In 2008, an interesting paper was published by a team of Israeli scientists on what was the best strategy for a goalkeeper when facing a penalty kick. (Action Bias Among Elite Soccer Goalkeepers: The Case of Penalty Kicks, Michael Bar-Eli, Ofer H Azar 2008) The research team analysed 286 penalty kicks and found that 94 per cent of the time goalies dived to the right or left — even though the data showed that their best chance of stopping the ball was when they stayed put in the centre. Then why this urge to dive. The theory was that the goalies wanted to avoid looking un-heroic or coming across as taking no action.
As Michael Bar-Eli one of the authors of the study put it: “They want to show that they’re doing something. Otherwise, they look helpless, like they don’t know what to do.” We see the same thing often happen in super overs when cricketers try unorthodox shots and completely miss the ball or mistime it. A standard ‘boring’ cricketing shot would most likely have fetched the team more runs. The same thing happens in business too when a crisis hits. Leaders are tempted to do something that looks impressive, that looks like they are doing something fancifully different. More often than not leaders should resist this temptation.
Data-driven decisions
Paul Polman, Chairman, Unilever
Follow the data not the distractions. One of the biggest mistakes that leaders make in a crisis is to stop watching the data. They get caught up in the ‘crisis-fever’ and the pressure to showcase an image of the ‘impressive general completely in charge.’ This leads to daft decision making. Does the crisis call for a change in strategy or is merely a tweak required? Does the crisis point to fundamentals going wrong or is it just alert flags that point to poor execution? As Paul Polman, former Chairman of Unilever put it — “Our strategy is execution.” Distractions are the enemy of great execution.
Somebody talks about an interesting anecdote, someone else talks about an idea that worked extremely well at a competitor, someone else says his gut is telling him that a new direction is needed. In the middle of all this noise, the leader has to stay focused on the signal — she has to ask, what does the data say? Are we asking the right questions of the data? Are we interpreting the data right? Are we drawing the right insights? It is these hard questions that yank the team’s attention back to what is important and prevents a meandering of energy and resources.
In an earlier article , we’d discussed the cricketing comparison between Rahul Dravid and Virendar Sehwag. Sehwag plays and looks the part for the high-pressure version of the game — T20. But the data shows that Dravid is the better T20 player with an average 41 per cent better than Sehwag’s! It is the leader’s responsibility to back the data-driven decision even at the risk of turning down the more appealing alternative. The upsurge in Covid cases in the last few weeks has showed the importance of staying focused on the basics. Instead as messaging and chest-thumping took precedence over the ‘boring basics’ the pandemic came swinging back with a vengeance.
No gimmicks needed
Less is more. Business leaders sometimes unleash a range of initiatives to make a show of new leadership, dramatically diversify a product range to deal with a crisis of stagnating growth. It is the rare business and business leader with the courage to say that ‘less is more.’
Apple CEO Tim Cook
One of the best business examples of this is Apple. As Tim Cook captured it in 2010: “We are the most focused company that I know of or have read of or have any knowledge of. We say no to good ideas every day. We say no to great ideas in order to keep the amount of things we focus on very small in number so that we can put enormous energy behind the ones we do choose. The table each of you is sitting at today, you could probably put every product on it that Apple makes, yet Apple’s revenue last year was $40 billion.”
In their book, The 4 Disciplines of Execution, authors Chris McChesney, Sean Covey, Jim Huling, Rajan Kaicker 2012, mentions working with a manufacturer that competed directly with Apple’s iPhone. The leader responsible for creating a new interface to compete with the iPhone was shaking his head in part frustration, part disbelief: “It’s really not fair. Between our domestic and international operations, we make over forty different phones. They only make one.” As Roman philosopher Seneca would say, “To be everywhere is to be nowhere.” Leaders must learn to cut the fat, eliminate the adventures of diversification when they no longer make sense and focus the organisation on the ‘significant few.’
Citibank’s new CEO Jane Fraser seemed to have this in mind when she took the difficult and unpopular decision to exit consumer banking across 13 markets including India. “While the 13 markets have excellent businesses, we don’t have the scale we need to compete. We believe our capital; investment dollars and other resources will be better deployed against higher returning opportunities in wealth management and our institutional businesses in Asia.” A brutally honest assessment and a rigorous display of less is more.
Staying focussed
Focus on what works rather than what looks good. Insecure leaders worry more about the optics. Their focus is more on how they come across, the impression they are creating, their personal brand. This takes the focus off genuine problem solving and crisis management. Instead, leaders must focus on what works.
One of my dear friends and extremely successful entrepreneurs found his company facing an existential crisis as Covid impacted their whole business. They turned to the humble Covid mask — an extremely boring product compared to the spectacular and cool range that usually dominates their offerings. And yet the mask is what saved the business, brought in cash flow and kept employees in their jobs. This ability to ask, ‘what will work? what is required now?’ needs tremendous leadership courage and will, because the team will tend to follow what looks better and what will play well in PR. The leader needs to prize results over reviews and rally the team around the crisis management strategy that works.
A crisis is a time when leaders tend to go all scatter-gun, firing off multiple strategies sometimes out of desperation, sometimes out of hope that one will work. It needs the cool and calm leader to ignore the side roads and stay focused on the road that leads the team home.
As philosopher Søren Kierkegaard put it beautifully when he described purity of heart as the capacity to will one thing. Boring can be beautiful.