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The Ultimate Test of Leadership

The economic calamity of 2008–2009 was not caused by subprime mortgages, credit default swaps, or even excessive greed. These are only symptoms of the real problem. The root cause of the problem was failed leadership from leaders who didn’t follow their True North. In my book True North, I defined True North as the internal compass of your beliefs, values, and principles that guide you through life. Like being in a crucible, a crisis tests whether you will hold fast to your beliefs.

Crises have brought down many leaders and their organizations with them, while other leaders have risen to the challenges to prove their mettle.

An old English proverb says, “A smooth sea never made a skilled mariner.” Managing a growing business is a lot easier than leading through difficult times. Growth periods don’t test your intestinal fortitude the way a large-scale problem does, nor do they determine whether you will stay on track in the heat of a battle. Running a stable business requires discipline and managerial skills, but it doesn’t test real leadership capabilities. Crisis situations do test such capabilities.

Here are seven lessons that I have gleaned through my years of leading in business, nonprofits, government, and academia. They are relevant to leaders, from those in the early stages of their careers to recently appointed CEOs, to help them follow their True North when they are facing their defining moment. Practice of these seven has proven to make better leaders after the fact.

Lesson 1: Face reality, starting with you. Until you acknowledge that you are facing a serious problem, including your role in creating it, you cannot move forward to solve it.

Lesson 2: Don’t be Atlas; get the world off your shoulders.  You cannot get through this alone, so don’t try to carry the whole world on your shoulders. Reach out to others inside your organization and in your personal life to share the burden and help you come out a winner.

Lesson 3: Dig deep for the root cause. Under the pressures of a crisis, there is temptation to jump to quick-fix solutions that may mask the real problems and leave your organization vulnerable to repeating the crisis. The only way to solve these problems is to understand their root cause and implement permanent solutions.

Lesson 4: Get ready for the long haul. When you are confronting significant problems, your first reaction may be that things can’t really be that bad. But in its early stage, you may be looking only at the tip of the iceberg, and things may get a lot worse. In a crisis, cash becomes king. To survive the crisis, you need to prepare for a long struggle to defend against the worst conditions so you will be prepared to pass through the eye of the storm.

Lesson 5: Never waste a good crisis. The challenges you are facing represent your best opportunity to make major changes in your organization because they lessen the resistance that exists in good times. You should move aggressively to take actions necessary to strengthen your suggestion as you emerge from it.

Lesson 6: You’re in the spotlight: Follow True North. In a crisis, everyone watches what you do. Whether you like it or not, you are in the spotlight both inside and outside the company. Will you stay focused on your True North, or will you succumb to the pressure?

Lesson 7: Go on offense; focus on winning now. Coming out of a crisis, the market never looks the same as it did going in. So don’t just batten down the hatches and wait for business to come back. This is your opportunity to reshape the market to play to your strengths. While others are licking their wounds, you should focus on winning now.

Look at a crisis as a gift. It provides you a golden opportunity that may not come again to reshape your business and your industry and emerge as a winner. But you’ve got to be bold and focused to seize it. The best leaders emerge from a crisis as winners because they are both aggressive and courageous in turning the challenges to their advantage. Beyond that, they are passionate about using their leadership to make a difference in their employees, their organization, and the world. 

Excerpted, with permission of the publisher, from 7 Lessons for Leading in Crisis by Bill George. Copyright 2009, Bill George. Published by Jossey-Bass, an Imprint of Wiley.

About the Author(s)

Bill George Bill George is professor of management practice at the Harvard Business School and former chairman and CEO of Medtronic, the world’s leading medical technology company. Under his leadership, Medtronic’s market capitalization grew from $1.1 billion to $60 billion, averaging 35% per year. He is the author of the best-selling books True North, Finding Your True North, and Authentic Leadership