LEADING THROUGH CRISIS
Decision-making in the fog of crisis
APRIL 8, 2020 | BRENDA VAN CAMP
Business-as-usual went out the door about three weeks ago. Yesterday’s assumptions no longer apply and, we haven’t the foggiest idea how all this will unfold. So how the heck do you make the right decisions when things are so unclear? Well, in this week’s post, we’re providing you with a 6-step roadmap for smart decision-making in uncertain times.
Table of Contents
Hold your horses!
For us to make any smart decisions on how to respond to the impact of COVID-19 we first need to know exactly how this public health crisis is impacting our industry on a macro level and organization on a micro level. We have to resist the urge to focus on the knee-jerk reaction of “doing something right now” and instead, take the time to get a firm grasp on what’s happening, what we know and how this will impact our employees, our customers, our supply chain, our competitors, and even our regulatory environment. To do this, we recommend creating and maintaining a running fact sheet for each of these stakeholder groups. On this fact sheet, answer for each stakeholder group the following questions:
- How are they affected by the crisis?
- How does that impact their role in our business?
- What are the likely consequences of that?
- Can we quantify, even if just a best-guess estimate, the impact and consequences?
When developing these fact sheets, we have to take great care to discern rumor from fact by verifying our facts through multiple reputable sources. Remember that we never have all the facts immediately and rarely at any one time. We need to be keenly aware of all that we don’t know yet and keep re-evaluating the facts as the crisis unfolds. Lastly, we need to resist the urge to immediately jump to ideas on how we can remediate some of those effects or consequences. In a crisis, not all impact and consequences are created equal, and we have to prioritize ruthlessly later what to focus on remediating first.
Using such a structured fact-finding approach with your team to create a clear and shared mental map of the new environment will provide a critical foundation for your ability to lead your team expertly through this crisis. It shouldn’t take more than 90 minutes-2 hours to work through this. Skip it at your peril.
Use history to provide perspective
While this COVID-19 health crisis is a rare event, it can be very instructive to look back at how previous external shocks impacted your organization and other players in your industry. What lessons can be learned from how your organization and industry were affected and how you or someone you admire responded to it? How did customers respond? How long did it take for things to stabilize? What measures did your organization take in response to the crisis? What measures did competitors take in response to the crisis? What worked? What didn’t work? In hindsight, what could have been done better?
For example, if you are in the airline industry, it might be informative to look at how long it took for people to start travelling again post 9/11. And what did it take for your organization to implement the new security protocols to both prevent future attacks as well as help make people feel safe again?
In these uncertain times it behooves us to heed the words of writer and philosopher George Santayana:
“Those who cannot remember the past are condemned to repeat it.”
Harness the collective wisdom
The fall-out of the current health crisis will impact your industry, organization, and function in many unexpected ways. And not one leader can grasp all the repercussions alone. This is essentially a vantage point issue.
To lead effectively through this uncertainty, you’ll need to talk things through with people who have different perspectives. And we don’t mean just talking to your peers at the same level from across the organization as none of them are on the front lines. To really know what’s happening, talk to people in your industry, organization and functional departments who are in direct contact with customers, vendors, regulators and other key stakeholders .
Only then can you learn how these stakeholders are affected by the crisis, how they are reacting to it and how it changes their need for and expectations of your products or services. As Andy Grove put it in his seminal book “Only The Paranoid Survive.
“The more complex the issues are, the more levels of management should be involved because people from different levels of management bring completely different POVs, and expertise to the table.”
To do this effectively, help everyone shift from discussion to dialogue and debate. This is not about pitting people with different ideas against each other and seeing who wins the discussion as not one person has the “correct answer. This is about using dialogue to leverage the combined brainpower of all relevant parties in order to compare, contrast, and elicit different viewpoints and arrive at the best possible set of options under the existing circumstances.
Note, however, that engaging people in dialogue is hard, because it requires us to
- Push away our inherent biases and really work to see things with new eyes
- Be willing to be influenced by the contrary opinions of others to gain a broader perspective
- Question our existing assumptions
- Have the courage to speak our truth irrespective of other influences
- Replace our underlying desire to win with a desire for continuous learning
Even under normal circumstances, maintaining impartiality and objectivity requires emotional maturity and effort. Given the heightened stress levels of today, it will likely prove even more difficult.
As a leader, you need to safeguard the conditions for good dialogue. Call people out when they become defensive when someone’s different viewpoint challenges their beliefs, assumptions, or opinions. Make it safe for everyone to honestly share their views without having to fear being disliked, looking stupid, or being seen as a troublemaker. And help your people to stay open to looking at things through many different lenses by stopping them from looking for the “one right viewpoint.”
Find & talk to the “Cassandras”
To successfully think differently, identify and engage with what Andy Grove terms “The Cassandras” in your organization, industry, or department. Cassandra was the priestess who predicted the fall of Troy.
Similarly, there are people in your organization and industry who have a knack for foretelling what a particular set of changes in your environment might represent. Those are the people you want to listen to right now to challenge your thinking about what these changes might mean for your industry, organization or department.
In addition, also keep an eye out for articles in the press that explore what life after this health crisis may look like. Our favorite so far is this article by Politico Magazine which surveyed more than 30 smart, macro thinkers to explore how the current health crisis might reshape society in lasting ways
Develop a plan and back-up plans
As things are in flux and the consequences uncertain, it is critical to recognize that there is no such thing as “the right strategy.” Instead, prepare for what the response should be under different scenarios.
To build good scenarios, first consider what the key factors are that could affect the future outcomes for your particular business, industry or department.
For example, one set of scenarios might look at how the demand for your product or service will respond during and after the crisis. And , what if the crisis lasts another 6 months or a year? Another set of scenarios might explore how customer needs for and expectations of your products or services might change in response to the crisis. And lastly, you may want to build a set of scenarios that explore what you would do if some key components of your supply chain were affected during and after the crisis.
Once you have determined the key factors, it is useful to limit yourself to 3 scenarios for each set: a most likely, less likely, and least likely scenario. Avoid the temptation and folly of thinking every possible scenario can be covered. It will lead to too many scenarios, unnecessary confusion and worst of all, decision paralysis.
Once the scenarios are developed, determine what might be the best response to each of them, and decide what leading indicator(s) would signal to you and your team that you need to deploy each particular strategy- i.e., establish and agree on action triggers.
Don’t be a wimp! But don’t bet the farm either
In a crisis most options are unpleasant. As a result, one frequently made mistake in times of crisis is that leaders shy away from making the necessary hard choices because they just don’t have the stomach for it. They forget that no choice is a choice and hardly ever a good one.
Often, they opt for the easier and less unpopular decision with suboptimal outcomes. In the long-run, these suboptimal decisions will come home to roost, as the business won’t recover as well as it should, requiring repeated subsequent corrective actions.
To avoid this pitfall head-on, accept that there are no easy ways out of this crisis and that being a good leader means doing what is best for the greater good, even if that makes you personally unpopular at the time. (The timely example of Navy Captain Crozier comes to mind. He dared to speak up in order to save his crew at the expense of risking his stellar career.)
So don’t be a wimp. Yet, at the same time, know that this is also not the time to make significant strategic commitments one way or another. Instead, you want to place small sequential bets that minimize your potential downside and maximize your potential upside. This approach allows you to learn what works and what doesn’t during this untested time. Eventually, with the cumulative benefit of more information as our new normal slowly unfolds, you’ll be better able to determine your next set of bigger decisions.
The Agony of Decision, mental Readiness an Leadership In A Crisis, by Helio Fred Garcia