[The crew of the Apollo 13 mission step aboard the U.S.S. Iwo Jima, prime recovery ship for the mission, following splashdown and recovery operations in the South Pacific. Exiting the helicopter, which made the pick-up some four miles from the Iwo Jima are (from left) astronauts Fred W. Haise, Jr., lunar module pilot; James A. Lovell Jr., commander; and John L. Swigert Jr., command module pilot. The Apollo 13 spacecraft splashed down on April 17, 1970. Photo from NASA on The Commons Flickr]
The impact of Covid-19 on individuals and institutions is unparalleled in a hundred years. It has unmistakably plunged both individuals and institutions into a crisis, posing an unprecedented leadership challenge across the board. For some institutions, the crisis appears to be existential; for many others it is an operational nightmare; and for some it is a disruption, if not derailment, of their strategic vision.
For the CEO of a logistics firm that is in the business of pallet pooling, it was a body blow. (Pallets are used to stack, protect and transport materials. The firm serves a variety of industries—auto components, FMCG, consumer durables, beverages, and home delivery tamper-proof kits for ecommerce firms.)
Revenues froze when production stopped and the bottom fell out for its customers’ businesses. He runs the risk of losing the capital he has invested in pallets and kits that are stuck at various points in the supply chain—they are not retrieved, stored and accounted for. Also, there was inventory stuck in warehouses when trucks did not move. His revenue model is based on rent for the number of days the pallets are in use.
His dilemma: should he charge customers rent for the pallets when they were stuck? Or should he discount it, defer it or waive it? Meanwhile, expenses are piling up: rent for the offices and warehouses, payments to staff and vendors, and interest on borrowings—bankers may defer but not waive it. And what happens to the idling capital he has raised for his ambitious growth plan? What happens to the capital invested in the under-utilised capacity? Will the PE companies empathise? What happens to his ambitious investment into AI-based analytics and automated asset tracking, which is under implementation? This was intended to be a game changer in the industry in India and shore up his margins by bringing in operational efficiency.
The arrows seem to be coming from every direction.
From my engagements with business leaders, stories of such turbulence echo across startups and mature businesses. I started a knowledge business in 2016 and find myself being blown away. I am sure, that like me, you too are searching for some insights, to guide you to your unique way of engaging with the turbulence, without being consumed by negativity.
I’ve found a beacon in the stories of four real life crises. Each has a different dimension in terms of the time that was available to the leaders, the magnitude of impact, and the levers which were available to the leaders. If the leaders in these life-and-death situations could manage it with aplomb, we in business surely can find insights from their experience.
- Sully Sullenberger, the captain of Flight 1549 with 155 passengers on board, had minutes to prevent a crisis—engine failure from bird-strike—from becoming a disaster. He crash-landed the plane in the Hudson River.
- The crew of Apollo 13 and their leaders, Capt. James Lovell on board the spacecraft and Gene Kranz at Nasa’s Mission Control in Houston, had days to avert a disaster, as oxygen tanks failed.
- Ernest Shackleton, the polar explorer with 27 crew members, had days expanding into months and then into years, while he fought to defy the disaster of all of them dying in desolate Antarctic, day by day, month by month, quarter by quarter and eventually year by year, until his reformulated objective of saving all was achieved after full three years.
- The stellar learnings from US President Franklin D. Roosevelt, who led America and the world out of the Great Depression of the 1930s.
I will also bring you a peek into others in business, who have engaged with turbulence and crisis—some successfully and others not.
A caveat: I am not attempting a case analysis, with a magic playbook and the seven steps to heaven. I only propose a loose hypothetical framework distilled from these stories of leading in a crisis.
Let me list down the key insights I’ve taken. I will examine them in detail.
- Signal control through emotional equanimity and reframing focus on the core vision
- Agility, not speed
- Compress the innovation scale and cycle time
- Resolute optimism, not romantic optimism
- Clear and empathetic messaging
- Stay in the present and nurture to manage anxiety
- Credibility—take full responsibility and be accountable
Signal control through emotional equanimity and reframing focus on what matters
Crisis leadership requires emotional equanimity. It requires an ability to engage your thinking to size up the situation—the trigger, the aggravators, the dampeners, the resources required to first contain and then extinguish it, deft organization of resources, clarity on who attends to what, what alliances or support are needed, and above all, prompt decision making.
Crisis creates strong turbulence in the environment. It alters the equilibrium, abruptly and dangerously. Like a ship caught in a raging storm and churning ocean. The captain needs to shift focus to the immediate—steer to calmer waters, re-establish equilibrium, and alter course. He cannot get caught up with the end-term objective, the destination port.
Watch the film Sully and Shackleton's Antarctic Adventure. In both cases, the leader took charge, reframed the objective and reset the course. When engines failed, Sullenberger took charge of the aircraft from his co-pilot. He remained calm. He used the information at his command, brought to bear his years of experience, and made a well-thought-through decision to abort going to LaGuardia or Teterboro airports, and land the plane in the Hudson. And he had mere minutes to take these calls.
Watch a trailer of Sully:
And here’s a trailer of Shackleton's Antarctic Adventure
Calm and a clear, unwavering mind is the pivotal factor to signal control to the team and those who will be impacted.
It also allows one to establish focus, compressing time and space to the core and the immediate. It allowed Shackleton to recognize that with his ship crushed by compressing ice, his vision of being the first man to walk across the Antarctic to the South Pole was no longer possible. He reframed the mission objective to saving all lives.
The glory of the mission can wait. Survival and return to fitness come first. And the time available to act is not the usual five years. It is the next 90 days, and as the situation changes, the next 180 days, maybe even the next 12 months.
This is like nursing an athlete back on track after a serious hamstring tear. She cannot rush to the gold medal. Because the medal is contingent on her fitness.
During the 2008 financial crisis, Dick Fuld, the CEO of Lehman Brothers, did not understand that saving the bank, and not the valuation of the bank, needed to be the core vision. He lost both. However, CITI Bank survived. It was prepared to shrink to survive and then bounce back later, to grow again. Nokia and Kodak failed because they were not prepared to reframe when the technological environment was disrupted. Also look at the many global institutions which rode through the six years of World War II, and within five years bounced back to greater strength. Who would have thought that German and French industry could survive the utter devastation of their economy, infrastructure, skilled technical talent, leadership and markets?
Agility, not speed
Crisis demands agility. Many of us confuse speed with agility. We often use the term “speed of response”. Speed makes you rush; it is thoughtless, undirected effort driven by panic or excitement. Where information sensing, processing and decision making is short-circuited. And it tires you out soon.
Agility is responsiveness driven by intellect, not impulse. It means continuously sensing and picking mission-critical information, assessing and anticipating, and lining up alternatives. It means adapting to the emerging twists and turns, learning and correcting course, and acting decisively.
Agility drives you to cut the clutter and zoom in on the core. It allows you to concentrate resources and efforts, make a few but productive moves, mobilise support, and put in place flexible structures which morph according to the emerging demands of the crisis. All this without being trapped into a set piece playbook.
That is what Sullenberger did on January 15, 2009, to save the 155 passengers and his entire crew. He had minutes, but did not rush. He constantly adapted his actions to the mission-critical information coming through bit by bit.
Roosevelt adopted the same approach during the Great Depression. He directed his task force to meticulously work out the plans without feeling rushed by public pressure or the media review. Much before the Japanese, he emphasized that agility comes from the quality of information processing, as the information is unravelling, and having fluid, adaptable plans.
Agility demands Arjuna Vision—focus on the mission critical objective, shutting out all that is peripheral. I see the fish, my target, its movement pattern reflected in the water and nothing else. This is what air warriors call situational awareness in a dog fight. This is what Formula 1 aces do on the race track. Absorb all the information that is fed to them by the Pit crew, sense what their situational awareness is feeding their mind, synthesize these two and act decisively to manoeuver the car.
One modern-day example of how speed kills is the Boeing 737 Max fiasco. Boeing, left behind by Airbus on fuel efficient planes, rushed with its 737 Max engines with new software. It let a crisis spiral into a disaster by continuing with its quick fixes on the 737 Max.
GE, the aviation major in the mid-1990s, launched its GE90 engines. It soon found itself in a crisis. Major airlines thought that it was too risky to fly wide-bodied aircraft like the Boeing 777, with just two engines, for the Pacific long haul. It was also seen to be way too expensive. Jim McNerney took over the leadership and by 1998 remade GE90 with painstaking design work on the thrust with fuel efficiency, won back Boeing and Airbus, to make GE90 “The World’s most powerful, fuel efficient and safest engine”. He had to ward off a pessimistic Jack Welch. He endured media obituaries, including by Welch: “GE90 is dead, put a stake in its heart.” He worked hard for three years to convince the airline majors that GE90 was the safest engine on earth. He turned an existential crisis into a fairy tale success. Competitors Pratt & Whitney and Rolls Royce were left ruing their missed opportunity.
For agile minds even a crisis is an opportunity, with the maxim: “Never waste a crisis; catch the adversary off-guard.”
Compress the innovation scale and cycle time
Crisis demands that you improvise and innovate, but not on a grand, world-changing scale. There is no time for such grand sweeping innovations.
In April 1970, when the Apollo 13 crew found themselves with 100 ampere of power (good enough to run a hair drier for three hours), one of the two oxygen tanks blown, reducing life support and power generation capacity to a fraction of the design requirement—and 300,000 km away from the Earth, 200,000 km to the moon and 500,000 km more to come back—the mission control innovated by the hour. The mission control under the leadership of Kranz innovated to optimize power, to transfer power from the Command Service Module to the Lunar Module, to rejig and fit a round pipe into a square hole to permit the lithium hydroxide cells to absorb carbon dioxide, and more innovations. All with no playbook. The crew led by Capt. Lovell innovated navigation by using the Earth and their spacecraft’s window.
Time is of the essence, specificity of the problem solved is the value, and ease of application is the secret sauce for innovation in a crisis.
The GE90 comeback is again a case in point. But timeframe compression is one thing for a jet engine crisis and another for the fashion industry. I was speaking to Sanjeev Mohanty, the managing director of South Asia and MENA for Levi Jeans. He told me that he was leading a short cycle innovation to repurpose the raw material inventory amidst the Covid-19 crisis. For Jack Welch, scale and cycle time compression is one thing, and for Mohanty it is another. As different as it was for Shackleton and Sullenberger.
For us at Leadership Centre the challenge has been to innovate delivering high-quality leadership development programmes through a virtual classroom, without sacrificing anything that we would do in a physical classroom for our learners. In flat two weeks we developed the prototype and within four weeks we live-tested with a customer organization. Here we are ahead of many with our pedagogy, fit for virtual classroom, which does not sacrifice group exercises or any group interactive learning, which we would have done in the physical classroom.
Resolute optimism, not romantic optimism
Optimism is the magic that makes leaders build positivity and self-belief in their teams. This is what lifts the leader first and then the team members out of despair, self-doubt and negativity. However, leaders who have successfully manoeuvred through crisis, know that this optimism has to be a resolute optimism, which accepts that the way up will be tortuous. That there will be reverses, it will demand sacrifices, and punish mind and body. That’s far from an all-will-be-well type of romantic optimism.
The way out of crisis will demand resilience, pain tolerance, perseverance and resolve. When you are going through it, it is unlikely to be exciting or exhilarating as romanticists will have you believe. It wears you down, it tests your mental resolve, it cries to you to stop and give up.
Sullenberger, Shackleton, FDR, McNerney, Churchill, Sourav Ganguly (after the match fixing crisis) and many more have exemplified the value of resolute optimism.
Clear and empathetic messaging
Sullenberger and Shackleton found a way to use imaginative messaging, uplifting experiences and a quiet undemonstrative passion stemming from duty consciousness to banish these mental demons for themselves and their teams.
Every crisis places a premium on the nature, tonality, frequency, content and character of the messaging by the leader to the team.
Messaging is not speech making. It is the empathy which Roosevelt brought to American citizens in the midst of the Great Depression. He conversed every evening at 7 pm with ten families live on the radio—for 1,000 days. Every citizen felt they were talking to their President every day, that he was listening to them about their fears. They were reassured and infused with a daily dose of hope. This is what Sullenberger did even when he had only a few minutes to land the plane in the Hudson River. He kept talking to his co-pilot, keeping his mind on the task and not letting him feel the fear. Shackleton did the same with his team for over 1,000 days in the dreary depths of the Antarctic, with little hope of anyone coming to rescue them.
Bombastic speech making is romantic and self-serving. It does not reassure, rekindle hope, or build resolve. Empathy, sensing, sensitivity and articulation are the key to messaging which reassures and builds resolve.
In this pandemic, it will be the FDR type of business leader, who is listening to, conversing with, reassuring and nudging with care the last person in the field, who will rally her troops. The speech making, target slave-driving, type of business leader (who says get me more business somehow, I don’t care if you get infected) will appear to win in the short term, but will lose his best and the brightest in the months to come. The Covid-19 crisis and the recovery is like the Great Depression; it will not be over in a quarter. Empathy and nurturing will build resilience and resolve, while machismo and running after numbers will destroy long-term value.
If your employees feel cared for, they have clarity on what you are doing to enable them, what your ask is from them and see you in the frontlines—and not lecturing from the safety of your corner room—they will respond miraculously, like the team at the Nasa Mission Control. Listen to the BBC podcast 13 Minutes to the Moon. Leaders go to the sound of the gunfire. They do not hunker down in their bunkers and sound the bugle for those facing the bullets.
Stay in the present and nurture to manage anxiety
The focus is on directing the mind, emotion and action of everyone to the next moment and not let it drift too far. For the team members, when the mind strays in a crisis, ambiguity, uncertainty and complexity engulfs it. That is when anxiety propelled by the unknown and the fear of the uncontrollable takes charge. This is like high altitude trekking. The peak is the destination, but the next step, the next gulp of oxygen, the next dose of hydration and nutrition is the mission.
Leaders who have successfully warded off crisis, attended to the cramping legs, burning lungs and wavering resolve of their team members. They nurtured more during this phase than task them and dangle incentives.
Sullenberger did this with his co-pilot Jeffrey Bruce. When Bruce was later asked whether he felt anxious and nervous during the crisis, he said there was no mindspace for it because Sullenberger kept him at the job of helping. Kranz did the same with his mission control crew and the three men on the spacecraft. Capt. Lovell recalled to me, when I interviewed him that they were kept engaged solving problems. In 13 Minutes to the Moon John Aaron, the controller for EECOM (Electrical, Environmental, Communication system) for the Apollo 13 mission, mirrored the same about how Kranz kept everyone to the here and now of solving problems.
I saw this first-hand with Dilip Oommen, vice president and CEO of Arcelor Mittal Nippon Steel, during the confusing 18-months of ownership change from Essar Steel. He kept his team on the job of hitting new records on steel making and capacity utilization month after month.
Take full responsibility and be accountable
The Apollo 13 crisis started when Capt. Lovell said the historic words, “Houston we’ve had a problem.” When Kranz assembled a crack team in a room at the mission control and calmly said the famous line, “Generate as many options as possible, but failure is not an option, because it is a matter of three souls,” he taught us a lesson on exercising leadership in a crisis. As they say, the rest is history.
Similarly, when Shackleton uttered the words “Abandon ship,” the crisis was full blown. Years later when he counted the men on the shore and said to his ship’s captain Frank Worsley, who also captained the rescue ship, “They all are there. They all are safe,” he taught us another lesson in leadership in a crisis.
It was the same with Sullenberger in 2009. The crisis was full-blown when his co-pilot called out “Birds,” followed by the realization and communication to the tower, “Power lost on both engines.” Hours later, on a pier on the banks of the Hudson, Sullenberger asked his Pilot Union representative, “Have all the passengers been accounted for?” He was told a few hours later in his hotel room, “All on the flight manifest have been accounted for and all are safe.”
At ICICI Bank, KV Kamath retired six months after we contained the 2008 run on the bank. But we were not out of the woods yet. In mid-April 2009, Kamath called me and told me, “Ram, I take full responsibility and accountability for the crisis. Tell the board that I will not take any pay rise or even a single stock option. I leave it to you, the senior leadership, on what you want to do.” We all followed suit and did not take a pay rise, bonus or stock option that year. Kamath was of the firm view that when the shareholders had seen an erosion in value, we, their custodians, should not seek to harvest value. Remember, we all had many more years to go and make up for it, but for Kamath it was his last year. He put the shareholders ahead of himself. That is taking full responsibility and accountability in a crisis.
It is not over until order is restored and equilibrium attained. That is the central theme of leadership in a crisis.
The reward is when the crisis is tamed, when calmer seas, smoother flight and equilibrium has been restored. That feeling of exhilaration is the romance. This romance materializes in the stories that leaders, who have managed crisis successfully, tell us years later.