In the wake of the most volatile quarter in the markets since 2011, CEOs and executives are struggling with how to stay on strategy, says The Miles Group (TMG). “One of the toughest things a CEO or executive can do today is stay focused and steady when the business is under stress,” says Stephen Miles of TMG, which advises Fortune 500 C-suites on leadership. “Something like a stock price dip can send the company into overreaction mode – trying to fix things that aren’t even broken.”
Uncertainty can cause even the strongest executives to react in negative ways. “2018 has brought enormous uncertainty around everything from trade policy to interest rates to energy prices,” says TMG’s Courtney Hamilton. “This causes wild fluctuations not only in markets, but in companies themselves, as they try to jump ahead of changes and second-guess strategy, usually with bad results.” Leading in a “wartime” full of uncertainty is very different from leading during a time of growth, says Hamilton. “As one CEO that we worked with said, ‘My very best peace-time advisor was my worst team member in a crisis.'”
During these times of stress and uncertainty, the TMG team has observed that there are three common toxic behaviors among executives that can derail a company. These emotional impulses not only are ineffective, but also magnify problems and affect all members of the management team:
Focusing on “process” vs. opportunism.
One of the most common stress responses is to get bogged down in the small details, slowing things down so that they move at a bureaucratic pace. “Getting bogged down in these less mission-critical process items just deflates the team and misses the opportunity to think creatively about solutions,” says TMG’s Matt Bedwell. “The executive may think that stomping on or calling out someone on, say, breaking the travel policy is being helpful and additive to the quest for a good outcome – when it’s just demoralizing to everyone.”
Being egocentric and deflecting blame.
Executives displaying this behavior during stressful times maneuver to ensure that one of their peers gets all of the scrutiny – effectively taking the heat off from themselves. They can become highly emotional and personalize every discussion, making the team totally ineffective in its pursuit of developing plans that will lead it out of the mess. “For CEOs, you must re-assess all members of your team to understand their capabilities in this new reality,” says Bedwell. “Unfortunately, you need to be ready for some of your highest performers to disappoint you.”
Going into panic mode and wanting to change everything.
When a high-performing business starts to underperform, the natural reaction is to panic and begin to examine and change everything. “People generally have good intent and want to be part of the solution, but in their quest to solve problems, they often start to change things that are perfectly good and do not need to be changed,” says Bedwell. “You cannot panic or get caught up in the flurry to ‘activate’ and start doing something.”
To combat these derailers, TMG advises CEOs to take on these leadership behaviors:
“Go slow to go fast.”
The “go slow” component means to step back and diagnose before activating on those things that require intervention – and not everything requires intervention. Ruthless focus and prioritization is equally important in a stress event; you cannot be overcome by your organization’s quest to “do things.”
Be the absorber.
Underperformance requires the CEO as a leader to be calm, cool, and collected, and “absorb” the stress and panic on the team. The CEO must then be the focuser, redirecting the energy to help everyone focus on the problem, the facts, the supporting data, and the proposed solutions. The moment a CEO panics, there is a 100X amplification into the company, and then people start to worry about the implications for them and are not focused on leading through the issues.
Remain fact-based and data-driven.
CEOs must ensure that someone is collecting the data and validating or refuting “gut instinct” and anecdotal information. CEOs should be careful not to be overly influenced by the best communicator or presenter on the team – or by the person he or she last spoke with. Being fact-based and data-driven will require CEOs to be consistently Socratic and seeking to understand with context.
“Moving from good times into much more difficult times challenges every executive, making it critically important for CEOs to adopt a different leadership style,” says Miles. “And as difficult becomes the norm, there will be greater need to adjust to how your talent is behaving in real time, and prioritize what’s needed to dig in rather than overreact.”
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