Leadership in Crisis
Published on : Thursday 04-06-2020
Arun Ramu outlines leadership attitudes to adopt and the strategic approach and processes to follow, to successfully steer out of crisis situation.
With the Covid-19 lockdown across the world, businesses everywhere have gone into shock and business leaders are fraught with anxiety, stress and fear. What should a leader do during the current crisis situation? What is the attitude to cultivate, the strategic approach to take and the processes to put in place to lead the company successfully out of this situation?
Crisis management
The basis of any crisis is the lack of information. This lack of information causes fear and anxiety and further paralyses one from tackling the crisis. In the case of a management crisis, the lack of information crops up because majority of the strategic assumptions becoming invalid. The parameters like cash cycle, market demand, competitive advantage, employee availability, inventory position, etc., are no longer in your control and all the assumptions made around them are no longer valid. Hence, you feel out of control and have a sinking feeling of uncertainty. Here are the leadership attitudes to adopt and the strategic approach and processes to follow to successfully steer out of this situation.
Step 1: Know your Crisis
As a Leader, you need to first embrace the new reality. Hoping that it will all miraculously go away does not make for a good strategy. You have to understand that your plan that was based on 80% certainty and 20% risk now needs to be a plan that can deliver results in 80% ambiguity and 20% certainty. The longer you are in denial of this, the slower will be your progress. You have to quickly reassess the situation and re-work the plan to handle this level of ambiguity and still deliver.
The first actionable step to solve this crisis is to define your problem from scratch, i.e., using new assumptions.
1- Identify the data variables and points that have changed and/or are no longer as you have assumed. Identify their new volatility so that you can track them as they stabilise and become less volatile and hence more dependable
2- Identify areas that are not under risk. This will form the foundation of your new strategy
3- Identify near term issues that can scuttle your plans. These will need to be watched diligently
4- Define the new battle field and the new win parameters, and
5- Finally redefine the new short term goals and the high level strategy to tackle the crisis With this done you will be in a position to guide your company to tackle the situation and move ahead consistently.
Step 2: Create a Calm
Once you have a handle on the crisis and a broad plan to tackle it, you need to create a calm before your team and enterprise can function effectively. You need to shield them from the vagaries of the crisis and provide them with a relatively calm atmosphere to work in and deliver you out of the crisis. At no point should they have to worry about what is not their control. You now, based on your new plan, need to let them know the new reality and the new goals. The short-term mantra now needs to be ‘Jan hai to Jahan hai’ – if you live through the short term you can hope for a good
future.Your communication clarity and transparency here will ensure that people feel the calm and deliver productively. Communicate frequently even if it means you have to convey bad news.
The way to create a calm is by reducing ambiguity.
1- Create a vertically integrated war room team to tackle the crisis. If you can get key vendors and customers (even remotely) on the team, it will be even more effective
2- Knowing the new variables and their volatility, use the war room team to re-plan the base strategy with a large number of defensive goals, taking less risks
3- Keeping the mission, vision and value of the company as a guiding light, work out the best-case, average-case and worst-case scenarios. The more prepared you are for various outcomes the better you are likely to weather the storm
4- Detail this plan (all cases) down to every department – finance, production, sales and marketing, human resources etc. Clarity at the lowest levels is mandatory to enable you to quickly tackle issues, and
5- Finally, identify the most critical aspects on which the plan is hinged and assign war room members to each one.
Note: If you do not have enough senior people for this, this is a good opportunity to induct people into the senior management and train them on the job. You as a leader cannot keep tabs on all the critical aspects, however, you will be able to control all of it if you delegate effectively.
Step 3: Lead the Change
As a leader you need to be aware that you are at the helm and your team is relying upon you completely to take them across the crisis. To get them to follow the changed plan, you will need to be the role model. If you do not take the first step they won’t either. The road is new for everyone and people will stumble occasionally. Your communication needs to set expectations clearly and you should be honest yet compassionate. It is critical to make people understand that change is essential and not to be stressed by it. Once the plan is communicated, your job is to constantly inspire everyone and motivate people. This is a free resource – over use it.
To action this plan, set new goals for everyone to deliver.
1- Communicate the strategy and plan to all members of the company. Everyone needs to know the ‘what’ and the ‘why’ so that they can be effective. All managers should be in synch about the new goals, processes and policies. Any ambiguity will promote panic
2- Every department needs to understand how they can promote near term success and what can cause disasters
3- Once the plan is put into action, keep progress highly visible and highlight early successes, and
4- The war room now needs to meet frequently to assess progress and correct course as required.
Step 4: Celebrate Success
Next, you need to smile more often publicly. People are reading your body language. Not smiling will be taken as an indication of failure and stress and panic will increase in the ranks. People’s energies, commitment and productivity improve when they hear sounds of success. So celebrating successes is critical. However refrain from making false promises or hiding bad news. Talk to all empathetically. Use only positive reinforcement and don’t make them feel responsible for failure.
Celebrate success by:
1- Frequent all hands meetings to share progress while highlighting successes and heroes
2- Sharing failures as well but only after arriving at a plan to fix it. Sharing failures without a solution will create speculation and panic, and
3- Encouraging creativity but only if it can be quantified as contributing directly to the short term plan.
Step 5: Be Nimble
This is a highly ambiguous situation and large numbers of variables are not in your control. So you need to review them very frequently and make quick decisions and corrections to ensure your plan succeeds. You need to focus on creating a new corrected plan and not on why the previous one failed. When variables change quickly, do not penalise the people responsible for tracking it, focus on replanning it instead. You should be in constant touch will your customers, suppliers and employees to ensure you have their pulse. They too will be watching you to get a feel of how your plan is progressing.
To remain ahead of the curve:
1- Determine the frequency of reviewing various aspects based on criticality to the plan and their volatility
2- All variables being tracked must have upper and lower limits of risk that trigger quick escalation, reviews and if required course correction. Once the course correction has been made, it too should be tracked till it has proven appropriate
3- Calendaring all reviews two or three weeks ahead has to become mandatory. This will ensure actions and reviews are on schedule and will also reduce the stress around it, and
4- Course corrections must be communicated to all affected parties all the way to the lowest rung clearly.
Step 6: Re-establishing the Status Quo
Post-crisis, all too often people do not remember to inform the team that the danger has passed. As a leader you need to let the team know that the crisis is passed and the ambiguity and chaos is over.
Now you are ready for ‘Jan bhi, Jahan bhi’!!
Arun Ramu has over 35 years of wide experience in Global IT industries, having worked with large software services providers like Infosys and TCS and startups like Trigent Software and Avekshaa Technologies. Arun was a Founder and Partner at Avekshaa Technologies, a successful startup in the Performance Engineering and Testing space. In his current role as Mentor and Senior Vice President, Pegasus Consulting, Arun is consulting with multiple startups and MSMEs assisting them in Leadership Development and Strategic Planning.
