Effective leadership teams maintain their planning rhythms through crises to keep a clear head and act decisively.
First, a little perspective.
Dear diary, Monday, March 16th –
Boy was today ugly.
4pm ET: Just finished watching the Dow Jones Industrial Average drop about 3,000 points from my home office “command chair.”
My news aggregator screams headlines that big states and cities have banned gatherings of anything larger than a few dozen people. Schools and universities are closed for weeks, airlines are shrinking flight schedules and there isn’t a bottle of hand sanitizer as far as the eye can see.
If these are the only kinds of developments that fill your field of vision during times of high stress, your view of the business will narrow. Business decisions are likely to be entirely defensive – and your 1- and 3-year plans could be set aside indefinitely.
Sometimes a crisis creates opportunity
If history is any guide, walking away from your plan and giving into the uncertainty of a crisis could be tragic.
Take a look at this chart.. It shows how the financial markets, represented by the Dow Jones Industrial Average, reacted during the 4 greatest economic crises of the last 35 years:
Although I admit it’s an oversimplification, you can see that if you stuck with your investments when the market looked most bleak during each of these landmark crises, your returns would be, at worst -26%, but otherwise would up 513% and 308%.
While adjustments may be made along the way, fortune favors those who stick to their plan.
Clients: To cancel or not to cancel
Sticking to your plan is even more important now than ever. Most experienced leaders have learned that reaching out to grab opportunity while everyone else is retreating could lead to a long-term quantum leap in performance.
As the great investor Warren Buffett has said:
“Be greedy when others are fearful and fearful when others are greedy”.
Of course, “greedy” is a strong word, and what he meant was to be opportunistic. In his case, stocks – to bet on the company.
Are you betting on your company?
Some of our EOS® Implementer colleagues have shared that some clients are unsure if they should to cancel or maintain their quarterly planning meetings, or if they should hunker down.
Along with my partner implementer Dave Borland, here’s our take on it
EOS® clients should understand that the effects of the current crisis haven’t really hit us yet – but it will. 90 to 120 days from now, if public health officials are correct, we will truly feel the effect of this crisis.
So, our message is that we have the next 90 to 120 days to get the leadership team and the business focused and clear on how to navigate the conditions to come. Perhaps you can even get positioned for opportunities that other, less prepared companies may not see.
Your quarterly planning meetings are how you achieve a crystal-clear vision of what needs to be done and when. It’s how you reinforce your accountability and execution discipline to make the potentially very difficult decisions the lie ahead. And you’re most likely to emerge with a more healthy, cohesive team that is better than ever in their communication and ability to work together.
EOS® 90-day check ins are the essential tool for stepping away to avoid “brain fog” that affects even the best business leaders during times of crisis. They help ensure you are assessing the situation clearly and thoroughly – thereby evaluating potential courses of action and summoning the courage to act decisively.
Why you need to take a breath – especially now
Our brains can work against us.
Dr Paul Gibson, Senior Lecturer, Graduate School of Business and Law, RMIT University, Melbourne, Australia writes:
When confronted with an emergency, the human brain can behave in a way that seems rational but may in fact be disastrous. Understanding our thought processes and brain behavior can help us make positive decisions in a crisis.
In addition, a survey of 1,334 people by VitalSmarts, a top 20 leadership training company, determined that at least 1 out of every 3 managers can’t handle high-stakes, high-pressure situations. Specifically, when under stress:
- 53% of managers are more closed-minded and controlling than open and curious.
- 45% are more upset and emotional than calm and in control.
- 45% ignore or reject rather than listen or seek to understand.
- 43% are more angry and heated than cool and collected.
- 37% avoid or sidestep rather than be direct and unambiguous.
- 30% are more devious and deceitful than candid and honest.
So, what could be happening inside a leaders’ brain during times like these? First, you need to understand that our brains have three parts:
- The cerebellum, or brain stem, (the “reptilian brain”) controls the fight, freeze or flee responses when confronted with a crisis.
- The limbic system ( mid-brain area) is responsible for emotional reactions.
- Finally, located on top of your brain is the neocortex, part of the cerebral cortex, is involved in higher-order functions that we associate with being human, such as language, spatial reasoning and logic.
In times of stress, the cerebral cortex can be emotionally hijacked by the limbic system or the brain stem. When this happens, reactions are dictated by the cerebellum or limbic system before the neocortex can moderate or control those reactions. This explains why some leaders panic during a crisis, even though that can be the worst time to panic.
What the Best Leaders Do: Act short-term think long term
In a March 2014 TED Talk, Simon Sinek’s “Why Good Leaders Make You Feel Safe,” He shares an example of a company that is facing a financial crisis. The Board of Directors wants the CEO to slash divisions and jobs to stop the bleeding.
But the CEO has another idea: to distribute salary reductions across the company, and allow employees to trade time off, so that no one needs to lose their job. Under this scenario, profits skyrocketed because employees felt safe.
The CEO opted for a long-term solution, rather than a short-term fix, which is one of the most important actions a leader can take in terms of crisis.
Harvard Business Research explains that leaders who practice “adaptive leadership” seize the opportunity to hit the organization’s reset button. They use turbulence to build on and bring closure to the past. They change key rules of the game, reshape parts of the organization, and redefine the work people do.”
How to leverage your quarterly meetings
A crisis often requires leaders to make decisions when they feel the most vulnerable and maintain their vision for others when their own might be shrouded in fog.
To understand those who effectively lead through such conditions, The Center for Disaster Management and the Frances Hesselbein Leadership Forum have joined forces to identify common behaviors.
You may want to leverage your quarterly planning meetings to engage in some of these effective leadership behaviors:
Understand the Reality of the Situation. It’s crucial to recognize the true issues presented by the situation rather than those that may be perceived through a “brain fogged” lens. A clear understanding of the issues will lead to good decision-making and priority setting.
Respond with thoughtful urgency. In a crisis, time is of the essence. However, there is no room for hasty, reactive responses. Leaders must quickly weigh all options and then commit to a plan of action that protects the organization’s long-term interests.
Maintaining Urgency and Acting Decisively. Many leaders who are effective in a crisis have a readiness or even bias for action. These leaders do not wait to be told what to do—they work proactively to identify what is most needed in the moment and they try to anticipate what will be required next.
Decide, plan and delegate. Executing a course of action may seem overwhelming at first. Breaking it down into a step-by-step action plan makes execution getting it done realistic and attainable. Utilize the entire leadership team and other available resources to distribute the accountability.
Develop a communication strategy. Leaders need to pay particular attention to communication strategies—both internally and externally—because words matter, especially during a crisis. Internally, the team needs to have a common language they can use to cascade the agreed upon message to the company’s stakeholders.
Adapt and realign. Many leaders cope with uncertainty in a crisis by regularly revisiting and adapting their strategies. They know that conditions in a crisis can change quickly, and therefore they must constantly revisit whether the strategies they have articulated are still relevant and effective, including making tough decisions about how to allocate limited resources against these strategies.
There’s a saying … During tough times, poor companies fail, good companies survive, and great companies seize the opportunity to improve and become stronger for the recovery.
What kind of company do you want to be? Maintain that commitment in your regular planning sessions. Talk with us about maximizing the value of quarterly and annual planning.
About Grow Exceptional
Grow Exceptional works with leadership teams to help get their businesses “unstuck” by implementing and teaching the widely adopted Entrepreneurial Operating System process (EOS®).