Leading Through A Crisis: Bad Times, Followed by Good Reflection, Leads to Great Opportunity
The year 2020 has challenged us in ways that we could not predict, requiring us to improvise and adapt along the way. As we’ve experimented our way from day to day, many individuals have shared their reflections and best practices for navigating through a crisis. In this article, I will attempt to codify/share the key leadership lessons I have embraced so that bad times, followed by good reflection, can lead to great opportunity.
Lesson #1: Do not attempt to predict the future. To paraphrase Ray Dalio, those who live by a crystal ball, end up eating a lot of ground glass. 2020 has reinforced the futility of predicting the future, while reminding us of the value of scenario planning. The best practice that has emerged is the need to produce a range of alternative futures, supported by leading indicators and contingency plans to inform us “which future” is unfolding and guide our actions as a result. Those who have fared better than others developed a plan for the worst case scenario, played offense, while seeking opportunities to create a better case outcome.
Lesson #2: Stack-rank your priorities for navigating during the downturn. If you study the outperformers who have gained market share and strength during this crisis, a common set of stack-ranked priorities have been illuminated in their actions:
- Their first priority remained their employees and their customers. They’ve prioritized employee health and mental well-being, while helping their customers survive by extending terms and offering deeper discounts. They’ve also shifted how they measure success to be defined through the eyes of employees and customers: employee sentiment, safety and security; and the customer’s viability, their willingness to recommend your product or service to others (i.e., Net Promoter Scores), and your company’s ability to retain them as viable customers (controllable attrition).
- Their second priority has been to adjust their organization’s expense burn rate to align with slower demand and revenue growth. Quick and decisive actions were taken to reduce discretionary spending, sequence work and slow hiring, while making the necessary investments to ensure the safety and health of their employees.
- Their third priority has been to play strategic offense. These companies have protected investment in innovation in their most strategic areas, leaned into demand-generating initiatives that produce lower (or break-even) returns in the near-term, while capitalizing on cash reserves or their balance sheet to search for strategic acquisitions.
Lesson #3: Engage the entire organization in the process for navigating the crisis. The rule of thumb has been to increase communication 3X during this period when compared to the “normal operating rhythm.” As leaders, we’ve had to become comfortable with communicating in a time when we have more questions than answers, Best-in-class companies have called on employees to operate with an owner’s mindset, crowdsourcing ideas to help customers thrive while assisting the company reduce its burn rate and spur demand along the way.
Lesson #4: Reimagine and reinvent. We’ve all become fond of the adage, “never waste a crisis.” There are two best practices embedded in this adage that I believe are important to tease out.
- The first is the external reality. A crisis often accelerates previous secular trends by several years. Such was the case in the Great Recession of 2008-2009 as a shift to SaaS and mobile accelerated. The current pandemic is foreshadowing the same with a shift to virtual collaboration and e-commerce. Simply said, things will not return to what we considered “normal” before the crisis hit.
- The second is internal. A crisis provides an organization with an opportunity to reinvent itself, finding new ways of operating more effectively once the crisis has passed. For example, we’ve learned that we can indeed work productively while sheltered-in-place, leading many companies to rethink their work-from-home policies, real estate footprints and their approach to business travel and large conferences as they look ahead.
- The lesson learned is to shift your mindset from “re-open” or “return to work,” to “reimagine” and “reinvent.” A good way to operationalize this best practice is to request that every employee make a running list of things that are working better than would have been expected during this period. Ideas might include the velocity of execution that has occurred as a result of fewer priorities leading to faster decisions, the increased productivity discovered while working from home, or new ways of supporting customers virtually. Once your team has successfully navigated through the crisis, collect and discuss these reflections. You will find that you have amassed a portfolio of proven practices that can be adopted as new ways of doing business, emerging an even stronger organization.
In summary, the crisis of 2020 has already proven to be “the great reveal” and the “great amplifier.” There are many lessons that have been learned throughout this crisis across socio-economic, geo-political, medical, and a range of other dimensions, but for business leaders, the best practices that have emerged include the need to:
- Scenario Plan for the worst case, play offense and strive for the best case.
- Empathize with employees, customers, communities and yourself, placing well-being first.
- Edit by simplifying, stack-ranking and focusing the organization’s efforts.
- Adapt by embracing new ways to reimagine and reinvent both yourself and your organization.
What best practices and lessons have you discovered that you feel would better prepare all of us for future crises that will inevitably emerge?