May 11, 2004      



The authorsIt's inevitable. Bad things happen to good companies. What's worse is when good companies don't know how to handle the bad things that happen to them. This month we discuss how to handle an external crisis with internal alignment.

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-Rob and Anne-


The Trusted Leader

Previous Issues:

When a Leader Defects

Pulling Along or Pulling the Plug?

Conflict in the Inner Circle


Next month's serving of Dim Sum: When a Leader is Sick


Your organization faces a crisis from the outside, such as a significant market downturn, or the loss of a major customer. The inner circle isn’t coming together to deal with it; you can’t seem to get the people at the top to “gel” into a team around the crisis. People seem to be acting alone, with little or no alignment.

Things to think about: What can be done to galvanize people when time is short? More broadly, what level of “team” at the senior level is right? Do the people at the top really have to function collectively?

The first order of business is dealing with the crisis. First and fast, get people together to focus on it, and start working a crisis plan (for suggestions, see The Trusted Leader chapter 12, In Times of Crisis).

As for the larger issue, it's a no-brainer that the people at the top of an organization have to trust one another a lot, and function as a high-performing team if the organization wants to gain any traction and truly achieve (and surpass) its long-term goals. If you have a lot of people leading as individuals, you’ll end up with a lot of short-term successes that don’t contribute to the company’s success as a whole. One division will cannibalize another; customers will lose out as different lines of business compete internally; employees will focus more on internal battles.

The people in this scenario have forgotten who the real enemy is. In order to jog their memories, you need to create a set of group incentives. You need to set forth a common goal, and monitor and reward progress towards that goal. The metrics, in other words, need to incite team behavior. The goal could be as simple as getting over a particular “hump” by having the group complete a particular effort. Go for completion rather than initiating something new. The rewards will be twofold: 1) a completion of the task, and 2) a refocusing of the group’s attention.

Finally, don’t declare “victory” and return to the old ways when the battle is won. Be ready with another goal, and another.

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How about you? Have you had any interesting experiences handling an external crisis? Let us know.


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