In fact, a true leader is capable of using a crisis to carry out changes within the organization so that it emerges stronger and in a better position to take advantage of the changed market conditions. What are the characteristics that the head of a company must display when disaster strikes?
Stay in controlIf your sales suddenly drop because of a new competitor entering your market or you cannot manufacture your best-selling product because a key raw material is not available, there is nothing much you can do about it immediately.
The issue at hand can only be resolved after a well thought-out strategy is put into place. Obviously, you cannot control the crisis right away. But you can control how you react to it.
Everybody in your organization will be watching you and will follow your lead. It is up to you to remain calm and put the appropriate resources into play to tackle the situation facing your company.
Don't be afraid to take decisionsRemember that "desperate times call for desperate measures." If you have a perennially loss-making manufacturing unit or sales outlet it may be time to close it down before it drags the whole company into the red.
You cannot please everyone with each of your decisions. Some people are bound to be adversely affected. As a leader, it is your duty to do the best that you can for them and move on.
Jack Welch, the immensely successful CEO of GE, earned the moniker Neutron Jack because of his ruthless management style. He fired entire layers of management and closed down many of the company's businesses.
GE performed extremely well during his two decades at the helm largely because Jack Welch had the courage to go ahead with what he thought was best for the company regardless of criticism.
Change course, your company's future may depend on itIn 1943, speaking about the demand for computers, Thomas Watson, president of IBM said, "I think there is a world market for maybe five computers." Several decades later, in 1977, Ken Olson, founder of Digital Equipment Corporation said, "There is no reason anyone would want a computer in their home."
Both predictions were made by top managers of world-class companies. Both organizations went on to become market leaders. How did they go on to become so successful when their predictions were so obviously wrong? They were not afraid to change direction when they saw a demand for their product.
Concentrate on what is importantWhen times are difficult many managers tend to retreat into their shell. They spend time on trivial issues and ignore the problem that is threatening the very existence of their organization.
Unless the CEO is able to galvanize the top management team to squarely address the critical issues facing the company, there is little chance of climbing out of the crisis.
Johnson & Johnson's handling of the Tylenol crisis is legendary. Back in 1982, seven people in the Chicago area died after taking cyanide-laced Tylenol capsules that someone had deliberately poisoned. The company decided to withdraw all 31 million bottles of Tylenol from the market and relaunch the product in tamper-proof packaging.
Within a year, Johnson & Johnson saw its share of the analgesic market climb from a low of 7% to 30%. The company's chairman, James Burke, was widely credited with providing the leadership that pulled Johnson & Johnson out of the crisis.