Leadership Barometer 18 Handling a Crisis

October 1, 2019

There are hundreds of ways to test the greatness of leaders.  Here is one of my favorite measures.

Handling a Crises

One easy way to measure the caliber of a leader is to observe him or her in a crisis. Great leaders take command, but do so in a special way that weaker leaders try unsuccessfully to emulate. In the first place, they have the ability to diffuse internal crises and avoiding a kind of mob scene where workers gang up on the leader.

The distinction begins even before the crisis is evident. It is a mindset. Average leaders take rest when things are going smoothly. They focus on the little fires and beat them down so they do not spread. Other than that, “if it ain’t broke, don’t fix it” is the mentality. We might as well enjoy the way things are going, since it is smooth sailing.

By contrast, the great leader sees the world as a series of calm times and storms, some of them hurricanes. The calm times are opportunities to sharpen our skills and reactions for the next storm. For sure, it will come, so we ought to be looking at our past successes or failures in prior storms to get ready for the next one.

In business, the character or timing of the next storm is far less predictable than in nature. For example, in late summer, we can expect several hurricanes to crop up in the Atlantic and work their way toward the mainland U.S.. Once they form, computer models can predict with various levels of accuracy if, when, and where the storm will come ashore.

Most crises in business are less predictable. Some trends can be tracked, but usually the big disruptive events are things that are impossible to forecast. For example, if we are manufacturing aircraft, we can plot the seasonality and long-term trends, attempting to anticipate peak loads. Then, a fire in the factory causes a crisis that is a total surprise. The impact of the crisis on our business dwarfs anything we had been planning based on market projections, yet we are forced to deal with it immediately.

Once the crisis hits, the average leader becomes unglued for a while. There are so many things to do at once, and triage in the business world is often a neglected skill, so the leader wonders whether to call a meeting or let the front line people work on the most urgent issues without interruption.

Communication channels have not been set up to handle the chaos, so instructions or intentions come through as garbled signals. Think of the first responders in the World Trade Center after the first tower fell. Instructions were not getting through to all responders, and many additional lives were lost because of it.

The average leader somehow manages to deploy an effort to fight the situation, but it is often meager compared to the proportion of the disaster. People wonder why there was not more specific leadership coming through when it was needed most. When a leader appears to be unprepared for the disaster, then there is a loss of trust.

By contrast, the great leader has refined the procedures for communication and action ahead of time. Even though the exact nature of the crisis is not known, the preparation phase is an ongoing high priority. There are often mock “fire drills” to practice damage control and hone communication procedures to be ready in case the real thing happens.

For example, a CEO might arrange to distribute a fake internal news release that the toy being sold by his chain was causing deaths in children. This would force people to react with everything from recalls, to insurance negotiations, to government briefings, to press statements, etc.

After practicing the mock disaster, they could hold a debrief meeting and might determine the internal communication between executives was practically nonexistent during the crisis. All of the managers were doing their best to keep a lid on the damage, but the total effort was not well coordinated. This debrief would allow the team to design an information dissemination process, so if a crisis ever surfaced, they would be in a far better position.

I know one college president who had to endure three different embarrassing public issues in just a few weeks time. None of the problems were caused by the president, and none of them could have been predicted, yet he had to deal with them in a way that upheld the values of the college and gave all stakeholders confidence that the institution was not out of control.

If you are the head of an organization, you need to be prepared for these kinds of disruptions. You know there is a comet or two heading your way, you just don’t know specifically what it will look like or when it will arrive. Warren Bennis, my favorite all time leadership author, put it this way:

Leaders learn by leading, and they learn best by leading in the face of obstacles. As weather shapes mountains, so problems make leaders.

The best leaders look at these kind of crisis situations as a way to test themselves and their teams.  The best advice is to keep practicing your response and communication methods. You cannot anticipate the nature of the comet that is heading your way, but you can prepare your team to deal with anything.


The Virality of Trust

January 17, 2015

SynapseI wrote an article a while ago about whether trust can scale. My conclusion was that trust does scale because it is measurable and has properties where it can grow or shrink.

The ensuing discussions between two of my good friends brought out an important nuance. Both Bob Vanourek and Fred Dewey came back with the concept that while trust can expand and contract based on what is going on, it is not linear at all.

A small increase in trust due to an action will tend to grow exponentially as the news spreads through cyberspace. Actions that build trust will become more powerful as a result of the viral nature of information.

Of course, the same phenomenon happens on the negative side. If a leader does something that has a damping effect on trust, that negative impact will become more hurtful as the information spreads virally.

So while the nature of trust is that it does scale, we need to be constantly aware of a “hockey-stick” situation, where one small misstep magnifies in time and in space.

I think this observation has always been true, but as we trend toward a greater percentage of information being conveyed virtually, the leverage increases.

There is an opportunity to intervene that may be helpful. When something unfortunate is done, and it is picked up on the social networks, the person who committed the sin is usually aware of the bad press. It is a kind of moment of truth where the damage is either made much worse or can be muted somewhat. This public relations problem can make or break a person’s reputation.

Let’s take a case as an example and dissect the likely outcomes. Suppose a CEO puts out a note to the senior managers that refers to some problem (unnamed) employees as “knuckleheads.”

One of the managers gets a chuckle out of the wording and elects to pass it along to a couple underlings as a joke. One of the underlings is familiar with a person who has been under scrutiny for some attendance problems. He writes a note to that person attaching the CEO’s message and asks “Wonder if you are one of the knuckleheads?”

That individual sends it out to everybody in his group, and the cascade is on. Within an hour, the entire organization knows the CEO considers some of the employees to be “knuckleheads.”

The CEO will quickly become aware, through feedback, that his note is out all over the plant. Let’s look at a few possible approaches for the CEO:

1. He can call a quick meeting with his senior managers to try to find out who leaked the information. That “Witch hunt” reaction is unfortunately pretty common, when the real witch was actually the CEO.

2. He can ignore the situation and let people calm down over time. That “head in the sand” approach is also a common ploy that only feeds the rumors of clueless leaders.

3. A better approach might be a humble apology where he admits to what is already obvious and indicates that his choice of words was inappropriate. Rather than try to justify what is already known (like… “we are under extreme pressure right now”), he indicates sincere regret and a desire to not repeat it.

You be the judge of the outcomes under these scenarios. Perhaps you can think of other methods of handling the situation.

Undoubtedly the best cure would be prevention where the CEO would not send a note like that in the first place.

Even more important, would be to have a CEO who does not even think in terms where he or she has to guard his wording so the spin comes out right. If your private thoughts show the proper level of respect and trust, then you do not have to scrub your communications. You are free to be authentic.

Of course this example was a small situation that was contained within one specific organization. Many times people get into trouble when they communicate inappropriate things about people outside the organization, like customers, insurance companies, the government, law enforcement, or any number of other situations.

These lapses can lead to embarrassment, loss of one’s job, jail time, or worse. When people compromise trust in any type of communication, there is no telling how much damage will ensue.

With the growing percentage of communication happening in the online environment, it is time to redouble efforts to phrase things correctly at the start and avoid embarrassing slips. It is also important to check our personal self talk to ensure our attitudes reflect a trustworthy rather than duplicitous person.