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Outlook into the unknown: Executives must reconsider their roles and behaviors in order to be able to manage the completely different economic world.
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Samuel Eberl / Getty Images / EyeEm Premium
Will gas soon be scarce?
How bad is inflation hitting us?
Are the financial markets still going down?
Why can't we find employees?
Where do we get qualified employees from?
And will Corona be over soon?
In many companies, the basic mood is now to move from one crisis to the next.
The consequences are existential fears and worries among many employees.
How can executives react, decide and lead adequately in such a situation, in which even the economic existence of a company no longer seems to be secure?
How do they communicate?
And how do they deal with their own fears and insecurities?
Authors from Harvard Business Managers have advice.
Define new role
If the outlook is bleak, it sometimes helps to look back at the last major financial crisis in 2009. Robert Sutton, Professor of Management, Science and Engineering at Stanford University, recommends that managers rethink their own role in the face of a crisis.
The danger is too great that they will isolate themselves and only be fixated on the rescue of their company.
The problem that is overlooked: "How am I supposed to deal with my employees in an atmosphere of fear and loss of trust, in which the future looks anything but rosy?"
Sutton recommends four behaviors:
If you make yourself more predictable, then “you give them (the employees) the feeling that they are not at the mercy of random chance.” Nothing is as irritating as uncertainty.
Also make sure you have a clear view, which means that you should explain measures.
How does something happen, why does something happen.
Give your employees support.
When employees can actively participate in a challenge, they feel more confident.
Show compassion.
Try to empathize with people, understand their concerns and make an effort to allay their fears.
When leaders offer their employees more predictability, perspective, control, and compassion, they can help them perform even in difficult times.
The additional reward: loyalty.
Showing (self) care
When we talk about crises, we also have to look at the psychosocial side.
This applies equally to managers and their employees.
In times of crisis, many are at risk of getting lost in their frustration, anger, sadness, or fear.
Stephan Hays, psychology professor at the University of Nevada, believes that people have to face these emotions and learn to accept them.
"When you always push away anything that makes you sad or scares you, you also push away your ability to feel and accept what has deep meaning for you."
It's about learning "to deal with these feelings differently: to acknowledge, observe and describe them as these feelings come and go. Then you will also become a better leader."
So feeling sad isn't necessarily a bad thing.
All you have to do is move away from feeling pain and into purposeful and value-based behavior.
Many executives believe they have to be confident and fearless, especially in times of crisis.
But it takes a lot of strength to maintain this illusion.
Because managers are also afraid and feel very insecure in the face of the huge challenges.
So how can you lead competently and strongly when fear is breathing down your neck?
And how can you still inspire and motivate other people when your head is spinning and your heart is racing?
Author Morra Aarons-Mele says: "Fear is by no means useless. In an economic crisis, the fear that keeps us awake at night can provide a solution to keep our businesses running. However, when left unchecked, fear guides us drains us of energy and makes us make bad decisions. Fear is a powerful adversary, so we must make it our ally."
How can this succeed?
Aarons-Meles Advice:
Accept that you are afraid and name your feelings.
Research what triggers the fear and find out if your horror scenario is possible and likely.
Take action and control what is in your power.
For anything you can't control, you need a contingency plan.
Ask others for feedback and be open about fears.
Build a support system and empower yourself.
Don't try to banish fears from your job.
You are part of it – also in your management job.
You just have to learn to use it well.
Aarons-Mele shows many helpful ways to get there in her article "Leading in times of fear".
Crises also offer opportunities - this statement is as well known as it is hated.
But she's right.
However, people only realize this several weeks to months later when they look back on their experiences and lessons learned from crises.
Psychologists speak of post-traumatic growth.
Negative experiences can produce powerful positive changes.
Traumatized people can become aware of their own strengths, recognize new possibilities or deepen friendships and even feel a greater appreciation for their own lives.
Psychology professor emeritus Richard G. Tedeschi explains how this growth can happen:
Learning to understand trauma: develop a narrative for the trauma and the time after it.
This helps in accepting what happened.
Regulate emotions: Instead of focusing on losses, failures, insecurities and worst-case scenarios, we should remember previous successes, direct our gaze to best-case scenarios, become aware of our personal resources and strengths and those of the company .
Talk about what you have experienced: Verbalize what you have experienced and its consequences – small and large, short-term and long-term, private and professional, individual and company-wide effects.
In this way we give meaning to the trauma and transform paralyzing thoughts into productive thinking.
Helping others: After trauma, we bounce back faster when we find meaningful work and help others.
If you take these steps, you, your employees and your company can develop your own strengths, relationships and opportunities.
Tedeschi's message in his landmark article Strengthen Your Team: "It's worth the effort.
(...) We should definitely try to get something positive out of this difficult time.
The crisis gives us the chance to grow personally and socially.
We should use that.”
Advice in the event of a disaster
One well versed in crisis management is Admiral Thad Allen, who led the post-hurricane Katrina disaster relief operation in New Orleans.
One of his trickiest tasks: closing the "Deepwater Horizon" oil well.
His valuable advice in an interview:
Crisis operations are about bringing all efforts together, not putting people under a single command
You need to understand the macro level of a problem to make a decision.
Only then will you know what needs to be done to achieve the desired effects.
You must also be able to communicate all of this.
His message: "Treat everyone you meet who is affected by the disaster as if it were your family member, mother, sister, brother or whatever."
You also have to name some core values that should underlie an action and that everyone involved can subscribe to.
Thad Allen's leadership lesson: "I've learned that leaders are responsible for their own morals. The boss can't walk in ignorant and casually say, 'Well, how are you today?
(...) Many of the crises I have dealt with have been terrible tragedies that have affected society as a whole.
A lot of people had loved ones to mourn.
The way of life of many people was threatened.
They need to understand and accommodate that personal concern, but they also need to maintain a constant focus."
control companies
Corona has forced almost all companies to switch to crisis mode within a very short time.
Hardly any company had a precise plan for a pandemic.
Many medium-sized companies would have needed a guide to show them the way through lockdown, slumps in sales and restructuring.
The consultants Gerogiy Michailov and Hans-Joachim Grabow created such a guide with 8 steps when they accompanied 33 medium-sized companies through the Corona crisis.
Many companies have now mastered steps 1 to 5 – from setting up a task force to communicating with stakeholders.
But steps 6 to 8 should be tackled urgently by some: developing scenarios, adapting the business model, testing crisis resilience.
The experts recommend companies to design scenarios on the basis of 10 to 15 success-critical assumptions about the most important value drivers, to gradually refine them and to continuously incorporate new findings.
In order to then adapt their business model in the next step, that means: "Bury the previous strategic plans, revise their business model and in the management team completely reconsider where the journey could go."
The last and if not the most important step: testing crisis resilience.
We recommend the check "How crisis-proof is your company?"
If your business model falters, don't panic.
Bain consultants Christ Zook and James Allen recommend "rediscovering the company's founding mentality."
Executives should take the following principles to heart: The company must greatly reduce complexity and unnecessary costs, renew its mission and organize itself in such a way that the main focus is specifically directed at customer contact.
Finally, leaders and employees should adopt a perspective found in business owners: avoid bureaucracy, make quick decisions and accept responsibility.
