A crisis can come in many forms, and these days, you never know when the next one is coming around the bend. As author Shaun O’Callaghan points out, organizations are at risk from both internal and external crises. In his book, “Turnaround Leadership: Making Decisions, Rebuilding Trust and Delivering Results After a Crisis,” O’Callaghan provides readers with a straightforward, no-frills approach to the five essential skills that can guide an organization through the apprehensive weeks that follow a crisis. One of those skills is managing cash flow and the banks, but it can’t be all about the money if you expect to get through to the other side. O’Callaghan spoke with Smart Business about the nature of crisis leadership and why relationships are the key to survival.
Can you tell us about how you arrived at the five skills to recover from a crisis?
You have to balance out the promises you make to people. You have to make the right promises after a crisis, which is difficult because after a crisis it’s sometimes very hard to make promises to people about what’s going forward.
The second area is actually sometimes you need not to ‘just do it.’ There can be a tendency after a crisis to say, ‘C’mon, let’s just get on with it,’ but actually, sometimes you need to sit back. That’s what I talk about in terms of gathering new viewpoints. Because if you just listen to the same people that got you into the crisis, you’re unlikely to recover yourself afterward.
There are other core business skills (that) involve the third area: cost-base and sales. But the last two points, delivering results through relationships and rebuilding trust, those are the most important parts of a turnaround and a good recovery story. Unless you can bring the key players, the investors, your customers, your people and suppliers with you through that recovery phase, you might have thought out the best plan in the world. But it’s never going to get delivered.
Many businesses think that a crisis is the time for tough talk, but you point out the flaw in this thinking. Tell us how relationships can lead to results.
I can stare at my sales forecast for the whole year, and I’m not going to sell anything. So, you actually have to do something. The actions that a business takes are a reflection of what we as the leaders set up for that business. For me, the big question is: If what we set up previously led to a crisis, we’re going to have to set up something different this time around in terms of how the business operates, who it serves, its pricing, its strategies, its operations, its cost base. The question is: What could that be? What is the possible new vision for this business after it has been through a crisis?
You get to what the new possibility is by building the right new relationships inside and outside of your organization. In those relationships and the time that you spend with those people, you’ll come up with the ideas but you’ll also come up with the time that’s needed to implement them. When a bank or an investor sits down and decides whether they’re going to support your recovery plan going forward, you’re probably not going to be in the room. …
It’s scary but true. You’ll have had the meetings; you’ll have put your plans in, etc., but in a meeting that you never even attend, a decision will be made about whether a key stakeholder will support you going forward. If you haven’t put the effort into developing and maintaining the right relationships with the right people where you’ve had the time to explain the risks and the upside in an authentic manner, it’s a bit like playing roulette. You’re leaving a lot to chance as to whether or not your plan will get support.
