The path to the new normal: decision making in uncertain times

One of the first pieces of advice that any psychologist gives their patients is that they should never make an important decision at a time when they are experiencing an emotional crisis.

If we apply this principle to business owners, no decisions will be made now or in the near future given the disruption companies face. Companies need to establish a framework to make decisions during times of disruption. McKinsey released a report in May 2020 which discusses this.

Take a breath
Pause and take a breath—literally. Giving yourself a moment to step back, take stock, anticipate, and prioritize may seem counterintuitive, but it’s essential now.

When asked what makes a great hockey player, Wayne Gretzky is said to have answered, “a good hockey player plays where the puck is. A great hockey player plays where the puck is going to be.”

That is easier said than done. In a crisis atmosphere, it is tempting to jump from one urgent task to the next, to take charge of what’s right in front of you— to just execute. Yet this can be a tragic mistake. Research shows that the simple act of pausing, even for as little as 50 to 100 milliseconds, allows the brain to focus on the most relevant information.

A dramatic example of a leader who paused during a landscape-scale crisis is Captain Chesley Sullenberger. After a bird strike caused both of his plane’s engines to fail shortly after take-off from LaGuardia Airport in January 2009, he had very little time to decide whether to try to land at a nearby airport, as the control tower was urging, or to aim for a water landing. With no training for such a scenario, he stopped and reflected for a matter of seconds—all that he could afford—to determine if he could get to the airport safely and instead pivoted to the Hudson River for landing. All 155 people on board survived.

There are several ways decision makers can take a breath:

• After telling your team you need a moment to think, try to gain a broader perspective.
• Imagine yourself above the fray, observing the landscape from above. This is what leadership expert Ronald Heifetz calls a “balcony” perspective. Despite the “fog of war” that might obscure much of the current state of play, do your best to take a broader view.
• Ask yourself and your team these questions: What is most important right now? What might we be missing? How might things unfold from here, and what could we influence now that could pay off later?

This ability to anticipate how things might unfold— and to begin to act accordingly—can help avoid knee-jerk reactions that lead to poor outcomes.

In the coronavirus context, if you are a leader of a grocery-store chain, you are seeing a drastic increase in purchases. You must think about your supply chains, whether to ration items, and how to put safety protocols in place for customers.

In addition, there are the questions of whether to modify store hours, whether to limit service to curbside pickup and delivery only, and how to handle staffing. All of these decisions are related, so you must pause and prioritize the most pressing issues first. That also means having the discipline to ignore distractions.

Involve more people
Amid uncertainty generated by a crisis, leaders often feel an urge to limit authority to those at the top, with a small team making the big decisions while huddled behind closed doors. They should reject the hierarchical model that they might be more comfortable with in normal times and instead involve many more stakeholders and encourage different views and debate. This approach can lead to smarter decisions without sacrificing speed.

Specifically, leaders can use a so-called fishbowl model in which decision makers and key experts sit around a table—or virtual table—to make a decision (exhibit). At the table are one or two decision makers, multiple experts, and one or two “empty seats” for other relevant stakeholders in the gallery to rotate in as they have points to share. A majority of stakeholders observes the meeting, which builds understanding without having to make an extra communication step afterward.

In an in-person meeting, stakeholders watching the fishbowl can contribute information and ideas by temporarily taking one of the empty seats, briefly participating in the meeting, and then returning to the gallery. In a virtual meeting, the stakeholders are on mute but can participate by “raising their hand,” with a moderator inviting them in and unmuting them.

There are several steps leaders can take to involve more people:

• Clarify the decisions to be made.
• Identify a small number of decision makers.
• Identify who should have a voice, including relevant stakeholders and experts, and those who will implement decisions.
• Create a forum for rapid debate to take place. Be clear that everyone has a voice but not a vote.

When following this approach, it is possible to involve a large number of stakeholders and experts without sacrificing speed. Especially when things are unfamiliar and the decisions you are considering are bold, you need many points of view to make sure the decision makers aren’t missing something.

Once decisions are made, you can quickly pivot and speak to those who will be executing the decisions to clarify the actions to be taken, timelines, and accountabilities and answer any questions they have about what comes next. This not only saves time, by removing a communication step, but it can also enhance the potency of the message itself.

In today’s crisis atmosphere, waste-management leaders are likely experiencing a big shift in demand for their services. There is more household waste that needs pickup and less waste from office buildings and restaurants. How can these companies better accommodate the shift in demand? This decision should include a wide range of stakeholders, including representatives of the frontline employees (who may have good ideas about routes and which employees to deploy for which shifts) and the customers.

Make the critical small choices
Some small choices that leaders make in the short run could loom very large over the long term as the crisis unfolds. They can be hard to spot, but leaders must look for them.

In the normal course of business, many big-bet decisions are obvious. There’s a large cost or major impact, such as acquiring a company, marketing a product in a new geography, or shutting down a factory, with these decisions. But some decisions that seem small or routine at first can have large long-term strategic implications.

In an example related to coronavirus, Netflix has gone to lower-resolution streaming in some locations o ease the data load on information networks. While most people won’t notice the difference in quality, the decision could mean that the internet doesn’t crash, which would be a big problem when so many are working from home and children are relying on the internet to do their schoolwork.

There are several steps leaders can take to make critical small choices:

• Anticipate multiple possible scenarios for how things might unfold over time. No one has a crystal ball, and detailed, precise predictions are likely to be wrong because things are in flux. Anticipating a range of possible pathways and general scenarios can be extremely helpful in thinking through what might happen.
• Make a list of five to ten choices or actions that making today might, depending on what happens, make a difference later. If we fast-forwarded six months and identified a small decision or action that would have made all the difference if we had taken it, what might that decision or action be?
• Engage others to help identify which small decisions or actions you should address now, in case they become the difference makers down the road. Which of these should you spend time on today? Which should you monitor and reconsider later? These decisions could range from actions to save cash and ensure liquidity to actions to beef up the resilience of your supply chain by quickly exploring alternative suppliers.

The response to the Boston Marathon bombings in 2013 is a good example of a critical small choice that made a big difference. The decision was made to disperse severely injured people to eight different hospitals. While some of those hospitals were farther from the bombing site, vascular surgeons were called to those locations to begin operating right away. If victims had been sent only to the closest hospitals, many would have had to wait for surgery and possibly bled to death.

The role of BRPs

The commonality between a BRP or a turnaround professional and a psychologist is that it is easy to make the recommendation to not make decisions during a time of crisis because these parties are emotionally detached from the crisis. However, this also creates a perfect opportunity for these professionals to manage the crisis or distress. Distressed business owners are looking for innovative and unique ways to approach their distress and manage it. This is the space where you play. Helping companies make small decisions and communicate them effectively is why business rescue and business turnaround will be important until the end of the Pandemic.