Leading out of a Crisis

Before founding Holos, we were invited to join the teams helping two global businesses navigate their way out of existential crises. As Holos, we had the opportunity to do it again for a third time. However, only partially did all three projects meet their potential outcomes. Were they asking too much of themselves, or had they not reckoned with the scale of the issues we uncovered? Or, quite simply, was what was achieved enough?

There are fundamental lessons to share from these experiences, lessons that seem increasingly relevant in today’s pressurized environment.

Lesson 1 – Align Your Executive Team

With regulators closely monitoring the organization and the operating license at risk, leaders in our first example were forced to focus intensely on ‘shifting culture.’ We were part of a team that designed and ran a values and behaviours program to trigger that shift. It reached more than 130,000 employees in over 40 countries in under six months. Employees took it seriously, appreciated, and believed in the values, adjusted their behaviours, and, crucially, their expectations of each other and their leaders. But did the benefits of the change program manifest in a new way of working? The regulator backed off, and the operating license was secured. However, the CEO appointed to drive the values-based culture change was replaced—a clear signal to the remaining Executive Team that overtly championing the change could be career-limiting and that role modelling the new behaviours was possibly not required either. In the 11 years since, the company has failed to achieve more than 60% of its pre-crisis profits.

What can we learn? First, it is vital that an executive team aligns around a vision for a positive post-crisis future. Without that, they cannot begin to agree on the “target culture” needed to deliver the vision. Only when they agree will they understand the impact of their collective behaviours and actions on their vision and take responsibility for role-modelling the shifting culture. Second, the public commitment and role modelling by the Exec are essential first steps to encouraging the next circle of leadership by proactively supporting them and openly reinforcing values-based behaviours, especially through difficult decisions and stressful challenges. Third, with an urgent external imperative, motivating culture change across the rest of the organization at the same time will prove a good investment in the long term, provided the leadership is seen to be on the same journey themselves. If lived behaviours don’t match expectations, trust will be damaged, and sustained success will be compromised. However tempted leaders may feel to revert to old habits, it is the courage to adapt, embody, and role model the habits of the target culture that will reap rewards.

Lesson 2 – Never Waste a Good Crisis

In our second case, a wide-ranging piece of work assessing ethical culture and associated risks was underway when the crisis occurred. As a consequence, a leadership program already underway was shelved, and a brand-new format and content were created. It needed to resonate with thousands of senior leaders across the world. Crucially, the program design focused on values, decision-making, listening, empathy, and personal behaviours. It pulled no punches—the culture shift took hold, and the company has not faced similar crises since.

Could the company have gone further? As many of the great and good have been quoted as saying, “a crisis is a terrible thing to waste.” At this point, leaders could have focused their vision on something positive and inspiring (beyond merely keeping out of trouble) and generated a competitive and sustainable advantage. Today, although profits and share prices are strong, the company is far less relevant or influential than it was before the crisis. It is struggling to persuade shareholders to let it adapt to a fast-changing market. If they had been more strategically courageous and ambitious back then, and connected culture with commercial strategy, they could have used the opportunity to become more diverse and agile, unleashing innovation in new markets, rather than firefighting the slow decline they are going through today.

Lesson 3 – Align Systems and Processes

In the third case, the crisis itself was not so serious, but the reaction to the crisis was draconian. People were shocked, stressed, and bewildered by what had happened. Fear and confusion had led people to avoid taking any initiative and doing nothing until told otherwise. We were trusted with access to various people in the company to find out how they felt, where the dots weren’t connecting, and where gaps existed between systems and apparent processes. This led us to design a leadership program focused on building psychological safety and trust. We provided people with a forum that encouraged recognition and openness about the impacts of behaviours. We quickly refocused people, provided a safe space for self-reflection, and enabled them to develop a more collaborative environment among leadership and more junior colleagues.

The vision for the crisis response was simply the absence of another problem, so the opportunity for improvement was missed. Significantly, neither the HR nor IT departments engaged with the project. This meant that HR and IT systems and processes never aligned to support what were seen as the ‘soft’ issues—psychological safety and trust. HR still applied harsh sanctions for not complying with Standard Operating Procedures (SOPs). IT enforced data protection rules that actively inhibited daily business operations. Both SOPs and data protection are business-critical issues. To work effectively, they need to be delivered and enabled by people who appreciate their significance and incorporate them seamlessly into their working lives. However, where people perceive coercion and control, they will actively find ways to work around processes and each other, making life doubly hard and far less effective. Actively connecting these dots may seem cumbersome and time-consuming, but compared to the difficulties you may be storing up, it is well worth the attention.

Conclusions:

1. Once you are in a crisis, don’t waste it. Use it as a catalyst for creating a positive future.

2. Get aligned. Ensure that, at a minimum, the Exec team, HR team, and IT team are fully engaged and aligned, able to role model the target culture.

3. Don’t waste time blaming individuals or external factors. Blame gives away the power to learn and improve.

Finally, ask difficult questions and understand difficult truths: poor sales, significant staff churn, leadership and systems failures could all preface a crisis. Naming a crisis liberates everyone to act and provides the opportunity to engage all stakeholders in responding.

Holos helps leaders make change easy. How can we help you? Reach out to us at hello@holoschange.com and let’s have a conversation.