In studies done at Stanford University on the career path of
those who become chief executive officers of Fortune 500 corporations,
the researchers discovered that “The ability to function
effectively in a crisis” was the most important single quality
of great business leadership.
However, they made an important observation with
regard to crisis management. They found that the ability to
deal with a crisis could not be taught in a classroom or with
case studies. It was only in an actual crisis that a person
demonstrated whether or not she was capable of handling a
crisis at all.
Amidst the turbulence of today’s business world, you will
experience a business crisis of some kind every two or three
months. By definition, a crisis comes completely unbidden
and unanticipated. Like a Mack truck coming out of an alley, it
hits you with no warning or opportunity for you to prepare.
And it is at this moment that you demonstrate the quality of
your character.
“The only inevitable event in the life of
the leader is the recurring crisis.”
—PETER DRUCKER
Epictetus, the Greek philosopher, wrote, “Circumstances do
not make the man; they merely reveal him to himself.” The very
best leaders are those who are at their best when facing a situation
of unexpected danger or reversal. It is only in crisis that you
demonstrate your ability to remain calm and cool under fire.
In psychology, there is a powerful principle called “mental
rehearsal.” You can prepare for a crisis in advance by rehearsing
how you will respond when the inevitable crisis occurs.
You mentally prepare and you resolve that you will remain
calm and in control, no matter what happens. Then, when the
crisis arises, you will be ready to respond at your best.
Crisis Anticipation
The ability to anticipate what might happen in the future, and
then to inform all concerned parties of the roles they will play
The Principle of Unity of Command—One Person in Charge
should a certain event occur, is a critical part of achieving unity
of command.
Royal Dutch Shell is famous for its commitment to “scenario
planning.” The company has invested millions of dollars
and decades of time and research in thinking through and
preparing for various scenarios that might occur to interrupt
their worldwide business. By 2000, they had fully developed
more than 620 scenarios covering every possibility from
pipeline ruptures in the Arctic to coups d’état in oil-producing
African nations. No matter what happens in the world of oil
production and distribution, they have an alternate plan
already prepared and ready to go.
One of the most important exercises you engage in while
running your business and your life is to “play down the chessboard.”
Look into the future, six months, twelve months, and
even three to five years. Make a list of the three to five worst
things that could possibly happen in your personal and business
life. What are they?
Imagine the loss of one or more of your major customers.
Imagine your bank cutting off your credit. Imagine your product
or service becoming obsolete or illegal. Imagine one or
more of the key people in your business dying or leaving the
company. What are the very worst things that could happen
that could threaten the survivability of your business? What
could you do to guard against them occurring?
Throughout history, until the 1800s, battles were directed
by the general from his command post. Messengers and riders
brought back information on the development of the battle,
and the commander immediately made decisions to move or
redeploy his forces. The ability to function well in the midst of
a battle was essential for ultimate victory.