Human behavior throughout history tells us that when groups of people are suppressed or living in fear, they avoid making decisions dampening progress, and ingenuity. One only must look at our darkest time in history, such as the Black Plague, where one-quarter of the population of London died between 1665 and 1666. Isaac Newton may have thrived isolated away from Trinity College during his “Year of Wonder”, but group societal progress and development did not.
The human reasoning for this, which applied in the 1600s and now COVID-19 times, is instability and fear of the unknown. During these challenging times as leaders, it may seem more natural to “hunker down” and avoid making tough decisions. During a crisis in an effort not to upset others or lose status in the eyes of their followers, leaders tend to concoct sophisticated justifications for putting off difficult decisions, and the delay often does far more damage than whatever fallout they were trying to avoid.
Business leaders must understand that in fact, hard decisions often get more complicated when they are deferred especially during a crisis. The need for rapid decision making is critical, understanding that most decisions can be reversed, but nothing can be worse than an idea or a decision never put forward during a crisis.
The most significant consequences occur when a leader misses an opportunity to help his team build resilience in the face of a tough challenge. Instead of learning to rally together to find creative solutions, they feel demoralized, confused, and even scared by their leader’s deceit.
The consequence of this common rationalization is people learn the wrong lesson to avoid mistakes at all costs and that “looking right” during a crisis is more important than “doing right.” Further, if leaders end up backing themselves into a corner with fewer options sub-optimal decisions may be made. Too often in crisis leaders will continue to ask for more data or analysis (Analysis Paralysis) instead of taking the risk and making the best decision possible with limited data which can save an entire organization during these challenging times. Postponing decisions to wait for more information might make sense during business as usual. But when the environment is uncertain—and defined by urgency and imperfect information—waiting to decide is a decision in itself. As Bruce T Blythe, CEO of Crisis Management International wrote: Crisis decision making is located somewhere between analysis and intuition.
Amid uncertainty generated by a crisis, leaders often feel an urge to limit authority to those at the top, with a small team making the big decisions while huddled behind closed doors. They should reject the hierarchical model that they might be more comfortable within normal times and instead involve more people, encourage different views and debate fostering creativity and risk-taking. This approach can lead to smarter decisions without sacrificing speed. Some small choices that leaders make in the short run could loom exceptionally large over the long term as the crisis unfolds. They can be hard to spot, but leaders must look for them.
In the normal course of business, many “big-bet” decisions are obvious when there is a large cost or major impact, such as acquiring a company, marketing a product in a new geography, or shutting down a factory, with these decisions. But some decisions that seem small or routine at first can have large long-term strategic implications. In an example related to coronavirus, Netflix has gone to lower-resolution streaming in some locations to ease the data load on information networks. While most people won’t notice the difference in quality, the decision could mean that the internet doesn’t crash, which would be a big problem when so many are working from home and children are relying on the internet to do their schoolwork.
When choosing leaders to rise above the rest of the pack during these challenging times, identify colleagues who have done as many of the three following things as possible to increase the likelihood of them being successful in the current times of uncertainty:
-Lived through a crisis (personal or professional) and shown their mental and personal resilience. For Multinational organizations, many of these leaders may be outside the US leading their markets in Asia, Eastern Europe, Latin America, and The Middle East.
-Made tough, unpopular decisions because it was the right thing to do, even though they took heat for it and potentially burned bridges or spent social capital.
-Expert in: Straight Talk – Willingly able to give bad news up the chain of command to leaders who didn’t want to hear it.
Unprecedented crises demand unprecedented actions. Lessons from past crises suggest that leaders are more likely to underreact. What is necessary is to take bold and rapid actions that would feel too risky in normal times. I.e.: Being rewarded for Daring to Try.
As an executive during a crisis how difficult decisions are made in your truly define an organization’s decision-making culture over time. Whatever temporary pain you might incur from making a tough call should pale in comparison to the precedent set that it’s important to take chances, make quick decisions, and put the organization’s success first.
At the operational or emergency response level it is true that life and death decisions will be taken, the decision is binary and those who made the decision will know very quickly whether the decision is successful or not. Sometimes it is those who go against training and procedures that survive and the ones who do what they are told and stick to procedures suffer. But the trickiest are those we call “big bets”—unfamiliar, high-stakes decisions. When you have a crisis of uncertainty such as the COVID-19 pandemic, which arrived at overwhelming speed and enormous scale, organizations face a potentially paralyzing volume of these big-bet decisions.
Make smart decisions quickly to guide their organizations through this crisis. Embrace them and continue to learn as you go. As one business leader, I spoke with recently told me when I asked how he was doing with his business: “Our company reinvented itself three times this week alone. We will continue this path until we find what works. With the Chaos comes opportunity!”
If you have any questions or would like help in the area of Compliance and Controls please do not hesitate to contact Frank at email@example.com or visit my website at www.ationadvisory.com. Ation Advisory Group has expert financial and operational experience in development, manufacturing, distribution, and sales spanning 55 countries and, six continents, delivering individualized, proven methods to build out and implement highly successful and sustainable country-specific goals. All executed with 100% FCPA (Foreign Corrupt Practices Act) compliance.