Les McKeown's Predictable Success Blog

September 18, 2020

Why organizations stumble in a crisis 

Listen to Les McKeown read this blog post:

A note on context:

I'm re-upping a series of blog posts I originally wrote in 2012 as we began to emerge from what we now refer to as the Great Recession. Although our 2020 experience is considerably different in scope and scale, I believe these principles still apply - even more strongly in some cases.

To avoid anachronism, I have left in the case studies and examples that I used and were current when the post was first written. 

Last time, we looked at the three steps required to recover from any crisis
1. Clarity.
2. Direction.
3. Control.
This seems pretty straightforward, yes? So why do so many leaders, not to say entire executive teams stumble so badly when faced with a crisis?
Why is it apparently so hard to pull out of a skidregain direction and control and move on?
The reason – and the reason News International, Penn State, Olympus, RIM and Kodak all, to one degree or another, foundered in a crisis – is because of the different skills required for each recovery step:
Achieving clarity in the midst of a crisis is a Visionary trait.
From their strategic perch 30,000 feet up, the Visionary is best placed to map out the lay of the land and to see both where the organization is, and what direction it needs to go in, to pull out of the skid.
Setting direction is an Operator skill.
The almost physical act of wresting the organization on to the ‘right side of the road’ and out of danger requires relentless strength, energy, persistence and fearlessness – all classic Operator traits.
Re-establishing control needs a Processor at the helm to set in place the systems and processes that not only ensure the organization pulls out of its existing tailspin, but that it doesn’t hit the same patch of black ice again.
Why did News International stumble for so long before finally achieving clarity and realizing the depth of the phone hacking scandal? Because Rupert and James Murdoch, the two NI executives in charge, are both classic Operators, and they believed the only thing necessary was to grab the steering wheel firmly and drive through the mess (Direction). A Visionary would have seen the problem was much deeper than that (Clarity).
Why did the Olympus scandal drag on and on for so long – and still seems not to have been fully addressed? Because their ex-CEO – a Visionary – saw the problem early on (Clarity), but the board – a bunch of Processors – moved straight to Control without first establishing a new Direction.
Why has RIM stumbled seemingly endlessly for the last three years? Because the senior executives are dyed-in-the-wool Processors (an org chart with co-Chairmen, co-CEO’s and co-COO’s? Only a Processor would put something like that together). As a result, no-one has real Clarity about the depth of the problem they face.
Try running the V-O-P analysis yourself on recent pratfalls by NetflixBank of America and Groupon.

Your action points / takeaway questions:

  • What's your core leadership style
  • Which of the three recovery steps (Clarity, Direction, Control) come most naturally to you?
  • Which do you struggle with? 
  • How can you overcome that weakness?
Next time, we’ll look at how organizations have successfully dealt with crises – but in the meantime, what do you think? How does an organization avoid the V-O-P blind spots that trip it up when it hits a crisis?

Let me know in the comments below!

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  1. It seems if the leader either is balanced between the V-O-P skills, or is dominant in one AND has created a strong executive team with leaders skilled in the missing areas, perhaps the crisis can be recovered from. 
    Very interesting and relevant article, Les. I’ll look forward to the next, to see if the many “but what about a leader who…” questions in my head come into play.

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