It is during times of crisis that great leadership is displayed and great leaders are forged.
When this current coronavirus crisis settles, and history shows it will, great leadership will have mattered for many companies. For some, it will have been the difference between survival and failure.
I had a conversation with the CEO of a client fewer than seven days ago and the following question was asked: “What will we do if revenue drops 50% for next month?”
What felt like a doomsday scenario has grown into a possible scenario, not just for this company but for many. Where is the play book? What are the right answers? These are the questions being asked, and there are no right answers. This is why leadership will matter.
Circumstances are changing daily, and uncertainty seems to be accelerating. Decisions must be made with vague facts. Employees are too distracted with concerns about their own family and their own future to be considering the company’s future. The news from every source seems to be leaning toward the end of the world. Wealth is being eliminated by the stock market at an alarming rate. Plus, kids are home from school for the next few weeks and maybe more. Oh boy. During these times, we will see whether our leaders ‘have what it takes.’
I have spent many hours over the past week in discussions with current and past client CEOs. They are all looking for reassurance and guidance on how to lead during this difficult time. They are finding there is no play book to reference; it comes down to real leadership. Every company is situated differently, and every crisis has a different impact; however, great leaders shine during a crisis and there are some consistent qualities of these great leaders. In these ‘unprecedented’ times, what does leadership look like? In my experience, it comes back to a few basics:
Your employees need to know you are in charge. In today’s environment, this may not be ‘in person’ visibility the way we think of in the past. It means that you are seen at the helm and your people feel it. Technology provides us a lot of ways to make this happen outside of in person meetings: video conferences, tweets, email and other tools. Your employees need to see your presence, even if it’s not with their eyes.
In many ways, this is what it means to be visible today. There are many constituents who need to hear from the CEO. Certainly employees because this virus is making them uncertain. Should they come to work? What if their kids are home from school? What if they do not feel well, but they have no sick time? Is the company going to survive? Are we going to be open? Should I cancel meetings? These types of questions are going through every employee’s head. Even if you do not know the answers to these specific questions, they need to know that decisions are being made, and being made thoughtfully.
In addition, you need to be in regular communications with your customers, vendors, lenders and anybody who is significantly impacted by your business. These constituents are all feeling uncertain and will appreciate you being the leader in making these communications happen. Less great CEOs may avoid these conversations because they do not feel they have all the information required and they do not feel they have a plan. In crisis, just communicating what you see as the current circumstances and what decisions you are making can help these partners of the company feel more confident. Importantly great leaders know these communications are a two-way street. As they disseminate information, they also are gaining additional perspectives on market conditions and other challenges as well as the options available to face them. These conversations allow continued learning and adapting.
Be Decisive Yet Flexible
These may seem to be contradictory statements. However, we can find ourselves too panicked to make decisions as we look for more data and do more research while the ship ‘takes on water.’
Great leaders cut through these problems. They use the data and information available right now to make decisions right now. Then they continue to monitor for new information and course correct. It is OK to change your direction as more information arises. Go back to step two, communicate. Let your constituents know when circumstances are changing and why decisions are evolving. They will appreciate being informed and that someone else is making the difficult decisions. If you own a bar and plan on being open — with an emphasis on social distancing of course — but liquor stores close, that is new information which will alter your path. We must be flexible, but we also must be decisive.
Be in Regular Contact with Your Core Team
Your core team should include those required to assist in making decisions quickly in today’s situation. This group will include your inside stars and outside advisors, lawyers and other critical advisors. However, this group may not include all executives, and candidly, probably should not. Some of your executives may not have the skills or the emotional stability to help in crisis. If this is true, do not include them just because you want to be nice. Crisis calls for bringing together your best. Survival is more important than being nice. In crisis, the leaders are those who can pivot quickly in order to reduce damage and take advantage of opportunities. You can work and lead while others are watching YouTube videos of empty store shelves.
Where you have shortfalls in your team, use your outside advisors. These advisors can provide critical perspectives and you may benefit because they are less impacted by the decisions you make whereas some of your inside team might be impacted by decisions being contemplated.
Be Clear Minded
The problem with the many crises, and in particular this pandemic, is that it is impacting our families as well. We are not just trying to run our company in a difficult market, we are facing a problem impacting our family. We are reading stories about post-Armageddon shopping, schools closing, malls closing and even the bars closing for St. Patrick’s Day. It can be very easy to focus on all of this noise rather than the great uncertainty happening in our particular industry. But it is critical to be clear minded and stay focused.
Great leaders focus on what is happening and how that impacts their company and their industry. What do these changes mean to customers, employees, the company and vendors? What actions can we take to mitigate these impacts? Be focused on what is controllable and what is not. Know what is happening in the uncontrollable areas, but focus decision making energy on those few things that are controllable.
By bringing together your core team, being clear minded, decisive and flexible, you are doing what you can with the available information. It is OK to not have all the information, and it is OK to communicate that you are making decisions with the available data. Be confident, display this confidence and communicate that you are doing all you can with what you know and that you plan to change course if needed.
Stay True to Your Core Values
It is harder in times of crisis to be true to your values, but these times are also when our values matter the most and when they are sharpened. Be honest. If you do not know something, be clear you are using the best available information right now. Do not try to fake it, it will show.
Know Your Liquidity
No matter what, you need to understand your near-term liquidity and how changes to the business are impacting your available cash. You may be able to absorb losses during this crisis, but you must assure that you do not run out of cash. The government may come through with assistance for your industry, but if you run out of cash in the meantime, that assistance will be of little help. Weekly cash flow forecasting, with flexible assumptions for “what if” planning, for the next 13 weeks is a critical tool during this time.
This article was repurposed with permission after originally appearing on PhoenixManagement.com.
Brian F. Gleason is a senior managing director and shareholder at Phoenix Management Services and has managed or participated in more than 150 turnaround engagements. For the past 25 years, Gleason has been a crisis manager providing leadership to companies experiencing significant disruption. He is a Certified Turnaround Professional (CTP).