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September 4, 2012 - The Management Blog

Systemic Shocks: Does Your Leader Absorb Them – Or Make Them Worse?

It has long been said that when the skies are darkest, the stars come out.

Leadership today allows for no downtime. The 24/7 news cycle is fed by millions of social media “reporters” (everyone) looking to post the blunders of corporate chiefs, customer-service disasters, or other company failures. In this environment, leaders must be at the top of their game at all times. Crises can occur and mistakes can happen at even the best-run companies. Tough times such as these serve as crucibles in revealing a leader’s true nature—and how well he or she can handle the inevitable shocks to the system.

Great leaders have the ability to be effective when there is a great deal of stress in the system. Major tests can include catastrophic events such as airline accidents, exploding oil platforms, or natural disasters such as the tsunami in Japan or Hurricane Katrina on the Gulf Coast—or missteps such as Progressive Insurance (PGR) just experienced through the wrath of social media. These kinds of events create high degrees of stress and uncertainty and can quickly become very emotionally charged for everyone involved.

In our work studying and coaching thousands of leaders, we have seen that some leaders are able to act like shock absorbers. They are able largely to take the hits themselves, protecting their team’s ability to effectively manage through the crises. Other leaders choose to amplify the challenges, almost as if Chicken Little had written their management bible. Amplifying leaders often see their behavior as strategic. Exaggeration can be intended to deflect responsibility or to plant the seeds of an excuse for failure. Or the intent may be to increase the pressure on the troops, thereby motivating them. In reality, this behavior simply handicaps those set out to fight it.

The poster boy for this behavior is former BP (BP) Chief Executive Officer Tony Hayward. His words and deeds after the disaster in the Gulf of Mexico did nothing to absorb shock for his team. Nearly every time he opened his mouth in public, he amplified the public damage being done to BP, further demoralizing employees.

Consider, in contrast to Hayward, an airline executive who experienced a plane crash during his watch. He remained clear in his thinking, absorbed the emotion around him, and did not panic or lose his cool. He stepped back and put a process and plan in place, with key leaders responsible for executing various parts of it. He led from the front. He was empathetic and he took personal responsibility and accountability for the errors that occurred, never trying to hide or blame someone else. He didn’t bemoan that he “wanted his life back.”

Through observing how leaders around the world have responded to crises of all kinds, from corporate missteps to events outside a company’s control, we have identified five things that “shock absorbers” do to lead their companies during tough times. One important observation to take away is that an executive’s absorptive capacity is based both on how they appear and what they do.

1. Be the rock: Behavioral and emotional stability are critical. Followers are looking to the leader all the time; any “tells” that point to crises will be seen and amplified by others.

2. Listen to stories, but focus on facts. Listening is an important display of empathy for the stress that employees are experiencing. Still, while leaders listen they must continually work to bring people back to the facts. Never miss an opportunity to improve the quality of the information at hand.

3. Slow down the game. Take as much time as possible to make decisions. During a difficult time, it takes a deliberate effort to avoid jumping to a conclusion. Even if there is time to correct a bad choice, it’s better not to have made one. Constant course corrections can be seen as poor leadership.

4. Don’t give up the position out front. It’s essential that no one doubt a leader’s willingness to be the first target for those aiming arrows at the company. While out front, leaders can also stand shoulder-to-shoulder in support of the team. They should never let employees doubt their availability and their desire to offer support.

5. Effective communication is critical. The volume needs to be high, but quantity is not enough. What is shared needs to be supported by the facts of the situation and needs to be delivered in a frank, constructive manner. Amplifiers generally communicate the most, but the content of the message can become a problem when good data is obscured by emotion.

The way a leader either absorbs or amplifies the threats that result from these situations will play an enormous role in how employees handle a crisis. Keeping these five recommendations in mind will help a leader assist their team members in doing what they were brought together to do: find the right way forward.

Miles is the Founder and Chief Executive Officer of The Miles Group. Previously, he was a Vice Chairman at Heidrick & Struggles and ran Leadership Advisory Services. Bennett is a professor at J. Mack Robinson College of Business, Georgia State University. He is co-author (with Stephen Miles) of two books, Riding Shotgun: The Role of the COO and Your Career Game: How Game Theory Can Help You Achieve Your Professional Goals.