Offering Predictability in Turbulent Times

In a recent article for McKinsey, Stanford Professors Robert I. Sutton and Hayagreeva “Huggy” Rao offered some highly useful tips for leaders navigating the current tumultous environment.  They offer key insights regarding predictability and understanding.  Sutton and Rao argue that leaders must try to offer as much predictability as possible to their employees.  Moreover, they have to explain the rationale for their actions clearly and concisely.  Here's an excerpt:

The protective powers of predictability are a central theme in psychologist Martin Seligman’s classic research on learned helplessness. His “safety-signal hypothesis” was inspired by the air-raid sirens used in London during the Blitz, in 1940 and 1941, when German bombers attacked the city night after night. Because England’s warning system was so reliable, Londoners could go about their business without fear of being killed by German bombs so long as the sirens were silent. When the sirens wailed, they knew it was time to scurry underground to “the Tube” and other safe locations.

The upshot of Seligman’s work is that threats to well-being do less harm if reliable signals enable 

people to know when they are safe from the threat versus when it is imminent, fear is warranted, and it is time to take action to minimize risk. Conversely, if people never feel safe, their feelings of powerlessness cause them to suffer constant anxiety, despair, and, ultimately, physical and mental illness.

While predictability is about the potential for bad (or good) things to happen (or not), understanding is about the why. We humans have a burning need for explanations of important events in our lives. When events, especially distressing ones, are uncertain—and clear-cut answers aren’t forthcoming—people get anxious and generate plausible explanations. Once people invent, articulate, and spread such imagined explanations, they can have a hard time letting them go, no matter how incomplete, biased, or downright wrong they are, suggests research by Prashant Bordia and his colleagues.3

Dampening the anxiety that fuels distracting rumors requires explaining decisions in enough detail to convey that you, as a leader, are treating the people affected with nuance and care. Leaders also do well to rely heavily on simple headlines and repetition, because the anxiety provoked by crises can make it hard for people to process complex information.

Micromanaging in a Crisis (or not)

Source: CrystalLinks.com

I came across a very useful perspective on micromanagement during a time of crisis this week. Jeff Hyman is an adjunct lecturer of innovation & entrepreneurship at the Kellogg School of Management. Hyman serves as the chief talent officer of the firm Recruit Rockstars Executive Search. Prior to that, he served as the CEO of a weight-management firm, Retrofit, that he also founded. Hyman explains his perspective on when to zoom in and when to step back in this brief excerpt of an article posted on the Kellogg Insight website. 

During this extraordinary time, there will be functions critical to the business that you will have to micromanage because, without your attention, there might not be a business to lead. At the same time, there are going to be some functions that you absolutely need to trust your team to execute on their own.

For example, under regular circumstances, a CEO would not spend time thinking about cash collections or accounts receivable. They have a CFO whose team handles that function. But if, say, half your revenue vanishes overnight, or your early stage company is not yet profitable, or the venture capital deal you had lined up falls through, cashflow takes on a new urgency.  So, micromanaging might include working with your accounts-receivable team to determine whether to negotiate creative, flexible deals that still keep cash flowing into your business, especially at a time when many of your suppliers may want to wait on paying you. “Cash is the oxygen of your business,” Hyman says. “If you’ve only got six- or three-months’ cash on hand, you may need to be way in the weeds on cash collections if your company is going to live to fight another day. You may require daily reviews with your accounts-receivable team to understand when you can expect payments from customers.” 

Just as you will have new roll-up-your-sleeves tasks, other projects may not demand much of your attention at all. That product that you had intended to launch next year, and on which you still want to keep moving forward, can be delegated to trusted team members.

“It’s very tempting in times of uncertainty to find this false sense of certainty by trying to micromanage everything,” Hyman says. “But you can’t micromanage virtual teams. So you have to trust that you’ve hired well. They may get things done almost the way that you would have done it. You have to be okay with that. It’s much more important right now to get the few things right and get them right enough versus getting them perfect.” Be clear with your team about who has responsibility for these new projects, as well as on how (or if) you would like to be involved in any decisions.  “You can let them know, ‘I’m letting you run it. Keep me posted. Let me know what you need from me,’” he says.

What Should We NOT be doing?

Source:  Flickr

During the current COVID-19 crisis, many organizations have had to be very clear about their priorities.  With tremendous pressure on the business, and limited resources, companies often have moved quite nimbly to focus time, attention, and money on only the most important initiatives and activities.  Leaders have been able to push less important or urgent issues aside.   The crisis has really made organizations focus on what is truly most critical to achieving the mission, maintaining viability, and serving customers effectively.   

When the crisis subsides, companies should not forget the lessons learned during these trying times.   It will be only natural as some semblance of normalcy returns for initiatives and activities which did not receive attention or resources to return to the agenda post-crisis.  However, leaders should proceed with caution in that regard.  Every organization should continue to ask at that moment:  What should we NOT be doing?  In other words, are some activities simply not value-adding or do they not deserve to return to the agenda?   Being disciplined about priority-setting post-crisis will be essential to recovery and success.  It's easy to lose that discipline when the urgency of a crisis subsides.  The best organizations will not lose that sense of focus around resource allocation moving forward.  

Tapping Into Your Employees' Creativity in a Time of Need

Bryant University just released this short article that I've written, titled "Tapping Into Your Employees' Creativity in a Time of Need."  

During this tumultuous time, organizations face a variety of perplexing problems and challenges. Some of these issues may seem intractable to the senior management teams at many firms. Executives will need to think creatively to develop solutions that meet the pressing needs of their customers and other constituents. The answers will not always come from the top. The best leaders will tap into the creativity of all employees, no matter their level in the hierarchy or level of formal authority. For far too long in far too many firms, executives have sent the implicit message that they desire compliance and control, rather than creativity. They talk a good talk about innovation, but don’t walk the walk. That must change during this time of crisis. 

What can senior leaders do to unleash the creativity of their employees to solve a myriad of challenging problems? Here are five simple strategies that they can employ: 

1. Assemble several virtual “kitchen cabinets” of employees who are likely to bring fresh perspectives. Create a direct line of communication between the top team and these kitchen cabinets. For instance, bring together a group of highly talented young employees, many of whom will not be beholden to the conventional wisdom or past patterns of behavior. Ask them what assumptions need to be challenged and what processes need rethinking. Encourage the youngest to teach the oldest about new trends in technology, consumer behavior, and the like. Or, assemble a team of front-line employees who are interfacing with customers directly each day, and ask them what obstacles they are facing. Then, ask them how senior leadership can help and support them in addressing these challenges. 

2. Invite employees to reach outside their industry for creative ideas. Specifically, encourage them to reason by analogy. Are you facing a customer service problem? What situations are analogous to your own? Invite employees to consider what firms in other industries might be doing to address a similar issue. Or, ask them how people with different technical backgrounds and expertise might approach a similar problem. Then encourage them to adapt and apply those lessons to your organization. 

3. Champion experimentation. Offer to provide resources and other support to employees who design simple, low cost, rapid experiments to test out new ideas and solutions. Insure them that people will not be punished for failed experiments, provided that employees demonstrate that they are learning from mistakes and sharing those lessons with others throughout the organization. Create recognition and offer small awards for people who conduct the most interesting experiments. 

4. Invite employees to role play other key constituents. How might our customers react to a particular situation or proposed solution? What about our suppliers or other external partners? Research shows that we often are more creative when we imagine that we are someone else facing a similar predicament. Imagining ourselves in someone else’s shoes can stimulate fresh ideas. 

5. Create virtual brainstorming sessions where small teams can come together to generate many divergent ideas in a short period of time. Ask participants to withhold critique during this time, focusing instead on building on one another’s ideas. Encourage them to propose ideas that may not seem feasible, or that even may seem a bit quirky or unconventional. Tell your employees that a discussion of feasibility will come later, after a wide variety of options have been put on the table. 

These strategies offer practical ways in which leaders can engage with a broad set of employees in critical problem-solving work. Most importantly, though, leaders need to send the signal that they genuinely believe that they have much to learn from their employees. They need to demonstrate some vulnerability and acknowledge what they do not know in these turbulent times. Stress that you don’t have all the answers and that you appreciate all the help you can get. Identify specific issues about which you believe others may have something valuable to contribute. Making people feel valued in this way can often stimulate them to come forward with terrific ideas. In sum, if you acknowledge you don’t have all the answers, and simply pose a few thoughtful questions to your people, you will be amazed at what you can learn from them. 

Doing the Right Thing: Kent Taylor at Texas Roadhouse

Source: bizjournals.com

This morning, I read some terrific news about a leader doing the right thing for his organization amidst the COVID-19 crisis. Kent Taylor is co-founder and CEO of Texas Roadhouse, the popular steakhouse restaurant chain. According to this article by Leo Shvedsky, Taylor has chosen to give up his 2020 salary and bonus.   He's giving the money to his employees who are hurting financially due to the crisis.  He's also made an additional $5 million donation to help his people.   Here's the excerpt:

Texas Roadhouse CEO Kent Taylor announced on Thursday that he is forgoing the rest of his 2020 salary and bonus and instead directing the funds toward paying his employees during the coronavirus outbreak. The remaining salary and bonus both amount to $525,000 each for a total of $1,050,000.  "Kent Taylor has always said that Texas Roadhouse is a People-company that just happens to serve great steaks. His donation of his salary and bonus to help employees is the embodiment of that saying," a Texas Roadhouse spokesperson told The Hill. "We are blessed to have his leadership."  The spokesperson also told The Hill that Taylor has already donated $5 million of his personal funds to Andy's Outreach, a non-profit run by Texas Roadhouse to help employees in times of need.

Paul Levy, former CEO of the Beth Israel Deaconess Medical Center, argues that all leaders should be taking these types of actions. In a blog post for Harvard Business Review, Levy, Atta Tarki, and Jeff Weiss write:

"If you are doing cut backs to save job losses, you must lead by example and do cut backs that impacts your own day-to-day as well. If you don’t, there is a danger that your staff will feel like saps, doing sacrifices while the C-suite continues unaffected. Get a commitment for a pay cut from your senior leaders. As CEO, you should take the largest salary cut yourself."

20 Years Later: The Mount Everest Tragedy

Source: National Geographic

This week marks the 20th anniversary of the tragedy that took the lives of Rob Hall,  Scott Fisher, and other members of their expeditions. Many of you may have read Jon Krakaeur's book, Into Thin Air, which chronicled the events of May 1996 in detail.  Others may have watched the Everest movie that came out last year.  Still others have seen the tremendous documentaries produced by David Breashears about the events of May 1996.  

As most of my blog readers know, I've conducted extensive research on the decision-making processes of Everest climbers.    As part of that research, I've spent a considerable amount of time learning about the events of May 1996, including through multiple conversations with the leaders of the IMAX expedition team, Ed Viesturs and David Breashears.   Ed and David turned around, while the Hall and Fisher teams continued up the mountain.   Later Viesturs and Breashears helped rescue the survivors of the tragedy that took place when a blizzard occurred.  

What are some lasting leadership lessons from that tragedy?  

1.  Great leaders exercise restraint.   As David Breashears has told me, the best leaders don't simply order you up the mountain no matter what.   They listen to others' ideas before expressing their views.  They must be willing to gather input from a variety of people.  Unfortunately, he says, some leaders are not willing to listen to dissenting views.   The best leaders create a climate of psychological safety, where everyone is willing to speak up.   After gathering input and advice from multiple sources, the leader can make a more informed and thoughtful decision.  

2.  Great leaders don't attribute all their past success to their own qualities and choices.  Instead, they acknowledge that past success hinged upon favorable environmental conditions, a strong team to support and assist them, an effective support network back at base camp and at home, and a significant dose of good fortune.   When leaders begin believing that past success is all about their own excellence, and fail to recognize other contributing causes, they get in big trouble.  

3.  Great leaders recognize how cognitive biases can impair decision making, particularly in stressful situations.  They don't escalate commitment to failing courses of action in the presence of substantial sunk costs.   In other words, climbers don't simply keep climbing because they have put so much into the expedition (money, effort, time, and other resources that they cannot get back).   You can't look back; you must look ahead.  Don't keep moving forward simply because  you don't want to waste the investment you have already made.  Don't throw good money, or good effort, after bad!  Other biases include confirmation bias (looking for data that confirms what you already believe) and compensatory behavior (taking more risk because you know a safety mechanism or system redundancy is in place; in Everest's case, carrying supplemental oxygen can create a false sense of security according to Ed Viesturs).  

4.  Great leaders don't build rigid plans.  As Dwight Eisenhower once said, "Planning is everything.  Plans are useless."   In other words, be incredibly prepared.  Be ready for all scenarios.  Prepare meticulously.  However, once the execution of your plan begins, be ready to adjust and adapt to conditions on the ground.  Don't build a rigid plan in a turbulent environment.  Retain flexibility.  Don't just try to work harder to "get back on plan" when things start unfolding in ways you did not predict.  In fact, great planning is not about predicting the future.  It's about preparing for multiple scenarios that might unfold in the future.  

5.  Great leaders build a team around a shared vision, not simply a common goal.  What do I mean by that?  The Hall and Fisher expedition team members certainly all had a common goal: to reach the summit (we might argue that the more appropriate goal is to return safely to base camp).  The problem, though, is that each person was focused on their own personal attainment of that goal.  They didn't strive necessarily to achieve the summit as a team.  Contrast that with the shared vision of the IMAX team there in May 1996.  They strove to put a fifty pound camera on top of the mountain.  They wanted to create a great documentary.  It was not about individual accomplishment; it was truly a shared vision to create something extraordinary.   

For more of my work on the 1996 Everest tragedy, see the HBS case study that I wrote, as well as the California Management Review article that I published.  In recent years, I also co-created (with Amy Edmondson) the Everest Leadership and Team Simulation, available from Harvard Business Publishing.