5 ways to manage a crisis, according to McKinsey
April. 08, 2020
As the coronavirus pandemic progresses, business leaders are looking for effective ways to respond. Here are five practices that can help you lead your organization through this unsettled time.
As the novel coronavirus pandemic progresses, business leaders are telling our colleagues and us that they have never experienced anything like this before. There is no script for dealing with a crisis that is this far-reaching and unpredictable. The only way to respond effectively is to decide what actions to take as the situation unfolds. For many decades, we at McKinsey have helped leaders navigate all manner of crises across sectors all over the world. While different challenges require different responses, and even though the current climate is new for all of us, we’ve found it useful to draw on our years of experience to identify some practices that can help. Here are five practices that can help you lead your organization through this unsettled time.
Build a network of teams
In routine emergencies such as a fire in a factory, senior executives can direct a predefined response. But in a fast-changing situation like the coronavirus outbreak, a small executive group can’t collect information or make decisions quickly enough to respond effectively.
What you need now is a strong network of teams that share a purpose and collaborate efficiently across groups.
As commander of the US Joint Special Operations Task Force during the Iraq War, general Stanley McChrystal saw that the hierarchical task force was too rigid to counter the shifting threats posed by Al-Qaeda. His decision to reconfigure the task force as a “ team of teams ” allowed it to mirror and neutralize enemy forces.
As an executive, your job isn’t to tell your teams what to do; your job is to set clear priorities and empower those teams to shape the company’s best response.
Let new leaders rise to the occasion
Just as you’ll shift responsibilities to a network of teams, you’ll want others to make and implement decisions. In a crisis, the best decision-makers will display two qualities. One is “deliberate calm,” the ability to detach from a fraught situation and think about it clearly. The other quality is “bounded optimism,” or confidence tempered with realism.
Leaders with these qualities face facts. They accept that things could get worse, yet remain composed and purposeful. Gene Kranz, the flight director of the Apollo 13 lunar landing mission, remained famously determined to bring the three astronauts aboard a damaged spacecraft back to Earth—and led his “ tiger team ” of flight controllers to do just that.
Hit pause before calling a play
In a crisis filled with unknowns and surprises, you can’t wait for all the facts to become clear before deciding what to do. Nor can you rely on intuition alone. You must learn as much information as possible and make choices in near-real time—without overreacting.
To do that, take brief but frequent pauses from managing the crisis response. Use those intervals to assess the situation and anticipate what might happen. Then, decide whether you need to stay the course or make new moves.
For captain Chesley Sullenberger, the airline pilot who pulled off the “ miracle on the Hudson ” emergency landing when a flock of geese collided with the aircraft and took out the plane’s engines, pausing before taking action was what ultimately averted a catastrophe. Instructed by air-traffic controllers to head for an airport, Sullenberger took a few crucial moments to assess the plane’s condition, realized it couldn’t make the journey, and brought it down safely on the Hudson River.
In a crisis, people’s minds turn first to their most basic needs. Will I be sickened or hurt? Will my family be safe? What happens then? Who will care for us? Good leaders will acknowledge that workers and their loved ones face difficulties: illness, financial stress, long hours at work; potential job insecurity, extra caregiving duties, and many more concerns. Notice how people are struggling. Let them know that you see it. And take visible measures to support them.
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In response to the coronavirus epidemic, the Wikimedia Foundation, which operates Wikipedia, swiftly adjusted its working practices to lessen the strain on its employees. Besides guaranteeing full pay for contract and hourly workers and waiving sick days, the foundation’s CEO Katherine Maher told employees that they needn’t work more than half their normal hours so that they have extra time to look after themselves, their families, and their neighbors.
As a leader, it’s important to out for yourself, too. As stress and fatigue build up during a crisis, you’ll have more trouble processing information, remaining level-headed, and exercising good judgment. Invest time in your well-being to stay effective as the crisis goes on. Modeling good self-care practices will also benefit your employees.
Crisis communications often hit the wrong notes. An upbeat tone or evasive answers to questions will only raise suspicions. So will going quiet for long stretches while you gather information and make decisions. Neither approach is reassuring. Frequent communication shows that you are following the situation closely and adjusting the company’s response. Make sure to address audience’s concerns and questions frequently, even if you don’t have significant updates to share.
As social unrest spread across the Middle East in 2011, constant communication helped grocery retailer Majid Al Futtaim maintain the trust of its employees in Egypt—many of whom stepped in to protect stores against looting. This approach, coupled with a decision to let employees purchase goods for themselves and give out goods locally while many stores in the country were shuttered, enabled Majid Al Futtaim to steer its business through a difficult time.
The coronavirus pandemic is testing leaders in every sector. Challenges could persist for longer than anyone expects. This uncertainty is all the more reason for you to embrace these five practices. No one, not even leaders, have the answers right now. But leaders who adapt now will help support their organizations and communities during this crisis and strengthen and prepare them for whatever comes next.
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