By Gloria Lombardi

Kearneyphoto(1)“Managing through a crisis is not just about surviving and stabilising the organisation. It is also about thriving and figuring out how to operate better and differently.”

Mike Kearney (pictured right) is the leader of Deloitte Advisory’s Strategic Risk practice. He is also the creator of “Resilient” – a new podcast series by Deloitte Advisory that explores the story of leaders who led through crises, disruptions, or significant risk events.

I wanted to explore with Kearney what leaders can do to face challenging situations and come back stronger. In this interview, he shares the traits of resilient leaders, how they communicate with their employees, and how they turn a crisis into an opportunity to innovate.

GL: What does it mean to be a ‘resilient’ leader? Have you found some common traits among the people that you have interviewed?

MK: Resilient leaders have a deep sense of values. Everything starts and ends with a common set of values. In an upcoming episode of Resilient, the former CEO of Harley Davidson shares a great story. When he was a kid his dad was a supervisor at a manufacturing plant. During the interview, he said that everyone respected his father because he had a unique ability to listen to people. He communicated well, engendered trust among his employees, and he was very down to earth.

In fact, resilient leaders are honest, transparent, and do the right things. A resilient leader deals with the issues head on. They don’t try to sugar coat the problems, or make a situation sound better than it is. They identify what the issues are. They communicate to all stakeholders transparently, whether it is to external shareholders, or to the employees, or to the board.

Resilient leaders absolutely get to the truth, go to the root cause, communicate it openly and fix it.

GL: In fact, how do resilient leaders communicate with their staff, especially during a crisis? Eric Pillmore and Mike Kearney_grayscale 400x400

MK: A good example comes from Eric Pillmore (pictured right) in episode two of Resilient. He is the former corporate governance SVP at Tyco International. He joined the company in 2002 following an allegation of fraud. Pillmore and the leadership team framed the crisis as an opportunity to make the business more ethical. At the time, there were around 250,000 employees globally so it was hard to communicate. But the leadership team did something fascinating. They shut down the organisation for an entire day to show everyone the relevance of the situation. For a full day, the management communicated the ethical standards that every employee needed to hold true.

Another important aspect of communication comes from Daryl Brewster (pictured below), the former CEO of Krispy Kreme. He talks about the need for simplicity. He needed to reverse the company’s financial decline and restore the brand to its former glory. He and his team came up with a strategy that was focused on the three ‘Ss’ of survival, stability and sustainableDaryl Brewster(2)

In fact, they needed to survive, stabilise the organisation and make it a sustainable business. That was all that mattered, and Brewster wanted to ensure that the company’s message was as simple as possible. Something that people could get their head around and internalise.

They called the strategy KRISPY, which is an acronym. For example, the ‘I’ was for innovation, and the ‘Y’ for you. It was about letting people think of what they were going to do to ensure that they executed on the strategy.

So, from Brewster we learn that when you try to win the hearts and minds of people, the message cannot be overly complicated.

Simplicity is key to ensuring that the message sticks.

GL: There is much debate around extroverts versus introverts in leadership. Yet, there is not a one-size-fit-all. In fact, is great leadership really a personality thing?

MK: There are some great leaders who are extroverts and good orators. And, there are equally great leaders who are introverts and deep in thinking. Yet, resilient leaders share one trait in common: humility.

In fact, every leader that I interviewed, whether extroverts or introverts, was humble. They talked about their achievements in terms of “it was not me; it was my team.”

Great leaders think of themselves as not being better than everyone else in the group.

For example, after the interview that I conducted at Harley Davidson, a member of the staff came to me once the CEO walked away. He told me: “I want you to know something. That guy – referring to the CEO – was responsible for turning our organisation around. But, he will never tell you that.”

GL: Do resilient leaders rely on some key people to get the support they need during a challenging time?

MK: Yes. Resilient leaders make sure they have a leadership team around them that is competent, capable, and most importantly, cohesive.

Often resilient leaders change their entire leadership team, or a large percentage of it. And it is not because of the technical skills or core capabilities of those members who are replaced – it is all about their willingness to support the board’s efforts, be culturally aligned with the CEO and the board, and work together effectively.

GL: How can leaders turn a crisis into an opportunity to innovate the business? sib

MK: Innovation can come in different forms. It can be a disruptive innovation that changes the trajectory of the organisation. Or, it can be something as simple as the Krispy Kreme strategy – they had to figure out how to manage the costs, and everybody was made accountable for that. For example, an administrative assistant of the system was responsible for getting the cleaning done in a cost effective way. She went out and started to interview a variety of companies. Ultimately, she managed to cut the costs by 50%.

Krispy Kreme needed to determine how to grow, too. In fact, in the U.S. they were not allowed to open any more franchises since they had not filed their financial statements. Yet, they were able to innovate. They went outside of the U.S. and tried out different franchise experiences. Then, they imported the best practices back into the U.S. Essentially, they started from scratch and created a new business model that would be more effective in the longer term.

Another example comes from Harley Davidson. They had to manufacture their motorcycles in a more efficient and cost effective way. They also innovated an electric bike, which should come out in the next year or two.

Managing through a crisis is not just about surviving and stabilising the organisation. It is also about thriving and figuring out how to operate better and differently. Innovation as a crisis response is a critical part of the plan.

GL: Based on your last point, what should organisations and their leaders do to overcome a crisis?

MK: First, it is very important to find the right crisis leader and that may not be the CEO. In fact, many corporate executives don’t have the experience to navigate through a crisis. But, the rules of a crisis are totally different from running a business day to day: there is not perfect information, the media and social media are all around you, the organisation needs to make decisions quickly, and communicate crisply.

Organisations should consider having a crisis leader on board when putting together the executive team. Unfortunately, there are numerous examples of companies that just don’t handle a crisis well because their CEO and executive team are not ready.

Companies should also create opportunities for people to learn on the job. For example, by assigning them to a place where an incident has just happened and allowing them to learn from the recovery experience. In fact, organisations should go through a process of practice before a crisis hits.

GL: It is said that every company is a technology company today, meaning that technology is disrupting almost every industry in some shapes and forms. We are seeing the emergence of new ways of working, communicating and operating. Have you found this to be the case within the businesses of resilient leaders? rt

MK: Yes, the disruptive effect of technology is significant. Whether it is healthcare or agriculture, every sector has been impacted in some manner. For example, we all know the influence that AirBnb is having on hotel companies.

Today’s organisations need to be on top of understanding the trends that could disrupt their business. They must adjust their strategy to respond to that disruption. Otherwise, that could become a crisis down the turn. So, they need to get ahead of everything that is happening in the marketplace, especially from the technology perspective. They also need to be agile when something hits, for example by quickly changing the business model because a big competitor is coming in.

During a crisis, technology can be a very useful tool to get the company’s message out to a large group of people. But, there are situations when technology cannot be a total replacement for face-to-face communications. As we heard from Eric Pillmore, when employees at Tyco International lost trust in the company, executives had to get out of their offices. They took a plane and began road shows. In fact, they had to look people in the eyes. The same happened at Harley Davidson. Managers went out to talk to people at the manufacturing plants. They engaged them in straight talk.

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Pictures courtesy of Deloitte