Whether you are leading an ambitious startup, a company that is ticking along nicely, a company pivoting and changing direction or pace, or managing a turnaround situation – crises (plural) come with the territory. Some crises, like wars, financial volatility, pandemics, supply chain challenges and industry-wide issues, are external; some are internal, inherited or self-inflicted. They are all disruptive and dangerous.
A crisis is an abrupt negative change.
When and how a crisis appears can be a surprise – but they are coming. Often, they arrive in gangs – loitering together in a dark alley and then moving threateningly towards you – they have no respect for appropriate intervals, convenient timing or your schedule. They don’t stick to weekdays or office hours. Jamie Dimon shrugs: “A crisis is just a thing that happens”.
As a leader, you must have plans in action and resources allocated when a crisis happens. Some of these things are predictable. Some can take months to address. Some can be over in hours. A long crisis will need dedicated resources – including time and attention from the leader, depending on the scale and impact of the crisis. BP CEO Tony Hayward didn’t get much time to focus on anything for months, apart from Deepwater.
A crisis is a recurring leadership test – for the leader and those watching the leader. Handling a crisis is a great opportunity to demonstrate resilience, grow in confidence, and show your team and others why you deserve to have keep the job. A crisis is an existential threat.
Experienced leaders are often more emotionally prepared to deal with a crisis because they’ve done it before and are battle-hardened. “Battle-hardened” may appear an overly dramatic word until you’ve been through a crisis and operated under “live fire”. Things move quickly, the predictable becomes unpredictable, once reliable people buckle while others step up.Your ability to handle stress grows over time – it’s a bit like growing muscle or endurance. But to grow that muscle you have to stay in the gym, you have to stay in post.
11 Steps on How to Handle a Crisis as a Leader:
You must move on from your former role and get your leadership shoes on. You’re a leader now – no longer a doer, executer or carry-outer. Leading is your job.
Avoiding a crisis is the ideal, but some will come at you anyway. How do you handle a crisis?
1. Stay (or at least appear and sound) calm and composed in the storm.
Your team will look to you in a crisis for guidance and stability. They need reassurance from you and calmness. They need to delegate their anxiety to you before continuing their work. Regulate your emotions and retain a cool composure, remember you are being watched as a leader, and your team wants, expects and needs you to lead.
Breathe, stay focused, and project an aura of confidence – even if you don’t have all the answers right away: you almost certainly won’t. I didn’t. But nobody needed to see my alarm and anxiety. Read on to find out my story…
2. Gather Reliable Information Fast and Assess the Situation.
Understanding the full scope of the crisis is crucial. Gather all information on the crisis, this will allow you to assess the situation with an open mind. Confirm the information is reliable. Understanding the crisis at its roots – the causes and the impact – allows a leader to make informed decisions on handling events effectively. This is easier said than done, but responding knowing more is far better than reacting knowing less.
3. Communicate Transparently and Quickly – Internally and Externally.
Clarity of thought and clarity of comms. Open and honest communication is paramount during a crisis. Keep all your key people informed of the ongoing situation; the more people on your side, the greater support you have for the moves you make.
What you communicate will (should) ripple down, but it’s good to widen the audience, and over-communicating is GOOD – under-communicating is dangerous. Transparency builds trust, even if the news is not positive. People are weirdly okay with bad news if they trust the leader and the leader explains the plan. Be prepared to communicate regularly as new information becomes available.
4. Assemble a Crisis Management Team.
You don’t have to tackle a crisis alone. You probably can’t. You definitely shouldn’t. Form a crisis management team comprising key leaders and experts within your organisation. Collaborate with a diverse team of cross-company minds to establish varying possibilities to tackle this crisis, the more perspectives and possibilities, the merrier.
Test assumptions, cross-check opinions, preconceptions and prejudices: conflicting opinions and open debate can help you make better decisions. Encourage people, of all ranks, to speak up.
5. Develop a Crisis Response Plan.
You should have a crisis response plan before a crisis hits. However, if you don’t, start developing one – today is a good day for that. This can be a generic plan or tailored for certain likely scenarios. Having a communications plan and protocols reduces chaos and confusion during critical moments. It also reduces reaction time and reduces the decisions to-be-made pile. Decisions demand bandwidth – freeing up bandwidth is always good.
6. Prioritise, Delegate and Review. Do this frequently.
During a crisis, it’s easy to feel overwhelmed by the sheer number of tasks and decisions. Prioritise the most critical issues and delegate responsibilities to your team members. Delegating problems and tasks allows you, as a leader, to focus on the most pressing issue. Review what you’ve delegated more frequently than normal – things keep changing, and you need to be aware and your team may also need the extra reassurance.
7. Be Prepared to be Adaptable and Flexible.
Crisis situations can evolve rapidly. New information will be thrown out constantly, so be prepared for anything. You’ll find navigating the earth moving under your feet easier if you retain a flexible, open mind and keep on evaluating your options.
8. If the crisis is ongoing, manage your energy and your sleep.
Sleep deprivation makes you crazy. It also leads to crazy decisions. Do what you can, delegate social media and on-site management, get some sleep but be prepared to be woken up by a trusted inner circle who are able to weigh up developments as they arise and evaluate how soon you need to be involved.
9. Show Empathy and Support.
Remember that your team members may be/probably will be experiencing stress and uncertainty during a crisis. They are human, with human emotions. Acknowledge the impact of the crisis, label it and show empathy when and where needed – that is the highest form of being a good leader. Give your team a break. Let them decompress.
10. Learn from the Crisis.
Every crisis is an opportunity for growth and improvement. Throwing money at a problem is often the only option, but you don’t want to be doing that for the same problem multiple times. Once the crisis is under control, conduct a thorough debriefing. Analyse what went well and what could have been handled better. Learn from any mistakes and make the changes needed to prevent similar crises from happening in the future.
11. Plan for the Post-Crisis Phase.
Even after the immediate crisis subsides, there may be a long road to recovery. Try to regain your company’s sense of normality, this might mean reaching out to those affected by the crisis, both internal and external, and rebuilding key relationships.
Stay calm, communicate transparently, and lead with empathy. Crisis management is about surviving the storm and emerging stronger and more prepared for whatever challenges lie ahead. Anyone can lead when everything is going well, although not everyone does. True leadership shines brightest in the face of adversity.
The Role of a Coach or Mentor In a Crisis – My Story
Having external eyes that are firmly on your side can help you avoid or prevent a crisis (self-inflicted or external) and navigate the unavoidable ones. I speak from experience.
I have been the beneficiary of multiple coaches and mentors. Much of any success I have had is down to them, my mistakes are all my own. I wish I could say thank you to them all. They are my heroes.
My Crisis Experience Leading a Group of Businesses
I had two mentors when I took over a small industrial subsidiary group with three companies and 140 staff in two locations in what had recently been East Germany. One mentor or coach was the owner of the industrial group I worked for, the other was a neighbouring businessman who became a close friend.
The Harvard Business Review says “In times of crisis, it is easy to focus only on what’s happening right here, right now. With the assistance of a coach, organizational leaders can look further ahead and not only deal with the immediate emergency but also prepare for the coming changes.”
All three businesses were in trouble to varying levels, and I was the guy on the ground. I ended up leading these three teams totalling circa 140 people for three years. For the first 12 weeks, crises came at me every day like large, fast hailstones, with the odd meteorite thrown in to make me pay extra close attention. They just kept coming. The pace was relentless.
Ben Horowitz speaks about the difference between a Wartime CEO and a peacetime CEO. I was definitely a Wartime business leader. My success or failure meant the difference between a job or now job for 140 families and had massive implications for the mother group.
The Chinese word for crisis is combines the two words danger and opportunity. We just needed to survive.
I was fire-fighting legacy issues and new crises kept coming because all the systems in the business were dysfunctional or absent. Things got better over the next 9 months, some days went by without someone saying,” Boss, we have a problem.” But crises still exploded onto my desk every week.
Sometimes, when a new “issue” landed on my desk, I’d utter a laughing/crying/swearing/despairing grunt and say, “What now?”. There were financial and cash flow issues, people issues, customer issues, quality control issues, and dealings with the local authority and the taxman. It was a full throated turnaround situation, so everything was heightened and overdramatic – the death threat from the head of the East German/Russian mafia helped.
I was lucky that the company’s owner always answered my phone calls. Always.The group had its own issues, but he knew I was 31, on my own, operating in a second language, geographically isolated and a bit clueless. He pivoted as fast as he could, from telling me what to do to asking me to identify my options and helping me evaluate those options on the phone.
They were his companies, but he trained me to think for myself. The phone calls slowly became less frequent and went from several a day to a few times a week, then weekly, then fortnightly. Panic turned into a process. I copied and pasted this “shit happens, let’s fix it” approach with my teams, and within a year, they only escalated big things to me. They were learning, I was learning. Resilience was growing in us. This was good – the first 12 months were intense and exhausting – my bandwidth was stretched.
My other coach was local. He understood business, but he also understood the local people and my new environment. The combination of these two coaches was invaluable. He asked me tough questions over countless cigarettes and much too much coffee. He helped me think things through, war-game ideas, think more clearly, and act more slowly. Reacting gave way to responding.
I was also super lucky because I couldn’t do anything in this group of manufacturing companies except lead. I read a quote at the time that said, “Successful managers ruthlessly delegate everything that does not exclusively belong to the management function.” This was easy for me because I didn’t know anything about the manufacturing process in the three companies – all I knew was a bit about people and leadership.
I learnt about cash flow and external stakeholder management and internal comms damn quickly. Luckily I had learnt from my multiple mistakes as captain of various sports teams. I had to delegate everything I couldn’t do – and all I could do was lead. A major advantage! N.B. Leaders who can do everything within their business need extraordinary discipline to delegate. That’s very tough.
As my diary freed up, I spent more time thinking about the business and improving it, making it more efficient and installing and improving systems and processes. I canned low-margin work, sacked bad customers, re-negotiated with suppliers and improved our margins.
I learnt, like most new leaders, to let go and ruthlessly delegate and give authority to others to find dedicated time for the dual work streams of strategic thinking and firefighting.
Having allocated and scheduled free bandwidth and diary time for putting out fires is key for a successful leader. If no crisis turns up – thoughtful time with a pen and a pad is never wasted.
We reduced Cost of Sales by over 10%, culled low-margin work and grew margin in other areas.
Leading in a Crisis – Need Help?
Imagine having someone in your corner to help you handle a crisis or avoid them? Who knows you and your environment, who you can trust and who is totally on your side. Learn about a consiglieri/coach relationship.
Prevention is always better and cheaper than cure. But the ROI on communicating well as a Leader can save your business millions in hard cash and much more in damage to the business’s Brand and Reputation. Whatever your title is as leader of a business – you are The Chief Storytelling Officer.
