Crisis Management

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Those who persist will lose

Leading in crisis 

This article appeared in an abridged version on forbes.com.

In Chinese, the character for crisis is made up of two parts. The first can be translated as danger, the other as opportunity. We find both qualities in crises. Not all crises are opportunities, but more than we think. 

„Between stimulus and response there is a space. In that space is our power to choose our response. In our response lies our growth and our freedom.”

Viktor Frankl

When we recognize that in all of life’s struggles we are empowered and not helplessly at the mercy of fate, valuable perspectives and options for action can emerge. 

Why it is more important than ever for leaders to engage in crisis management

Leaders have a responsibility to ensure the well-being and continuity of the systems they lead. This duty weighs heavily, but you can prepare accordingly in advance. Believe me when I tell you that you already have everything you need for this within you today. For sure, you are much more crisis-proof than you suspect.

Make a list

  • Which life crises have you already overcome?
  • How did you overcome them?
  • What have you learned?
  • How do you transfer what you learned to the here and now? 

The World Economic Forum (WEF) conducted a survey[1] in 2022 to survey global risks. Respondents included academics, leaders, government officials, civil society individuals, and thought leaders. The WEF report covers human suffering, societal disruption, economic shocks, environmental degradation, and political instability. The climate crisis and its ecological consequences dominate the WEF’s list. Even more, nearly half of all respondents (41.8%) said they see the outlook for the next three years as constantly fluctuating with many shocks.

It is important to know the difference between crisis and risk management. In corporate practice, the two portfolios overlap. While risk management focuses on how to prevent threats, crisis management focuses on developing action plans for responding to emergencies and executing those plans. 

[1] https://www3.weforum.org/docs/WEF_The_Global_Risks_Report_2022.pdf

The 5 essential elements of crisis management can be summarized as follows

Prevent
Identify, avoid, and/or minimize risks and threats

Plan
Developing contingency plans

Inform
A wide range of current information and news must be used. Networks can carry and give good impetus. 

Practice
Testing the contingency plans

Execute
Effective execution when needed

Crises put leaders to the test

Crises separate the wheat from the chaff. They test leaders on their leadership skills, creativity and resilience. These skills cannot be learned from a guide or manual. In many ways, successful crisis management for leaders is an intense examination of themselves and the challenging acquisition of necessary skills.

Leaders need confidence in themselves and others 

Leaders must be role models within a group, be the rock of the group and make their decisions based on facts. Above all, this requires self-confidence. At the same time, they must be less likely to overestimate or underestimate themselves, they must know where their limits are, what they can take on themselves and when they need to hand over tasks. They must be able to take over, but also to let go. To be able to do this, they need to have a stable personality that can trust in themselves and others. 

2 Leaders must be empathetic

Good leaders must have a good sense of their team and recognize what team members need, especially in times of crisis that trigger uncertainty and powerlessness. Empathy is not a nice-to-have, it is a strategic imperative that must be an indispensable leadership quality even away from crises. Empathy is a key driver of innovation, engagement and inclusion. Recent research[1] shows that cultivating empathic leadership is one of the most important strategies for responding to crises. An empathic leader shows (caring) concern and understanding for the circumstances of his or her employees. 

[1]  https://www.catalyst.org/reports/empathy-work-strategy-crisis/

Leaders must foster creativity

Creativity is the key to getting through a crisis and reorganizing after a crisis. In order to be successful through severe crises Leaders need to discover and use the creativity of their employees. Leaders need to rethink their ideas of what creativity means in order to foster it. Creativity is universal. It is part of being human. Creativity involves the use of our individual imaginations, the ability to share ideas and interpret the world around us. Promote a culture that reinforces diversity. People want to hear others’ ideas so they can inspire or sharpen their own. But above all, encourage your own creativity. Paint, tinker with a model train, do a puzzle and let your thoughts run wild. Creativity expands the scope of action and allows ideas to mature like an incubator, promotes associative thinking and relaxes.

Leaders must (be able to) communicate

Especially in times of crisis, it is of particular importance for leaders to communicate with everyone at all levels. Clearly, calmly, factually. It is also possible to communicate what is still uncertain or in the decision-making process. Especially in uncertain times, your employees want to know what is coming up and it is reassuring to know that you are actively dealing with these problems. A “I don’t have an answer yet, but I’ll give you feedback as soon as I do” is more confidence-building than beating around the bush or not talking about it at all. Also address your concerns and fears: What is negative, what is interesting, what is a positive benefit from the situation? 

Leaders must remain calm

Crises narrow our field of vision, be reinforce prejudices and selective perception of the world. To deal with crises emotionally, our brain tries to simplify as much as possible. The catch? Our room for maneuver becomes narrower. Neuroscientists call this effect “predatory fear”: the less threatened we feel, the more room we have to think through scenarios and act strategically; the more threatened we feel, the less room for action our brain allows. Without our active intervention, we react reflexively, are less creative in finding solutions to problems than under normal circumstances, and explain the world to ourselves more simply and as we like it, but not more truthfully. Therefore, it is important for leaders in threat scenarios to inform themselves more broadly than usual, to be open to facts and other perspectives. And: Leaders should focus on meditation and mindfulness exercises especially when everyone around them is acting in panic. Meditation sharpens skills such as attention, memory, emotional intelligence, social awareness and, most importantly, the inner calm that leaders need to manage crises.  

These skills cannot be acquired in a weekend workshop. They require intensive work with oneself, time, patience and, above all, lots of practice. They are not skills that leaders should only pull out of their first aid kit when an emergency occurs. They are the basic skills of great leaders that should be used even in the calmest of winds.

[1] https://www3.weforum.org/docs/WEF_The_Global_Risks_Report_2022.pdf

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Let Stress go

Entrepreneurial and individual ways to reduce stress

Nine out of ten workers say that stress at work harms their wellbeing and mental health. At the same time, three out of five workers cannot count on the support of their superiors when it comes to coping with stress. And this happens even though it is known that long-term stress usually leads to physical illnesses; Sometimes, it even causes a burn-out.

This statistic makes one thing very clear: The number one stress factor is work related, whether it’s the workload, the lack of job security or a lack of work-life balance.

And: According to The American Insitute of Stress which has been regularly conducting studies on the subject since 1998, stress has been undeniably increasing in recent decades. The fact that stress makes us sick is well known; so well known that in New York, Los Angeles, and other U. S. cities, police officers who have a heart attack on the job or off duty are compensated because heart attacks are considered to be work-related damage caused by stress.

But wouldn’t it be more sensible to minimize stressful working conditions as far as possible so that the 40% of workers no longer experience their job as awfully stressful?

According to the American Institute of Stress study, workplace stress costs $300 billion in lost productivity every year. At the latest now, leaders should understand why it is vital to address this issue and take action.

What causes stress at work?

It should come quite naturally for every company to deal with stress-reducing factors and to take appropriate steps to eliminate them, where possible. Use a risk management concept to determine:

  • what are the stress triggers
  • where you will most probably find them in your corporate culture 
  • and what causes them.

Above all, you should pay attention to this

Causes of work-related stress

Some of the factors that often lead to work-related stress are:

  • Long working hours
  • High workload
  • Changes within the organization
  • Short deadlines
  • Changing the tasks
  • Job insecurity
  • Lack of autonomy
  • Boring work
  • Insufficient skills for work
  • Excessive supervision
  • Insufficient working space
  • Lack of adequate resources
  • Lack of equipment
  • Only a few opportunities for advancement
  • Harassment
  • Discrimination
  • Bad relationships with colleagues or superiors
  • Crises

10 steps to a stress-free working environment

1 Work-Life Balance 

Working nonstop tires and exhausts employees. Everyone needs breaks to rest and recharge their batteries. Design the jobs you offer in such a way that a work-life balance is possible.

2 Flexible working models

Give your employees more autonomy over their working hours and allow them to work remotely if they wish so.

3 Clear Structures and Distribution of Roles

Employees feel stressed when they are not clear about their duties and responsibilities. Therefore, create a clear governance structure where everyone knows who they report to and who is responsible for what. This will improve work efficiency and contribute to a more relaxed environment.

4 Communication

Communication plays a crucial role in any company. When employees are able to communicate smoothly with their colleagues and supervisors, this reduces stress considerably. Ensure that all communication channels within the company are working properly. This way, you can make sure that people at other levels will receive the correct information.

5 Recognition and commitment

Involve your employees. A high level of employee commitment leads to higher productivity and satisfaction. Dedicated employees are committed to the goals and values of the company and are also motivated to contribute to the company’s success. In addition, employees need growth opportunities. If they do not exist, work morale and performance suffer and stress increases. Therefore, create recognition and reward programs.

6 Wellness

It is well known that exercise and a healthy lifestyle are essential to reduce stress at work. Introduce corporate wellness programs for your employees, e. g. in the form of paid membership in fitness and meditation centers, healthy food in the canteen, or free check-ups.

7 Prevention and De-escalation of Conflicts

Conflicts are inevitable and are part of our working lives. Reasons for a conflict may include promotion opportunities, salary disputes, feelings of lack of appreciation, and personal differences. Even if conflicts cannot be completely avoided, you can counteract and mitigate them by addressing the subject as quickly as possible instead of ignoring it. Looking the other way will only bring complications. But also avoid punitive reactions. Always try to solve conflicts positively and without negative reinforcement.

8 Silence

Noise is one of the primary causes of stress at work; high noise levels dramatically increase stress. Therefore, ensure a quiet environment and take precautions to keep the noise as low as possible. These include headphones with noise-cancelling, insulated walls and ceilings, or sound-absorbing partitions between workstations.

9 Cooperation and support

A work environment without support leads to stress and poor health. Ensure that employees are provided with adequate guidance by their supervisors or colleagues and foster a culture of collaboration and respect.

10 Corporate Culture

Schaffen Sie eine Create a corporate culture where all employees’ opinion is welcome. We need an environment where all questions can be asked and answered.

And what can each individual do?

In addition to the measures mentioned above to reduce workplace stress by the companies themselves, each individual can, of course, take steps to cope better with stress.

Concrete steps to reduce stress

Body level

  • Get enough sleep
  • Move more
  • Eat healthy food
  • Listen to soothing music
  • Relax your muscles
  • Breathe properly

The level of Mind

  • Observe yourself and see what causes stress in you
  • Create to-do lists and work them out successively
  • Break large tasks down into smaller, more easily manageable subtasks
  • Prioritize. “Stress is the inability to decide what is really important.”
  • Create healthy rituals
  • Get help 

The level of the Soul

  • Say ‘No’ more often
  • Take a break from social media
  • Accept stress as a natural factor of life
  • Have positive conversations with yourself
  • Make conscious pauses
  • Practice Meditation and Mindfulness

Even if we follow all the well-meant advice and implement it, we can never altogether avoid stress; this makes it even more important to recognize stress as part of our lives. But don’t forget one thing:

Sources:

https://www.stress.org
Mind the Workplace Report, 2021
https://www.betterhealth.vic.gov.au/health/healthyliving/work-related-stress#what-are-the-main-work-related-stressors

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Home-Office: Beware of the Cliff Ahead

Beware of the Cliff Ahead

shortened version

Why the conversion on home offices is more complicated than it first appears

The pandemic has taught us a lot. For one thing, it refutes the old wives’ tale that home office employees don’t do anything. On the other hand, we firms have begun to see teleworking as an enticing, cost-effective alternative to expensive office spaces.

Win:Win, right?

But no, it’s not. After 9 months of pandemic, many managers are still not fully aware of the risks associated with the quick, so-called switch, to home-offices. We don’t yet know the actual long-term effects of a change from in-office to home-offices. We don’t know yet whether employees will be able to continue to work productively and efficiently once the shock of the pandemic has subsided.

We don’t know.

To believe that after a few months of operation outside the usual office structures, we understand everything there is to know for successful restructuring is an act of sheer hubris that is nonetheless tripping up many entrepreneurs. MagnoliaTree has spent years dealing with digital management. We know that it takes much more than equipping employees with ergonomic office furniture and eye-saving monitors. The real key words are communication, structure, culture, and performance. But more about that later.

Now is the time for some critical reasoning

The Gallup Institute has asked remote workers about their preferences on how to conduct business after the pandemic: 49% of all respondents would still prefer to work from home. In many companies known to us, the verdict is even clearer: over 90% of the workforce would like to work from home permanently. At this point, entrepreneurs and strategy decision-makers should reflect on why the majority of employees do not want to be physically present in the company. Is it really only because they want to save themselves a long commute and thus money and time; or because of a bad working climate; the working conditions, the management and/or the prevailing structures?

In short: is there a problem with the atmosphere at your office?

Four things to keep in mind when transitioning to working from home

The pandemic may have shown entrepreneurs that teleworking is an effective contingency plan to ensure productivity, business continuity and job retention. But it has not taught us how to actually make the transition successful in the long run. Virtual work requires a shared responsibility and commitment from both employer and employee. This may work after a test phase of several months in companies with well thought-out and well-oiled structures, but companies with potential for improvement in terms of working conditions and leadership qualities should intensively address the improvement of entrenched deficiencies before implementing such a demanding model as teleworking. Our tip: Before you get carried away with a complete switch to virtual working, consider a model with voluntary rather than mandatory remote working. Offer employees who would like to work from home an opportunity to do so, but don’t force them to move out of familiar office structures. After all, the second half of the respondents mentioned at the beginning of the survey prefer to work in a classic office setting.

All, however, you create structures that minimize already known risks of remote working and that engage and motivate your employees. Grant your employees a say in shaping a new way of working together, because there is not a single sustainably successful corporate change that has not relied on participative co-creation. Because success in remote working spaces begins where we succeed in creating a connecting virtual community across physical borders.

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Separate the wheat from the chaff

A wise guide to effective leadership in uncertain times

by Sabine Gromer

shortened version

The pandemic took us all by surprise. Worldwide, governments have responded to COVID-19 with various forms of defensive strategies such as isolation and withdrawal. In doing so, politicians rely on the cooperation of their citizens, the adaptability of the economy, and the pharmaceutical industry to quickly develop a vaccination.

For entrepreneurs and leaders defence and withdrawal are an ill-advised answer. Simply put, we must act with the exact opposite approach: utilise offense and proactively face new challenges with high impact countermeasures. Now is the time to separate the wheat from the chaff in our companies and in our leadership. Like a magnifying glass, this crisis allows us to see a layer more clearly of that was not easily visible before. We can now see more clearly what is wheat and what is chaff. This article can help you achieve this in a practical and effective way.

5 Guideposts to effectively lead your company through crises

1. When stressed, our brain only functions to a limited extent. Stay informed, creative and alert!

Crises narrow our fields of vision. They reinforce our prejudices and selective perceptions of the world. In order to be able to emotionally deal with the crisis, our brain tries to simplify as much as possible, while our scope for action becomes smaller. Neuroscientist Dean Mobbs calls this effect “predator anxiety”: the less we feel threatened, the more space we have to weigh out scenarios and act strategically. The more threatened we feel, the more restricted our cognitive abilities become. Without our active involvement, we react reflexively and are less creative in finding solutions to problems than under normal circumstances. We construct explanations of the world, which, while they may be less truthful, are simpler and reflect what we want to see.

2. The outcome is in your hands!

All players within the same industry sectors have been similarly affected by the pandemic, but the degree of impact among individual competitors is already visibly very different. Viktor Frankl aptly gave a reason for this discrepancy:

Between stimulus and response there is a space. In that space is our power to choose our response.

3. Become more selective!

There are factors you can simply not change, nor impact. Don’t waste your energy on fighting windmills. Focus your attention on things that you can influence instead. Use this serenity verse as a guide and decision-making basis for your actions and perspective.

Remember the 20%:80% rule of Pareto. The law of Pareto posits that 20% of your customers will make up 80% of your profit. Likewise, 20% of your actions make up 80% of your success. So be selective in the choice of your actions, but consistent in their implementation.

4. Avoid Management Mistakes in the virtual work environment

Click to enlarge image

That leads us to the last guidepost.

5. TRANSPARENT AND VISIBLE COMMUNICATION IS THE GOLDEN KEY

Stay visible and approachable in the virtual work environment and above all: COMMUNICATE! Verbally and non-verbally!

Feel free to share if something is uncertain or still in the decision-making process. Your employees want to know what to expect and it is reassuring to know that you are actively dealing with problems. An “I don’t have an answer yet, but I’ll give you feedback as soon as I have it” builds more confidence than beating around the bush. Also address your concerns and fears: what is negative, what is interesting, what are the situational benefits?

In order to keep your team together and motivated use the full range of virtual tools. You can find an excellent and comprehensive overview of virtual tools here.

The coronavirus has infected many entrepreneurs from a wide range of industries. The symptoms vary from absolute lethargy and severe depressions to new powers and visions, concentrated energy and an unbreakable optimism. It is not the virus that controls the symptoms, you decide where this rocky path leads you, whether you stumble over every stone or combine your strengths and jump over big obstacles. It’s up to you. You have the antidote in your hands.

Special thanks to Daniela Luschin for editing this article and her excellent support.

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