Coaching Churches

Every individual and organization at some point in time will face a crisis and the way they respond will determine if the situation potentially becomes fatal or they experience a complete and total recovery.  I have learned a lot from personal experience on this subject over the years and probably the most important lesson is to be incredibly proactive and not stick your head in the sand and hope it will get better.

In Jack Welch’s great book Winning he gives some great advice on how he dealt with crisis situations at G.E.  These are his five guiding assumptions:

1.      The problem is worse than it appears—No matter how hard you might wish and pray; very few crises start small and stay that way.  The vast majority are bigger in scope than you could ever imagine with that first phone call and they will last longer and get more ugly.

2.      There are no secrets in the world, and everyone will eventually find out everything—Information that you try to shut down will eventually get out, and as it travels, it will certainly morph, twist and darken.   The only way to prevent that is to expose the problem yourself and tell the truth.

3.      You and your organization’s handling of the crisis will be portrayed in the worst possible light—The very nature of a crisis means that you and your organization will be portrayed in a light so negative you won’t even recognize yourself.  Don’t hunker down.  Along with disclosing the full extent of your problem you have got to stand up and define your position before someone else does for you.

4.      There will be changes in processes and people—Crisis requires change.  Sometimes a process fix is enough.  Usually not because the people affected by the crisis demand that someone be held responsible.

5.      The organization will survive, ultimately stronger for what happened—There is not a crisis you cannot learn from, even though you hate every one of them.  After a crisis is over the tendency is to put it away in a drawer.  Don’t, teach its lessons every chance you get.

Bill George

In order to understand the real reasons for the crisis, everyone on the leadership team must be willing to tell the whole truth. As J.P. Morgan Chase CEO Jamie Dimon said at a panel I chaired at the World Economic Forum at Davos in January, “It’s not sufficient to have one person on your team who is a truth teller. Everyone on the team must be candid in sharing the entire truth, no matter how painful it is.” How can we solve problems if we don’t acknowledge their existence?

Lesson #2: “No matter how bad things are, they will get worse.” Faced with bad news, many leaders cannot believe that things could really be so grim. Consequently, they try to convince the bearers of bad news that things aren’t so bad, and swift action can make problems go away.

This causes leaders to undershoot the mark in terms of corrective actions. As a consequence, they wind up taking a series of steps, none of which is powerful enough to correct the downward spiral. It is far better for leaders to anticipate the worst and get out in front of it. If they restructure their cost base for the worst case, they can get their organization healthy for the turnaround when it comes and take advantage of opportunities that present themselves.

Lesson #3: “Build a mountain of cash, and get to the highest hill.” In good times leaders worry more about earnings per share and revenue growth than they do about their balance sheets. In a crisis, cash is king. Forget about EPS and all those stock market measures. The question is, “Does your organization have sufficient cash to survive the most dire circumstances?”

Goldman Sachs, where I serve on the board of directors, anticipated the difficult times and built up its cash reserves. When the markets got really bad, Goldman had adequate cash reserves to weather the storm.

Lesson #4: “Get the world off your shoulders.” In a crisis, many leaders act like Atlas, carrying the weight of the world on their shoulders. They go into isolation, and think they can solve the problem themselves. In reality, leaders must have the help of all their people to devise solutions and to implement them. This means bringing people into their confidence, asking them for help and ideas, and gaining their commitment to painful corrective actions.

Lesson #5: “Before asking others to sacrifice, first volunteer yourself.” If there are sacrifices to be made – and there will be – then the leaders should step up and make the greatest sacrifices themselves. Crises are the real tests of leaders’ True North. Everyone is watching to see what the leaders do. Will they stay true to their values? Will they bow to external pressures, or confront the crisis in a straight-forward manner? Will they be seduced by short-term rewards, or will they make near-term sacrifices in order to fix the long-term situation?

Lesson #6: “Never waste a good crisis.” This piece of advice comes from Benjamin Netanyahu, the next prime minister of Israel, at the panel I chaired in Davos.

When things are going well, people resist major changes or try to get by with minor adaptations. A crisis provides the leader with the platform to get things done that were required anyway and offers the sense of urgency to accelerate their implementation.

Lesson #7: “Be aggressive in the marketplace.” This may sound counter-intuitive, but a crisis offers the best opportunity to change the game in your favor, with new products or services to gain market share. Many people look at a crisis as something to get through, until they can go back to business as usual. But “business as usual” never returns because markets are irrevocably changed. Why not create the changes that move the market in your favor, instead of waiting and reacting to the changes as they take place?

The Bottom Line:
In a crisis we learn who the real leaders are, and whether they have the wherewithal to stay on course of their True North.

About the Author
Bill George, author of “True North,” is a professor of management practice at Harvard Business School. He is also the former CEO of Medtronic and serves on the boards of directors of ExxonMobil, Goldman Sachs and Novartis.