The worldwide containment effort to halt the spread of COVID-19 has had far-reaching impacts on both the world economy and local communities.Our lives have been significantly altered and the economy has been severely impacted, as reflected in the Dow Jones Industrial Average, which was down nearly 30 percent before partially recovering recently. In addition to our 401ks quickly shrinking, job losses have accelerated over the last two months with real unemployment now over 20%, levels not seen since the Great Depression.
There is no doubt that the coronavirus pandemic qualifies as a crisis, and that it has and will cause many hardships for people. But a crisis also creates opportunities for leaders.
Leaders vs. managers
Functionally, managers and leaders apply different approaches in pursuit of different outcomes. Managers get people to follow rules and procedures in an effort to reduce risk and deliver predictable outcomes. Managers view variability as a threat to be reduced as much as possible. A crisis creates change that often overwhelms most management systems.
Leaders, on the other hand, rouse others to take risks and challenge the status quo in an effort to achieve something new and better. Leaders view variability as an opportunity to achieve results that others think are impossible. A crisis is an incredible leadership opportunity.
Crisis creates leaders
A crisis shifts the organizational mindset in three important ways.
1. An increased appetite for risk
During normal times, business decisions are based on some type of risk/reward analysis. Is the potential gain enough to outweigh the risk of failure? In practice, the fear of failure almost always overrules the argument for change. As a result, most organizations are inherently risk averse.
But in a crisis, the dynamic shifts dramatically. When everything stops working as expected, risk becomes less risky. Change becomes not something to be feared, but rather a strategy to possibly make things better. When an organization realizes that there’s almost no downside to taking a chance, then everything starts to become possible and the real risk becomes doing nothing.
A crisis creates an opportunity for leaders to convince others that it’s in their best interest to embrace change and take risk.
2. A renewed focus on what really matters
However, a crisis fundamentally shifts this balance. When your back is up against the wall, the only priority becomes survival. You have no choice but to direct all of your attention to the problem that really matters. This focus is an extremely powerful tool that can give ordinary people the ability to do the extraordinary — especially when people’s jobs are at stake.
A crisis enables leaders to focus everyone on what really matters and to eliminate distractions that might otherwise get in the way of the goal.
3. A reevaluation of mindset
According to the consulting firm McKinsey, 84 percent of executives agree that innovation is critical for their business, but only 6 percent are satisfied with their performance. It seems that the more people try to implement processes to be more innovative, the less they actually do it. The problem is not the process, but the people following it — and more specifically, their mindset. But if we’ve learned anything from history, we’ve learned that a crisis has always proven to be a great time for innovation. During difficult times people’s needs shift, which opens up all kinds of new opportunities for innovators to solve new problems.
- Innovation doesn’t have to be tech driven. It can show up in many different ways.
- An innovation can be an old idea that has been reapplied in a new way.
- Ignorance brings the most success.
- Determination is a key mindset for innovators.
When an organization faces a crisis, the people inside it are forced to reevaluate how they think about their work. This opens the door to shifting the entire mindset of the organization. If you’re satisfied with how things are, you will never motivate others to overcome a crisis — because innovation requires a mindset to pursue the impossible, and that mindset starts with the leader.
A crisis forces leaders to reevaluate their mindset and create an environment where success is the only option.
Perspective is a choice
You have a choice in how you view this crisis. In fact, the opportunity actually lies in your perspective.
A crisis is the perfect time for people to take more risks, focus on what really matters and embrace the opportunity to lead.
Source: Chuck Swoboda – How a Crisis can Unleash the Innovator’s Spirit.