Employ constant communication
Early in the process we understood that while we executive leaders are in the cockpit and have constant and full view of all gauges and levers, our teams are blind to most of the data and often experience anxiety. The best mitigation is constant and candid communication: have the management update the company as often as possible, giving a balanced and authentic analysis of the current status, and reflecting the management’s view of the future.
Frank communication of both the good and bad, revealing the threats and sharing the actions of mitigation, is much better than leaving your team blind and worried, playing needlessly catastrophic scenarios in their heads.
We have no control over the eruption of the pandemic and its medical and economic repercussions worldwide, but we do have control over our choices and actions. Companies that manage to successfully maneuver their way through a massive crisis as this one will come out stronger and more resilient than ever.
It’s up to their leaders to make sure that they do.