This article was originally published in Fast Company on March 28th. To read the original article, click here.
In recent weeks, I’ve spent countless hours on the phone and in meetings with boards of directors as well as C-suite leaders of nonprofit organizations grappling with the “Black Swan” event of drastic federal budget cuts affecting large swaths of the social sector in the U.S. While organizations working on international development programming were hit hardest in the initial weeks (with the likely shuttering of the United States Agency for International Development creating a $40 billion funding hole for the sector), domestic organizations are also grappling with the likelihood of steep cuts to federal grants and contracts. Those will affect everything from local food cupboards to social services programming to access to health services.
What has surprised me in engaging with and counseling disparate organizations is that, regardless of their line of work and programming, the most effective approaches to crisis response and management appear remarkably universal. Regardless of whether the organization or business is a small operator working in a community in the U.S. or a large, sprawling international conglomerate, there appears to be a consistent set of instincts and habits that leaders are drawing on to guide their decision making. What’s also striking is that pre-baked “scenario plans” are not present in any of these moments.
Instead, leaders and their boards are drawing on more nimble tactics and techniques—three of which are highlighted below—to execute real-time decision making and lead their organizations through an historically unique period.
1. PRINCIPLES, NOT PLANS
As noted above, none of the companies or organizations I’ve engaged with are relying on off-the-shelf scenario plans that are assumed to be good hygiene for any risk management efforts. Instead, leaders and their boards are spending more time articulating the key principles they want to drive their decision making in a fast-moving and information-poor environment. Those principles can range widely, but often reflect core values and priorities that are integral to the organization or company. They include:
- “Our priority is to protect our staff and save jobs. Profit comes second.”
- “We won’t cross certain ethical red lines just to stay in business.”
- “Optionality is the most essential asset for us in an information-scarce environment.”
- “Embrace the trade-offs; don’t fight them.”
While none of the above necessarily tell boards and leaders what to do, they do help constrain the universe of possibility and narrow in on more consistent decision making as events unfold. They also feel like a superior set of decision-making tools relative to fully fleshed out crisis or scenario plans that are almost always out of date as soon as the proverbial ink has dried.
2. INFORMATION IS GOLD
This may sound self-evident, but almost all crisis management situations involve information-scarce dynamics or entire information deserts. What I have heard articulated consistently across many organizations is the desire to invest limited emergency resources (of time, treasure, and talent) into filling information gaps as much as possible. Questions have ranged from, “Are our accounts receivable actually going to be paid?” to “When will we have sufficient policy clarity from regulators to make an informed decision?”
The best leaders recognize that actionable information in these environments carries a massive premium. They are working the phones constantly with peers, competitors, customers, and industry observers to glean as much as possible before committing to consequential decisions.
Do they feel they have perfect information at their fingertips before executing those major decisions (which might involve downsizing their workforce, liquidating investments, or shuttering business units that can’t be salvaged)? Absolutely not. But they are buying themselves every minute possible to harvest as much new information as they can to inform those trade-offs before they commit—even to the point of spending down strategic financial reserves to extend their decision-making-time horizons.
3. DISRUPTION IS ALWAYS AN OPPORTUNITY
A final theme that has struck me as remarkably consistent across leaders and boards: an obsessive focus on trying to position organizations and companies to capture the upside of sudden disruption once the dust settles. Leader after leader has said nearly the same thing, whether focusing recruiting efforts on the flood of talent hitting the streets, quietly exploring merger and acquisition opportunities as the market thins out, or repositioning product and service lines to better align with their “new normal.”
Despite the chaos swirling around them, these leaders and their boards emphasize the unique opportunities afforded by once-in-a-generation market disruptions. “We want to be one of the winners when this is all said and done,” is how one executive put it to me, distinctly emphasizing growth and success over merely surviving. That attitude takes gumption, but is also what separates the good leaders from the great leaders.
Challenging operating environments are never fun to lead in, regardless of an executive’s or board’s experience having done it before. But to quote a great poet, the highest performing leaders in moments of crisis are the ones who embrace rather than shy away from the reality that “the only way out is through.”
