Crises are defining moments for leaders

HARVEY SCHACHTER

harvey@harveyschachter.com

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7 Lessons For Leading In Crisis

By Bill George

Jossey-Bass, 137 pages, $23.95

Bill George was 27, a young business-school graduate looking forward to his new assignment as assistant general manager of Litton Industries Inc.'s microwave oven business. He was packing his bags for a move to Minneapolis when the radio gave him some shocking news: The U.S. Surgeon General had just announced that microwave ovens could be hazardous to an individual's health.

The next morning, he arrived at his new office to find chaos and despair. The fledgling organization had just one product: microwave ovens. If the Food and Drug Administration pulled them from the market, they would be out of business.

A week later, the corporation's executive vice-president arrived on the scene and directed them to recall the first thousand products, much to the dismay of customers who wanted them, and Mr. George, who believed the ovens to be safe. But it proved a wise decision. The conservative, more ethical course led the division to recognize that its designs were in fact not robust enough to meet the forthcoming government standards.

Crises are defining moments for leaders. "Like being in a war, crises test you to your limits because the outcome is rarely predictable. You not only have to use all your wisdom to guide your organization through it, you must dig deep inside yourself to find the courage to keep going forward," Mr. George, now a professor of management practice at Harvard Business School and a former chief executive officer of Medtronic Inc., the world's leading medical technology company, writes in 7 Lessons For Leading In A Crisis.

In his previous book, True North, Mr. George outlined the importance of having - and staying true to - ethical principles. Staying on course to those True North beliefs is even harder in a crisis.

"Leaders aligned with their True North are prepared to guide their organizations through severe situations because they know who they are. They have the self-awareness, self-confidence, and resilience to take responsibility for their failures and lead others through the rapidly unfolding - and often unpredictable - sequence of events. They rise to the occasion, find leadership abilities they never knew they had, and come through with shining colours," Mr. George observes.

The seven lessons he offers to help you lead in a crisis are:

Face reality

Until you acknowledge that you are facing a serious problem, including your own role in creating it, you can't move forward to develop a solution. "Denying reality has destroyed more careers and organizations than incompetence ever did. Instead of asking yourself why it is so difficult for other leaders to face reality, ask yourself instead, 'Why is it so hard for me?' " he writes.

Don't try to be an Atlas

Unlike the Titan in Greek mythology, don't try to carry everything on your shoulders. Get help. Reach out to others within the organization and friends who can help support you through this period. "This is a great period to strengthen chemistry within your team because the strongest bonds are built in crisis," he notes.

Dig deep for root cause

Don't jump to a quick fix, as tempting as that may be. You need to dig deep to find the real problem and then develop a permanent solution to ensure the crisis doesn't come back to bite you.

Get ready for the long haul

At the start of a crisis, you are often only looking at the tip of the iceberg. Expect that things might in fact get worse. "In a crisis, cash becomes king," he says. Never waste a good crisis

This is your best opportunity to make major changes in the organization because resistance to change is reduced. Move aggressively to strengthen your organization beyond the crisis period. Mr. George points to General Motors Co. as regularly avoiding the chance to enact deep change through the many crises it encountered in the past quarter century. The result? Bankruptcy.

Follow True North

In a crisis, you are under the spotlight and it's vital to adhere to ethical principles, rather than succumb to pressures. "In an era of instant media focus on disaster and problems, the hunker-down strategy won't fly," he says. "Leaders are compelled to get out in front of the story immediately."

Go on the offensive When you start to emerge from the crisis, the market won't look the same as beforehand. Don't wait for business to come back. Instead, reshape the market to play to your strengths.

A crisis can hit leaders at any level of the organization, as Mr. George illustrated with his own experience with microwave ovens. This lean but informative book sets out some useful principles and offers some memorable examples of leaders who excelled at - or fumbled - crises.