20 May Crisis Leadership – What Now?
Last month a guy named James Adducci laid down an $85,000 bet in Vegas that Tiger Woods would win the Masters.
He pocketed a cool 1.19 million on his bold gamble.
Talk about hutzpah!
I’m not too skilled at the fine art of gambling. I’ve always sort of figured there’s a reason for the high-rise casinos and the glitz of Vegas – it’s because “the house” always has the edge.
But here is a sure thing I would put big money down on – I’ll comfortably predict that somewhere in the United States – of the approximately 18,000 companies that have 500 or more employees – at least one of them will endure either a brand recall, an unanticipated drop in earnings, a significant employee restructure, or become involved in either a merger or acquisition over the next 12 months.
Think I could get “action” on a bet like that?
Not likely. Even the most avid gambler wouldn’t touch it. It’s like betting the sun won’t rise tomorrow.
Like death and taxes, all companies will eventually encounter “bumps in the road.”
What I could get some money churning on is what happens after any of those disruptions above – and I could potentially pocket a lot of change.
In many cases I would bet the “under” – because many organizations stumble when crisis arises. They wobble like a Mike Tyson opponent circa 1989.
As that controversial pugilist said then, “Everybody has a plan until they get hit in the face.”
The ability to take a punch often comes down to one thing with many companies – the quality of its leadership.
Many are lacking there – convinced their management team can bring them back to status quo – even when the status quo just got blown up. Their plans are built on a future that no longer exists.
When trouble rides into town an attempted return to normalcy may be the worst path.
A long time ago – and after a major organizational restructure – I was contemplating how, in my role as a people leader, I could help my company regain its footing.
Employees were shell-shocked – frightened – uncertain of their future.
So was I.
I resolved to get things back to status quo quickly and efficiently. We would conduct town hall meetings, small group focus panels, a series of 1:1s – all focused on getting people “back.”
And then a trusted senior colleague shared something with me that in all the years since I have never forgotten.
“Tim,” he said, “There is no getting back to normal. Normal is gone now. You’re struggling to help everyone to status quo in a world that has no status quo.”
That made no sense to me. “So, what….we do nothing at all and hope people find their way?”
“No,” he responded. “You confront the new reality. You change your definition of normal…and you drop some of the “corporate think” that every company pulls out after a bomb blast.”
“Such as?” I asked.
“Here’s a couple,” he offered. “The standard prescription for next steps usually goes something like this.
- First you bring in an HR partner (or an outside consultant) to engage people on how they feel
- Then you flipchart reams of feedback so we can capture those thoughts and employees can read them back
- Then you resolve “this will never happen again” and you effectively tell people to “go back and do your job.”
I pushed the notes I had planned for my next meeting aside. He had just outlined every step perfectly. I paused to consider that my plan was pretty much the same tack we had taken some 18 months before – just after the last restructure.
The New Normal
Over time I was to learn that the urge to restore balance after what some might call crisis or catastrophe is natural. There’s a bump in the road and we quickly swerve to get the car back to the middle and away from the next one. That’s what leaders are supposed to do – right?
The only problem with that is there will inevitably be another bump.
Overcorrecting doesn’t always help make it better – and it might make the next jolt more difficult to handle.
The insight I finally gained – my challenge in a formal leadership position was in helping others to embrace the uncertainty of our world – not hide our faces and deny it.
The Myth of Status Quo
I wished there was absolute certainty in my business world. I wished the Easter Bunny was real and those chocolate eggs I got as a kid still came every year too.
Confronting the reality of … reality is not easy. In his book, The Five Dysfunctions of a Team, Patrick Lenceoni calls out one of the common maladies that afflict organizational collaboration – beginning with the foundational element of loss of trust.
Companies who have experienced a restructure or a downsizing are rife with it.
“I don’t believe in this place anymore.”
“My job is now slowly ticking away.”
“I’ll be next.”
The Role of Authentic Leaders
Which carries us back to what and how formal people leaders should measure their actions – because it’s at these moments of organizational vulnerability that we can see the distinct differences that will dictate future success – or failure.
When I work with companies – and leadership teams – to lead through organizational crisis we begin with some basic tenets. In the case of restructures and downsizings we also challenge the perception that getting people back to “where they were” is always a healthy endeavor. A few of the core pieces:
- Tenet #1 – Outline in clear terms why the company was forced to make changes. This means dropping the corporate speak and outlining the dollars and cents rationale that speak to profitability – and long term sustainability. Victims are made into victims by companies who decide their constituency can’t handle the truth – I know that it took me a long time to appreciate professionals who are treated like professionals are capable of much more than C suite executives sometimes want to believe.
- Tenet #2 – Address the human component – allow people to grieve. Survivors’ remorse is real – and ignoring it will only add to the emotions. One of the best leaders I ever met began an address to her team after a cut-back by effectively saying, “It’s going to take me some time to get over all of this.” Powerful.
- Tenet #3 – Acknowledge the imperfections of the process – to include the company and its personnel. No restructure will be perfectly fair. We live in a world that falls short. It’s OK to say it. It’s even better to share that sentiment openly. If we were perfect there would not have been a cut-back in the first place.
- Tenet #4 – The only way we will get through this is if we make the decision to get through it together. Unfortunately, almost every downsizing impacts good people in some way. Those left behind naturally scramble for safety – effectively asking the company to assure them this will never happen again. Weak leaders scurry to make people feel good – and often offer empty promises they can never keep. Transformative leaders instead ask questions that engage. A classic example – “What can WE do to minimize risk for the future?”
- Tenet #5 –It’s OK not to trust – my faith has been shaken too. Now, this is what we’re going to do about it. Powerful leaders don’t run from crisis – they embrace crisis. One of the most potent ways to do that is by ratcheting up open communication. Share more – not less. Specifically:
- Talk about the state of the union – progress and opportunity
- Call out gaps and weaknesses – areas that offer concern – and ask for help in addressing them
- Create forums for dialogue. Get people talking – and enroll them in solutions, not problem recitation
- Ask for feedback
- Tenet #6 – Rebuild organizational identity and purpose. The “old” is gone…. the new reality is now here. The companies that win embrace the future while remembering the past. Great leaders work hard to re-craft “who we are” and “why we have assembled.” As Gallup CEO Jim Clifton points out in his book It’s The Manager, truly outstanding companies commit to crafting a culture that will grow. Restructures can deal a heavy blow – but resilient organizations – those with a sense of identity and purpose – can weather the attack and move forward. The lynchpin in all of this – the quality of the company’s leadership. Even in the best of times only 41% of employees agree they really know what their firm stands for – a frightening number.
- Tenet #7 – Take the first critical steps. As a consultant and executive coach I invest a lot of time talking about the power of:
- Constancy of Purpose
- Integration of Action
- Shared Ownership
Each of the above is a foundational component of teamwork. A leader’s challenge is to affect action – not deliberation. After a downsizing managers are tasked with moving employees through a continuum – that continuum requires each leader honestly answer questions all of us have – and often never get answers to:
- Do you actually care about me – not just profits?
- Can I trust you – or this company – anymore?
- Are you credible – is what you say valid or simply more of the “same old same old”?
- Are you really committed to the future – MY future?
- Can you help make me better along the way?
It was the Greek philosopher Socrates who supposedly once said, “The only thing I know for sure it that I know nothing at all … for sure.”
Managers don’t offer guarantees for the future – they enlist others in building that future.
The gamble for most companies dealing with crisis begins with what they expect of their leadership – and whether those leaders have the courage to truly let go of the past to venture forward.