Tag Archives: crisis management

The Single Most Important Job of Any CEO

Being the leader of a business isn’t always glamourous. More often than not, your time is going to be spent figuring out where your company went wrong.

In the book Great CEOs Are Lazy (Inc. Original Imprint, 2016), leadership consultant Jim Schleckser argues that the best CEOs aren’t the ones who spend 100 hours every week at the office–instead, they are the ones who know how to effectively spend their time. In the following edited excerpt, Schleckser, the CEO of the Inc. CEO Project, a coaching and peer advisory organization, explains why that many executives struggle to find time to address organizational problems.contact us today

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Warren Buffet’s Secrets to Stop Worrying

Warren Buffett, who has billions of reasons to be worried, uses these six steps to free himself from worry and you can too.

We all know Warren Buffett is one of the most successful investors of all time. He has literally made billions of dollars through the savvy investments he’s made over the years through his firm Berkshire Hathaway. But with all that money at risk, it makes you wonder how Mr. Buffett could ever get any sleep: most of us would be worried sick.

Think about it. Mr. Buffett, for instance, has placed massive bets on the railroad industry. But what happens if a trail carrying some toxic waste derails? What will happen to his railroad stock? Similarly, what would happen to the significant investments he’s made in banks and financial services companies if another recession were to strike? It’s enough to drive you bonkers.

And yet, Mr. Buffett is as cool as a cucumber. Despite all that money on the line, he simply isn’t consumed about worrying about it. But why?

The answer is that he’s adopted the secrets of Dale Carnegie’s sometimes-overlooked gem of a book called “How to Stop Worrying and Start Living“. While Mr. Carnegie is probably better known for his other books about public speaking and gaining influence, Mr. Buffett has learned to adopt several of Mr. Carnegie’s tips for living a worry-free life.

  1. Isolate the Problem – The first key in preventing worries from overtaking your life is to create “day-tight” departments around the different areas in your life. Just like you can seal off a damaged or leaky section in a ship to prevent it from sinking, you need to isolate the different parts of your life–your business, your relationships, or your finances–so that they don’t spill into each other. Even if you’ve had a hard day at work, for example, you need to find a way to be the best dad you can be once you get home.
  2. Understand the Problem  – If something has gone awry with some aspect in your life, don’t overreact to it before you get all the facts. It’s easy to fear the unknown, so make time to understand what’s caused the issue. The better you understand something, the less you’ll worry about it.
  3. Prepare to Accept the Worst – After you know what kind of issue you’re facing, figure out what the worst possible outcome could be resulting from it. Then make peace with it. If you can accept the worst-case scenario, then you’ve simply eliminated any reason to continue worrying about it.
  4. Make a Decision – Once you’ve accepted what the worst possible outcome of a situation could be, then you can actually start thinking about how you actually might create a better outcome. Weigh the facts you have available and make a decision about how you might do that. And rather than get stuck in some kind of worry-vortex, where you become paralyzed because you feel like you don’t have enough information, make a decision once you feel like you’ve got 75% of what you need.
  5. Act – There’s an old saw that involves five frogs sitting on a log. One frog decides to jump off. So how many frogs are left on the log? The answer is five–because deciding and acting are very different things. After you’ve made a decision on what you could do to potentially improve the situation, act on it because taking action will immediately reduce your level of worry.
  6. Let It Go – After you’ve done everything you can to deal with a worst-case scenario, then it’s time to simply accept what’s happened. There’s no use worrying about it once you can’t do anything about it. Make peace with the issue and move on to the next one.

If Warren Buffett, who has billions of reasons to be worried, can use these six steps to free himself from worry, you can too.

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Never Waste A Good Crisis

The best leaders never waste a good crisis because it affords them the chance to make the kind of large wholesale changes their organization needs. They let the fire do some of the work for them to make the organization receptive to change.

In your journey as a CEO or entrepreneur, you will inevitably face a significant crisis at some point. Maybe it will be the loss of a key employee. Or perhaps it will involve getting in trouble with your bank or the failure of a new product launch. The point is that something will go wrong in a way that you never planned for.

In the wake of such a crisis, it’s the natural tendency of CEOs and entrepreneurs to step in and fix the problem. We want to put the fire out. Maybe that’s jumping in to find a replacement for the person who left or even worse, take charge of your R&D team. While those moves might help stop the bleeding, they aren’t likely to push your company forward over the long run.

That’s why I want to change your thinking on this topic. I believe that the best leaders never waste a good crisis because it affords you the chance to make the kind of large wholesale changes you organization needs that you’ve also been putting off for too long. To put that another way, sometimes the best move is to let the fire do its work so that you can rebuild something stronger from the ashes.

Let’s return to the example of losing a top employee; let’s say your best salesperson. While it might seem like the obvious solution is to rehire for that position, the smart CEO asks some questions instead: Is there a better way to go about this? Maybe you should hire two new junior people instead? Maybe the clients that ex-salesperson worked with warrant your VP of Sales stepping in to take over? Or, just maybe, you’re better off losing that client anyway.

Another scenario might be that, due to a massive market disruption, you need to make dramatic changes in your headcount. Now, nobody likes laying people off–which is why most organization lay off the smallest number of people they can. But what if the smarter decision is to cut deeper by getting rid of all of your C players, and then hiring back fewer, but far more productive A and B players instead? In this case, you would have used a crisis to upgrade the overall talent level in your organization.

The point is that when you encounter a crisis, it primes your organization to go through major changes it might not otherwise be capable of making.

Think about your organization like an oilrig in the middle of the ocean. If you were to order your employees to jump off into the cold salty water, miles from shore on any given day, they’d look at you like you were crazy. But if you explain that you’re in the middle of a real crisis–like if the oil rig is on fire–you’re sure to get far different results.

There’s an element of psychology at work here in that when we encounter crisis in our lives, we’re also programmed to deal with change in a way that, in more normal times when everything seems fine, we tend to reject.

That’s also why it’s critical for you, as a leader, not to minimize the extent of the crisis–which is another natural thing for us to do. If the company loses it’s biggest customer, for instance, you might be tempted to prop up the troops by saying something like, “It’s not a big deal, we’ll find another customer to take their place.” But that would be wasting an opportunity.

What you could do instead is be quite direct about the consequences of the crisis. As a result, the organization should expect several major changes to come about. That’s how you can turn a negative situation into a positive one because you can prime the organization to do things it might not otherwise have been capable of undergoing. And this type of transparent leadership will serve you well through tough times.

A crisis allows you to bring about change at a much faster rate than you would normally be able to bring about–which is why you should never waste them. So next time you get some bad news, resist the urge to go and fight fires. Take a step back instead to see if there might be a silver lining in the form of a big organizational change you probably needed to do to avoid the crisis in the first place.