By John R. Ryan
With Wall Street and the economy in upheaval, headlines understandably focus on what went wrong and what to do next. But there's another important and generally overlooked aspect of this financial crisis: the unfortunate but clear opportunity it affords to develop better leaders.
As this crisis unfolds, the men and women in the middle of it still have the chance to positively influence the outcome. Those of us watching from the outside can pick up valuable lessons on how to lead when crisis comes our way, as it inevitably will.
At the Center for Creative Leadership (CCL), we have worked with and studied hundreds of executives who credit crises with transforming them into better leaders. In that work, a number of truths about crisis leadership have emerged. Perhaps the most important one is this: There's no substitute for preparation.
Be Prepared
If you have not prepared mentally and physically for emergencies through practice and drills, your performance will suffer when a crisis actually does occur. That applies to everyone from pilots to school administrators to leaders at all levels of organizations.
Even when you do prepare, however, a crisis can test you severely. Here are five tips for preparing for and coping with a crisis:
•Know yourself. This sounds simple enough. But many leaders are not fully aware of their strengths and weaknesses. In a crisis, your strengths will sustain you, and weaknesses can wreck you. So ask colleagues you trust about how they perceive you. Have them complete 360-degree assessments that evaluate where you're strong and where you can improve. Your self-awareness will grow rapidly.
If Ann Mulcahy had lacked self-awareness, she could not have saved Xerox (XRX) from bankruptcy. Newly installed as CEO, Mulcahy knew enough about herself to make a series of smart moves. As Bill George recounts in his fine book True North, Mulcahy leveraged her chief strength: her ability to build great teams and trust them to do their jobs. She also recognized a big weakness: her lack of expertise in finance and R&D. To compensate, she had her own people tutor her. She also surrounded herself with leaders whose own skills sets balanced hers. The result: an amazing and continuing turnaround at Xerox.
• Be yourself. In a crisis, the pressure to compromise your values can be immense. With employees, shareholders, and the media demanding a response—and your career potentially hanging in the balance—there's a temptation to take shortcuts and discard principles. Think hard about the values that matter most to you and how you've worked to exemplify them throughout your life. The better you know them, the more likely you are to stick by them consciously in times of stress.
Abraham Lincoln spent his entire Presidency in crisis, trying to steer the U.S. through a brutal civil war. Today he's regarded as perhaps the country's greatest President. Why? Because he was an authentic leader: He did his homework, he led by example, and he was always true to himself. A remarkably humble and confident man, Lincoln put his mission to preserve the Union above all else. He brought into his Cabinet some rivals who had forcefully opposed him and even insulted him on the campaign trail. But he reached out to them because he needed their experience and skills to complement his own.
• Expect chaos. Crises set their own timetable, and the systems we put in place to respond to them often prove insufficient. Preparedness is of course essential for dealing effectively with a crisis. So is flexibility. Don't rely too heavily on the way things were done before or get locked into plans that were made in anticipation of things playing out differently than they actually are.
To learn more about the nuts and bolts of crisis leadership, the CCL last year brought together a group of leaders from the front lines of the Hurricane Katrina crisis in 2005. Raymond Jetson worked for the Louisiana Health & Hospitals Dept. when Katrina hit.
Plans had been made for addressing such a disaster, he said. But after gathering at an emergency operations center as the storm blew through, "it quickly dawned on folks…that there weren't any processes in place for what we were looking at. If you did not have people who understood what needed to happen intuitively, you were in deep trouble." As well as setting protocol, crisis planning should also focus on developing the leadership skills of resilience, networking, and creative problem solving—the things we need most when plans fail.
• Check your ego. When leaders feel suddenly overwhelmed in crisis, they often try to do everything themselves. Strong individual leadership is of course imperative during a crisis. But it is not sufficient. A collective response is essential. Leaders trying to fix a crisis with a top-down approach many times find they're not close enough to the ground to know what's really happening. And even if they are, there's still no way for them to absorb and make sense of the massive volumes of information flying at them.
One of CCL's crisis forum participants, Jennifer Vidrine, was the assistant director of a shelter in Ville Platte, La., when Katrina hit. Arriving at her town's civic center, she found about 6,000 desperate, hungry people. She was the only person on hand. Spontaneously, and without any official orders, she created a makeshift shelter, working through a local radio station to plead with the community for supplies. Over the next several months, she led an army of volunteers who tended to thousands of displaced citizens. Many other leaders like Vidrine emerged from the bottom-up during the Katrina crisis, demonstrating quite clearly that our best leaders are often the ones without the big titles. Effective leaders look for these people, develop, and rely on them.
• Brace for emotional fallout. Leaders many times become preoccupied with operations and procedures during a crisis. They forget about the emotional needs of the people they're leading—and this can result in poor outcomes. To paraphrase CCL faculty member and retired U.S. Army officer Gene Klann, crisis breeds emotional chaos.
As I also learned during my 35-year career in the U.S. Navy, it's crucial to teach troops how to deal with the wide range of emotions they will feel before, during, and after combat. If they can't control these emotions, they won't be able to function under fire. Combat leaders must learn how to deal with their own emotions as well as the emotions of the men and women they lead. Civilian leaders face the same challenge during a crisis. Be prepared for the same emotional chaos to flow over you and your colleagues. Pay attention, and be supportive. Your colleagues will pay you back with greater cooperation.
Managing a crisis can be all-encompassing. But it's just one of the numerous leadership challenges facing today's executives and managers. As a new columnist for BusinessWeek.com, I'll explore other relevant topics in forthcoming pieces. It's a great privilege to have this forum, and your feedback will play a key role in determining the issues we discuss. I look forward to many good exchanges.
John R. Ryan is president of the Center for Creative Leadership, a top-ranked, global provider of executive education. He previously served as chancellor of the State University of New York and superintendent of the U.S. Naval Academy at Annapolis, Md. He was a pilot during a 35-year in the Navy, retiring as a vice-admiral.
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