The economic crisis is presenting leaders with unforeseen challenges. Many of those leaders are not prepared to respond effectively. They have either never been trained to do so, or they have no real-life experience on which to draw to help them navigate their way through this crisis. Unfortunately, this is exactly the time when these leaders need to lead.
A former boss used to tell me that "every crisis is an opportunity." I've had a lot of opportunities since my entire career has been spent in healthcare, an industry that has been in crisis mode for the past 20 years. In that time, I've learned how to turn a crisis into an opportunity. Here are five actions that enable leaders to do the same:
1. Focus on the problem at hand. An organization can only have ONE No. 1 priority. Today's economic crisis is clearly that priority, which means we have to temporarily stop focusing on less-important things. We can't afford distractions. Look at your organization's strategic plan, objectives and timeframes and decide what the organization will stop doing. Look at your calendar and decide what you will stop doing. Time is a leader's most precious asset. During a crisis, many leaders will keep their normal schedule and just add more hours to their day. This is a short-term strategy that is not sustainable over the long haul. Once you have narrowed the priorities for you and your organization, share this information with your organization.
Don't hide from a crisis and hope it will go away. No matter the strength of your organization's balance sheet, the economic climate can quickly turn assets into liabilities. Every day you do not focus on this crisis and its impact on your organization is another day further behind you'll be in responding.
Employees and key partners are waiting for decisive action, both from the organization and from you. They will welcome and respect your decisions. Success will take your undivided attention.
2. Stick to your guns. Never compromise on values. In a crisis, you may be tempted to do things that are not consistent with your values. Your honesty, integrity, courage, and commitment to excellence are critical values that can guide you through uncertain times. One reason we are in this economic crisis is because many leaders focused on achieving quarterly earning projections or their own incentive compensation goals and they bent the rules to achieve the desired results.
Studies confirm that employees do not trust or think highly of their leaders. That doesn't mean employees and key partners still don't look for someone they can believe in.
I have witnessed the power of leadership integrity in my own career. Years ago I was a new CEO of a hospital that had to lay off 120 people. I called a town hall meeting to announce the job cuts. Keep in mind that the employees had a reputation for being very "anti-administration." During the meeting I shared the current financial situation and the impact the layoffs would have on the future performance of the hospital. At the end of my presentation there was silence, then a question or two. Finally, an employee said to me that "this was the first time someone has told us the truth so we can understand our situation." What followed was a complete surprise – applause! From that moment on my executive team enjoyed a great working relationship with the employees because they felt we could be trusted.
3. Stop digging. It's an old saying–"When you are in a deep hole, stop digging." During an economic crisis you need to learn which products or services are profitable and which are not. For the money losers, find out what's causing the problem (don't guess!) and address the issues. Make the hard decisions to correct what can be corrected quickly. The longer you delay the more cash you will burn through.
Most organizations have kept certain products or services around too long. Eliminate these first. Those that have recently turned unprofitable and whose potential for future profitability is low should also be quickly eliminated. Do it at once so the organization can grieve the loss of the employees associated with those services and move on. Incremental elimination of programs or services will confuse employees and create unsettling conditions.
4. Every crisis is an opportunity. Think growth! What products and services can be created or expanded to help grow your way out of the current crisis. I once heard someone say "you can not shrink yourself to greatness." There is only so much expense you can take out of an organization. The future of your organization's survival depends upon growth.
In the book Results Based Leadership, the authors identify three ways to grow: expand your geography, offer new products/services, or offer additional services to existing customers. To expand geography, understand where you draw your customers from and why. Using market research, decide where to expand to draw new customers for existing products and services.
This is an excellent time to innovate because customers always want timely and cost-effective new products and services. For example, develop and offer a new type of surgery that was approved by the federal government to be offered in only a handful of hospitals throughout the nation. Being the first will definitely help gain new market share as long as the hospital successfully produces high-quality outcomes.
Finally, offering additional services to existing customers can be easy to do since you already know your target audience. Too often growth is not considered during an economic crisis. Courage to take a risk and innovate can be just what your company needs to survive and thrive.
5. Communicate, communicate, communicate! Be open, brutally honest and answer any and all questions from your key constituents, especially your employees. Many leaders hold back on providing information during a crisis either to protect the organization's reputation or so as not to look bad if they cannot answer a question. Employees are not stupid. They know things are bad. What employees appreciate is honest, accurate and timely information. They also want to know how this crisis is going to affect them personally.
When sharing information with employees, remember to anticipate questions about how your decisions will affect them in terms of job security, benefits and work schedule. If a question is asked that you can not answer, don't be afraid to say you do not know. Promise to get the answer and then follow up in getting the answer. Finally, share that answer with everyone, starting with the individual who asked the original question. This simple approach will help the leader develop additional credibility with the employees.
One more important message for leaders to provide during a crisis is a vision for the future. In a recent Harvard Business Review article titled "To Lead, Create a Shared Vision," authors James Kouzes and Barry Posner point out that 72% of colleagues and 88% of senior executives want a leader who is looking forward. Key constituents want to know where the organization is going and how they fit into that plan. The authors say that the best way to connect with employees in the future is to spend time with them in the present. Get out, make rounds, ask questions about the future and most importantly, listen!
Profound lessons can be learned from leading during crises. Awareness of these five steps can help you not only survive today's economic meltdown but be well-positioned for growth when the economy recovers.
Dan Sinnott is president of Sinnott Executive Consulting. He may be reached at Dan@Sinnottexecutiveconsulting.com.
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