The recent collapse of Silicon Valley Bank palpably signaled for a lot of leaders that crisis and uncertainty are on the rise in business once again. Tens of thousands of people spent the weekend of SVB’s meltdown in a state of intense anxiety about the fate of their money and their businesses.
While that banking crisis has calmed, economic and business uncertainty remains a reality. What do the most effective leaders do when crisis spikes unexpectedly? We spoke with Carol Kauffman, co-author with David Noble of the recent book Real-Time Leadership. Kauffman, a leadership coach who advised executive clients during the SVB collapse, is an assistant professor at Harvard Medical School and a senior leadership advisor at Egon Zehnder. Here is a transcript of our conversation, edited for clarity:
Can you explain your framework for real-time leadership?
The quote that really comes to my mind about real-time leadership is the Victor Frankl one that between every stimulus and response, there's a space. And in that space lies our freedom. That means basically when something horrific happens, we all have our natural reflexes. Some will dive in and be furious, others will run away and try to analyze it. Other people will feel, who do I need to take care of? Other people will completely tune out. So those are some of the different options, but how do you make some kind of space for yourself so you can rise above your reflex depending on what's really being demanded of you at that time?
In the thick of a crisis, what do the people who are most successful in those moments do differently?
I talked to one CEO who says, 'In situations like this, I lower my pulse.' So first of all, what can you do to deactivate your normal survival physiological responses? Because getting something like this is a complete visceral experience, and hell. It’s like, 'Am I now going to lose my company….etc., etc.?’ So how do you manage your own physiology and make space for reaction?
There's research showing that literally just taking seconds or moments to name your experience can be very helpful. One of the ways we think of to make space is to really try to access your actual core wisest self. We talk about five aspects of that which are calm, clear, curious, compassionate, and courageous. Think through when you are faced with something like this, where do you get the most disrupted? And then how can you try to help yourself? So for example, for me, calm is the big one. If I'm calm, the other things can be in place. Or if I'm not calm, they're not there. For my business partner David, if things are clear, he can do the other things. But for us to know these are the five qualities that are most likely to be able to center ourselves, and there's ways to develop them and be aware of them.
So the first step is you can make space between that stimulus and the response by downshifting your physiological reaction and managing your cognitive reaction.
What are the steps beyond that?
First, it's how do I make space? And then there's what do I do? So for the 'what do I do?' part, there's what's called being mindfully alert. This is mindfulness and to not prejudge, try to just see what is actually happening and what my goals are. We talk about the three dimensions of leadership: What do I need to do? Who do I need to be? How do I need to relate? So the first one is, how can you get clear on what do you actually need to do right now? And it may not be the first thing that comes to your head. At least pause and say, is this really what I need to accomplish right now? Or is there really something else? Second one, okay, right now I am kind of blown away, but who do I want to be right now? Are there ways that I can tap into my character strengths, my sense of purpose, my role models, just anything to help me stay centered at this moment and have some choice over who I am? I just talked to a CEO who recently had something thrown at him and it created what we call that 'earthquake' feeling. So when you have that earthquake feeling, stabilize yourself. One way is through those five Cs. Another way is what do I really need to accomplish right now? Who do I need to be? And then how do I need to relate? Which includes, who do I need to get help from? How can I really be connecting with people so I'm not feeling isolated and abandoned or just betrayed and furious? How can I be relating to people A) to get support, B) perhaps to find out the information that I need in order to navigate this storm?
With a crisis there's a lot of information coming at you and it's hard to know where to focus and how to identify what's important. Do you have any techniques for doing that?
First, we should just acknowledge it is really hard to see through a sandstorm. And to really appreciate, if I think of what kind of storm the SVB crisis was, it was a sandstorm. I mean it hurt, it obliterated everything. And how do you move forward regardless? One question is, well how do I not distort what's going on? What's going on is bad enough. How do I make sure that business information is coming at me, that I'm not wearing rose-colored glasses? I talked to one person in the middle of that—and she was using Silicon Valley to bank to pay all of the employees in its very large organization—and she's like, oh, people are just making big fuss about this. It's not going to really be a problem. So she had on rose-colored glasses. Maybe it turned out to be correct. But question is, are you going to have rose-colored glasses, believing it is not going to be a problem, I can just chill? Are you going to have charcoal glasses on and just see doom everywhere?
The other one is being nearsighted or farsighted. Do I need to take a close-up look at this? Or a more strategic view. Another question is in terms of your attention budget, how much attention can I pay to what? So when you're looking at this whole situation, where do you need to have a very clear, relentless focus and where is it okay and safe to be impressionistic and grainy? And often what we need for this is to also be talking to other people so we can have some kind of sense, this is what I'm seeing, this is what you are seeing. And then being open to the input of others.
In a moment of crisis, how do you find the balance between holing up and focusing on the problem and exhibiting practicing external leadership?
The whole idea of the options generator comes in, which is know your default. If your default is to lean in and overcommunicate under this kind of stress, go, 'Whoa, is that the right thing to do?' If your default is to withdraw and think and avoid conflict, you'd better really check yourself out. Because if you're going to make a mistake, know what mistake you're most likely to make and try to balance it. All the people who were under-communicating should really think about what made them decide under-communicating was the right goal for them. What were they trying to accomplish through under communicating? Because you can go into the reflex, 'I just better not say anything, I don't want to get everyone upset.' It's like, 'Wait, what am I actually trying to accomplish? And is this the way to do it?' That's a combination of the mindfully alert and the options generator. Under stress, we become exaggerated versions of ourselves. What we saw is this felt very traumatic to people. So people who are action-oriented became super action-oriented. Those who are like data-data-data-data became even more like that.
On the management side, what are the ways to the best ways to handle layoffs, to process them, to evaluate the options, some of which might be alternatives to layoffs? And then on the employee side, if you're hit with a professional crisis in the form of a layoff, what's the best practice?
In terms of how you actually handle and navigate in a business way, how to manage a layoff, I'm pretty clueless. That said, it was interesting that I was talking to a CEO last week and we were debriefing about things and he just sort of said, 'For the people I work with, it's just fine for them to lay off hundreds of people. It makes sense, it's data, it's objects, they just think it through and this is what needs to happen and it doesn't bother them. And for me, I anguish over each layoff, each person I think about their families, I think about what this will mean to them.' And so this isn't about the decision to layoff because I'm clueless about that, but it is again, know what your tendency is and in the process, try to balance it. So if your tendency is to just, these are just pieces on a chess board, you're moving around, then you'd say, wait a minute, let have a little compassion here, particularly with how I convey this information, to make the people real and build up your compassion. For the one who's like, 'Oh my God, I can't stand this. I have to do it.' For that one. You could go to another C, which is get to clarity now. Get to clarity and get to courage because those are the resources you need right now.
On the other side of it, first of all, it's really hard to be laid off because all these fears come up and you connect your dots with your wishes or your fears. And there you are thinking it's going to be the last job your life. It's kind of like I remember met this woman once, now she was not gorgeous or anything, but she had just broken up with somebody and she goes, 'I am between relationships right now.' And I'm like, whenever I've broken up a relationship, I feel I'm going to be alone for the rest of my life. There's no, 'between relationships.' So in this situation, it's the same thing. If you're feeling like this is it, I'm never going to work again, really pause for a moment and check out your vantage point here. This is clearly an emotion-driven experience. What is the actual data? How can I remember when have I successfully navigated something like this in the past? Who do I want to be right now when I'm hearing this news? There's different resources available, but a big one would be: I've handled crises before. It's really hard. I remember working with somebody once who was a real golden child and hadn't never actually had anything really hard happen. So when I say something, you've done this before, he is like, 'Well, I never had to.' The hardest of all is the first time you've been thrown to the ground. And the other one is to make sure you get the interpersonal support that you need.
Outside of moments of crisis, how do you train and equip yourself for crisis moments down the line to better handle them?
It's all about the reps. You have to have a commitment to your own growth that you use consistently, reliably, if not relentlessly for your own development under normal situations, under small situations. And then like weight training sort of heavier and heavier and heavier. Because if you haven't invested in these things, there's nothing to draw on when you need them. Just like in the bank, If you haven't invested, it's not there. So for this one, have you spent time really taking the moment to think, what do I really need to accomplish? The three dimensions of leadership, have I practiced leaning in or leaning back? Have I practiced these under more normal or less stressful situations? Have I really noticed when I'm under stress? What kind of mistake am I going to make? Am I going to be ladi da or I'm going to be like, 'oh my God.' And also with engaging in affecting change, what kind of signals do I need to send? How can I get practice sending the signals and then figuring out whether what I've said is what was heard, given that often they don't line up. If you want to be a great leader, you've got to practice. Just if you want to be a great figure skater, you don't suddenly win the Olympics.
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