1: “When written in Chinese, the word ‘crisis’ is composed of two characters – one represents danger and one represents opportunity,” John F. Kennedy once said.
Yesterday, we explored how the best CEOs create a small team of senior leaders to deal directly with the crisis. This prevents the CEO from becoming all-consumed by the situation and enables the rest of the organization to continue to get work done.
“While the crisis team is minimizing the danger, the CEO also needs to be looking at the opportunity,” Carolyn Dewar, Scott Keller, and Vikram Malhotra write in their book CEO Excellence: The Six Mindsets That Distinguish the Best Leaders from the Rest.
On Monday, we looked at how new GM CEO Mary Barra accelerated a necessary company-wide culture change while confronting a terrible situation involving fatal crashes due to faulty ignition switches.
Former Adidas CEO Kasper Rørsted builds upon the idea of how a crisis can spur new levels of post-crisis performance: “I know it’s commonplace to say never waste a good crisis, but it’s actually the best time to make radical change in a company. This is when you can be more dogmatic and say, ‘We’re not going to do this anymore.’ Whether it’s cutting unnecessary travel, leveraging digital channels, or anything else–it’s the time to move two or three years ahead of where you would have been otherwise.”
2: A difficult situation can also catalyze an organization to pursue new business opportunities.
“Be cognizant of what secular trends the crisis will accelerate,” says Intuit CEO Brad Smith. “In the financial crisis the adoption of platforms, mobile devices, and globalization accelerated faster than anyone anticipated. The COVID-19 crisis will likely accelerate virtual collaboration, omnichannel commerce, and the need to have better financial literacy and money management.”
He continues: “Keep a running list of the things that are now actually working better than they were before the crisis, review that list, and decide what will become part of the new operating model. During COVID-19, for example, Zoom became the great equalizer. Everyone had an equal voice. Perhaps we all don’t have to work in the office.”
Once the initial flurry of the difficult situation subsides, the best CEOs stay with it until they know that their team has confronted the root causes.
“These are seldom technical,” Carolyn, Scott, and Vikram write, “more often they involve people issues (culture, decision-rights, capabilities), processes (risk governance, performance management, standard setting), and systems and tools (maintenance procedures)—all of which are likely to take years to tackle.”
On Tuesday, we examined the importance of routinely stress-testing the organization. “Even if a crisis doesn’t arise, regular stress-testing can reveal opportunities to make a business more resilient,” the authors note. “It can lead to divesting underperforming businesses, cutting excess costs, doubling down in high-growth geographies, enhancing the M&A plan, improving the effectiveness of the top team, and making needed investments in technologies.”
Ecolab CEO Doug Baker observes: “There are always problems in business. And we have to get after the problems we can immediately see so that we have the capacity to manage what we can’t foresee, but know is certain to come. A lot of resilience is just making sure we keep dealing with the stuff as it comes up. Don’t let business challenges pile up.”
3: Difficult events create a moment of truth not only for the organization, but also for the leader. The best CEOs remain optimistic and take a long-term view.
To do this, the best CEOs emphasize the importance of sleep, short breaks, nutrition, exercise, and time spent with loved ones.
Santander CEO Ana Botín captures this idea in her motto “Estar bien para poder hacer más,” which translates to, “If you’re feeling good, you can do many more things.”
Andrew Wilson, the CEO of Electronic Arts, is also a practicing martial artist. He explains: “An important lesson from jiu-jitsu is that a small person—say, 150 pounds, close to my weight—fighting a 300-pound person will end up in a bad place at some point in time, no matter how good you are.
“Jiu-jitsu teaches you to find comfort in the uncomfortable,” he notes. “It teaches you that as long as you can breathe, you can continue. Even when I’m on the bottom, under a 300-pound person in the most difficult of situations, my job is to find that wriggle room that puts me in a position where I can breathe and plan my next move. And instead of fighting a losing battle, take the battle to where I’m strong.”
One particularly effective strategy? Say focused on the organization’s “why:” Says American Express CEO Ken Chenault: “Everything should be grounded in what the firm stands for. During the financial crisis, for example, I had to reassert that American Express is at its heart a service business. We needed to focus on that and really understand what it meant to serve people.”
Bayern Munich CEO Herbert Hainer reflects: “It doesn’t matter how difficult times are, there is always a world after a crisis. Even if the situation looks bleak, believe in yourself and your people and maintain a positive attitude. Don’t let yourself or the company be influenced too much by uncontrollable circumstances.”
More tomorrow.
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Reflection: How have I used prior difficult periods in my life to uncover new opportunities for growth and improvement?
Action: Identify a current challenge my organization is facing and list at least two ways it could be leveraged to drive positive change or innovation.
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