Jim Citrin Leadership by Example

The current environment presents us with new challenges and opportunities at an ever accelerating pace. While we are constantly in search of stability and predictability with which to base decisions, it has become evident that very rare events, such as the rise of Google, the collapse of Bear Stearns, and 9/11, just to name a few, occur without warning and obviate all of our assumptions and prior forecasts. This underscores the fact that one of the toughest management challenges is dealing with uncertainty.

So just how do you lead people, manage your investments, and handle yourself when you can't fall back on past experiences to deal with a situation that no one has seen before? Nobel laureates have wrestled with these seemingly unanswerable questions and have sought to model unpredictable occurrences, which have more popularly been termed "long-tail" events, or "Black Swans."

To look at these issues in a practical manner, I spoke with Robert L. Dilenschneider, a renowned strategy and communications advisor who formed The Dilenschneider Group in 1991, after having served as CEO of public relations firm Hill and Knowlton. Mr. Dilenschneider has advised major corporations on crisis communications and related issues ranging from mergers and acquisitions and to marketing, government affairs and international media. He has authored twelve books, including the best-selling Power and Influence.

Based on his work over the years and on recent conversations with the renowned financial markets guru and Nobel Prize winner, Myron Scholes, Mr. Dilenschneider has developed four simple rules for managing and leading in times of crisis:

1. Project a Sense of Calm

Just as panic is contagious, so too is a sense of calm, which when it kicks in can settle the frayed nerves of those around you. In a crisis, you should project a sense of continuity, of having managed through similarly difficult predicaments, and of applying the lessons learned in a calm and reasoned manner to the situation at hand.

Responding to such pressure in a cool, calm and collected way requires being guided by your mind rather than your emotions. There are different areas of the brain which govern us when we are thinking clearly and calmly on the one hand and when we are operating in a state of anxiety or fear on the other hand. When it comes to working in a crisis, we perform at our best when we are guided by the prefrontal cortex, the area of the brain that plans and reasons.

When we are scared or anxious, however, we are driven by the part of the brain that produces the fight-or-flight emotions. By simply deciding to project a sense of calm, not only will you be quelling the fears of those around you, but you will be consciously triggering the part of your brain that will enable you to problem-solve your way through the situation.

Whether it is the current credit crisis, the dot-com bust of 2000, the Asian debt crisis of 1997, or Black Monday in October 1987, Wall Street and the economy have been through many "sky is falling" crises. After this passes, the economy and markets will still function and survive, often, healthier than before. As Mr. Dilenschneider said, "Remember; this too shall pass!"

2. Take Early and Decisive Action on Personnel

If you are in a management position during a crisis or period of great uncertainty you should also create an immediate feeling of decisiveness and accountability, according to Mr. Dilenschneider. You need to decide early on which employees you need to let go and which you are going to keep. The goal is to reduce the sense of uncertainty as soon as possible and get everyone focused on the tasks at hand. One dilemma is that the very people who let you get into the current difficulty are often times the best-equipped to help you get out of it.

The analysis of what to do with the individuals involved must be objective and fact-based and must weigh the advantages to the organization of their departure in terms of morale, public perception or operations compared to the loss these individuals in terms of their expertise and relationships. If you decide to retain these individuals, you as a manager must make sure to align their incentives with those of the organization. Once you have decided who to keep, in order to calm down still skittish employees you should reassure them that their jobs are secure -- at least until the organization navigates its way out of the crisis.

3. Ensure That the Information You Receive is Accurate

Mr. Dilenschneider has advised scores of clients during many crises and has come to believe that the single most important thing you can do as a manager during a crisis is to ensure that the information flowing to you and your team is comprehensive and accurate. He says that under no circumstances can you delegate the collection of information to subordinates whose interests could diverge from yours or that of the organization. Recognize that they will naturally be focused on their own survival while your concern as a leader is the well-being of your organization. You must play a hands-on role in determining what information you need, how it will be obtained, and how and to whom it will be disseminated.

From a communications perspective, what you say publicly and privately must be consistent. The levels of detail you share may differ, but what you discuss publicly must be both accurate and consistent with what you are saying to your team and more broadly inside the organization. If you violate this rule, the inconsistency will find its way out, into conversations with others and with the media. That then would undermine everything else you are saying and doing and create more, rather than less, panic.

4. Manage Yourself First

Finally, Mr. Dilenschneider stresses that above everything else, the one thing that you must do when disorder replaces order is "seize control of your own head." In times of distress, it is often easy to get swept away in the flow of events. It is imperative that throughout the crisis, you as a manager take care of yourself, get enough rest, and keep stress levels as low as possible. It is well documented that you make poor decisions when you are tired and stressed. Yet many top executives ignore their own health and state of mind in times of trouble. As a manager, your job is to make good decisions. By taking care of yourself you are helping do your job by improving the quality of the decisions you will make.

To take care of yourself properly, follow the same advice that you surely give to others:

* Put limits on your workday. You can't function well in your job if you are fatigued. Cap the number of hours you work and carve out enough time to make sure that you get enough sleep and spend some time every day with your family.

* Practice deep breathing and take a nap. Both can be done in a few minutes and can be vital in maintaining your equilibrium.

* Maintain your exercise routine. When a crisis starts to fill up your schedule, the daily workout is often one of the first things to get pushed aside. Make it the last. Exercise keeps your mind sharp and routine helps you retain a sense of calm.

Keep Mr. Dilenschneider's four rules handy, because major uncertainty does characterizes the economic and political environment both for today and the foreseeable future.