Surprises are the new normal, and they are not fun. I was about to write a joyous paean to Earth Day and the glories of celebrating the great outdoors, when volcanic ash closed European airports. My flights to a global health summit were cancelled, making me cranky about nature instead. I had just returned from Brazil, where floods disrupted travel in Rio, and mudslides destroyed neighborhoods, following earthquakes in Chile and Haiti. But volcanic ash? Would any company’s scenario planners have imagined a blanket of gray silicate particles covering Europe?
We have enough to deal with in terms of financial crises, currency fluctuations, disruptive technologies, job restructurings, shortages of vital drugs, populist rebellions, possible pandemics, and terrorist threats without adding 2010’s devastating earthquakes and extraordinary weather events. Et tu, Mother Nature?
Coping with the unexpected is a leadership imperative. In every endeavor, the ability to recover quickly separates winners from losers, whether they are reacting to fumbles in a sports match or curve balls thrown by external events. I summarize the challenge of managing volatility in a simple equation: MTBS = or < MTMD. MTBS is the mean time between surprises, which is shrinking. MTMD is the mean time to make a decision, which better be fast.
Here are four strategies to speed response and minimize the impact of disruptions.
• Backup. Leaders should know the benefits of alternatives. Even if Plan B cannot always be rehearsed and ready to go, mental flexibility can prevent specifications and expectations from becoming rigid barriers to rapid redirection. Great innovators often pursue parallel development paths. Great companies stress efficiency but build in slack and cross-train their people, as Cemex does. Although the recession-stimulated tendency during the recession is to run tight, some overlap and redundancy makes it easier to respond quickly.
• Communication. Information must flow quickly and spread virally, whether through email or phone chains, Twitter alerts, or buddy systems. Social networks for which people feel responsible can align action quickly. Collecting and disseminating data in short cycles also increases the ability to turn fast.
• Collaboration. Human relationships, commitment, and resiliency help companies recover quickly. When people care about one another, have common goals, and feel empowered to act, they can master volatility and maintain high performance. In a major power outage that closed airports throughout the American Northeast in 2003 (until volcanic ash, the second worst disaster to hit airlines since the terrorist attacks of 2001), Continental Airlines employees were dedicated to their goal of on-time arrivals and their empowerment to do nearly anything except risk safety to achieve it. They developed numerous creative solutions to keep their planes flying while their competitors cancelled hundreds of flights.
• Values and principles. Clear standards and values can serve as a guidance system to steer decisions without sluggish bureaucracy. People know the right thing to do without being told and without waiting for permission. P&G was the first organization to evacuate employees (and their families) from Lebanon after military action; the regional general manager was certain that the costs would be supported, because of P&G’s values.
Similar strategies helped my colleagues deal with the volcanic ash fallout. When I reached the honcho for the global health summit about my cancelled flights, his European team was already in high resiliency mode preparing Plans B and C. He said, “Crises like this shows how innovative and creative we can be. It also allows us to show our character in service of our partners and constituents. Perhaps we can adjust schedules and open it up to a bigger audience.” They did.
Rosabeth Moss Kanter is a professor at Harvard Business School and the author of Confidence and SuperCorp. Connect with her on Facebook or at Twitter.com/RosabethKanter
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