SINK OR SWIM
Facing a crisis could actually be a great opportunity. How is that possible? Well, think about emergency-care providers, for example: They live to respond to crises. Athletes face potential crises every time the game begins. What enables these individuals to succeed? They're prepared for challenges and expect to overcome them. As a leader, you can imbue your staff with similar determination. Here's what you must do to prepare:
* Convey optimism. No one wants false hopes, but everyone is hanging on to your every word. If you truly believe your organization has a bright future, even in light of a current problem, make lemonade out of lemons; you need to give everyone specific reasons why you can and will overcome the situation. Get engaged in sharing your vision of future success and enlisting your team in making it a reality. Start with your key staff, who may have great insights on how to combat the crisis.
* Speak from the heart, not the head. After you've carefully thought about how people will feel and act, make sure you communicate the right way. Don't soften the blow with needless damage control—discuss your plan from the heart, with intensity and conviction.
* Share the truth, even if it's bad news. While it's more fun to talk about new clients than it is to talk about cutting budgets, your team still needs to know about the bad as well as the good. The sooner everyone knows the situation they are facing and the plans to meet the challenge, the quicker they can adjust. Transparency builds trust.
* Publicly praise urgent actions. When someone in your organization behaves with urgency in order to make something happen, thank him or her and make sure everyone knows about it. Small acts of urgency inspire larger ones.
* Partner with your team on strategies. To move things along with urgency, it's tempting to grab your two or three closest advisors, lock yourselves in a room and hammer out some new scheme. But the rest of your organization won't feel invested or engaged. This is the wrong way to demonstrate urgency. Solicit thoughts and expertise from everyone and show them that their input matters as well.
In that earlier column, I mentioned my failure to see sweeping economic and market changes coming—the kind of changes that can wreak havoc on our clients' financial futures. Our firm is taking steps to identify and prepare for future challenges.
We convened a series of meetings for all planning and investment professionals to discuss what I call evolutionary systems—my name for significant outside events and macro-scale trends. The project has several steps:
* Orientation. What issues can we address for our company, clients, markets and economy? What's the scope of our investigation and speculation?
* Exploration. What are the driving forces behind the issues? What are the macro trends? What are the uncertainties and unknowns?
* Synthesis. What level of impact does an issue or trend have on our clients, company, markets and economy? What scenarios develop as a result of these impacts?
* Action. What should we do about the scenario (action plan, communication, etc.)? Who will be involved in our response? Do our responses require a permanent change to the organization or operations, or is it a one-off event? How do we deal with either type of scenario?
* Monitoring. How do we monitor trends? How do we identify indicators and patterns? How do we act on the signals and indications?
Our project team met six times as a group during the past four months. We came up with a list of issues we might face which could have a major impact on the firm, our clients or our industry.
Some of these issues are occurring now, so our response is being developed and put into place as I write. At the other end of the timing spectrum are unpredictable natural and geopolitical disasters. For these, we're developing a disaster response plan. And for everything in between, smaller teams are developing action plans. I'll share our results in a future column.