Successfully Leading People Through Crisis, Stress, Fear, Anxiety, & Chaos - Pt. 4
Of course, it’s not easy to stay focused and positive in a crisis - but that’s what leaders do. Interestingly, a crisis changes very little about the fundamental principles of leadership, other than making their presence or absence more obvious.
Recently I’ve shared with you a few great stories of survival in extraordinary circumstances: Ernest Shackleton in 1915, the Navy Seals perspective on fear, and Freddy Spencer Chapman in the jungle in World War II – all very inspiring examples of leadership in difficult circumstances. Click here to revisit these powerful stories.
But the real question is: how do we apply those powerful lessons into successfully navigating our businesses through this remarkable Spring of 2020?
Andy Grove from Intel puts it this way:
“Weak companies are destroyed by crisis, good companies survive crisis – but great companies are actually improved by crisis.”
So let’s think now for a few moments about how we can not just survive, but actually flourish in this challenging season. Here are some thoughts as we transition from Shackleton surviving a two-and-a-half year Antarctic journey to you thriving in your business during these unique times. We’ll start by going back to 1929, and the Great Depression.
I’ve done a little digging into how companies emerged from the Depression and during that investigation, I came upon these three gentlemen who did similar research, which they published in Harvard Business Review – shortly after the Great Recession of 2009! The parallels from 1929 to 2009 to 2020 are quite dramatic and very instructive. Meet Ranjay Gulati, Franz Wohlgezogen, and Nitin Nohria.
Great military leaders, of course, are keenly aware that how they fight the war will determine if, and how, they will win the subsequent peace. The research as presented in HBR from Gulati, Nohria, and Wohlgezogen indicates, not surprisingly, that business leaders in the heat of battle, like generals, can be so busy tackling short-term priorities that the big picture can become obscured by the fog of war. (Interestingly, after the 2009 Recession, their article references “the new normal” – where have we heard that term recently?) A few important revelations from their fascinating research that have clear application for us today:
- Businesses that simply cut costs faster and deeper than others don’t necessarily survive - in fact they have the lowest probability of later success when times get better. Too intense of a focus on cost-cutting causes a number of destructive problems downstream.
- But - those businesses that boldly invest in growth and acquisition in the hopes of taking advantage of bargains don’t fare any better! The opportunistic growth leaders were often toppled by the longevity of difficult times.
- The winning formula was found in those businesses that mastered the delicate balance of both judiciously cutting expenses and also making an emotional, cognitive, and financial investment in getting better at their core business. They reduced costs selectively by focusing more on operational efficiency than simply slashing for survival. But at the same time they invested thoughtfully for the future by finding ways to provide a better business offering in their product or service. They invested time and energy in training, staff development at all levels, process improvement, culture, and the experience created for employees as well as customers.
Here’s the author Patrick Lencioni:
“The most resilient companies focus on organizational emotional health because it maximizes corporate intelligence and creativity.”
Now as you consider your plan to build a reimagined future, I’d like you to meet another uniquely perceptive thinker who may help in your creative process: this is Rich Karlgaard, publisher of Forbes magazine, and his exceptional new book The Soft Edge.
Mr. Karlgaard has some fascinating insight regarding how some companies actually flourish in disruption. His book describes three fundamental elements that combine to create business outcomes: strategy, the ‘hard edge’, and the ‘soft edge’. Strategy, of course, is the overall blueprint outlining where we are as a business, where we’re going, and how we’re going to get there.
Hard edge elements are capital efficiency, expense management, logistics, process management, supply chain, inventory controls, data management, information technology, etc., etc. The language of the hard edge revolves around numbers, money, and time – all easy to quantify, and with a reasonably fast and visible return on investment. However, Mr. Karlgaard cautions us that while hard edge strength is absolutely necessary to compete, historically it provides only a fleeting advantage.
Soft edge elements are much harder to measure because they’re very abstract, ambiguous, and muddy by nature. The soft edge elements revolve around how we relate to people, how we develop people, the values we live, the culture we create, how we treat each other – in short, the experience we create for employees as well as customers.
The problem, according to Karlgaard, is that “far too many companies invest too little time and energy in soft edge excellence.” His research indicates clearly that companies strong in the soft edge have better brand recognition, higher profit margins, greater customer satisfaction, and better employee retention. And here’s where things get really interesting relative to the world today and echo what we learned from the article in HBR:
“Companies strong in the soft edge are simply better prepared to survive cataclysmic disruption…”
So we learned how to survive from Shackleton, Navy Seals, And Feddy Spencer Chapman. Now, in order to flourish, we need to have a fierce focus on two simple things:
Getting better at what we do.
Getting better at the soft edge.
From the author Everton Hills:
“All greatness teeters on whether the warrior overcomes the terror within and advances regardless…or not.”