Embrace (and Expect) the Clutch

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Think of the current economic crisis in terms of an acute myocardial infarction. The patient is rushed to the hospital, where he is stabilized and recanalized, but it is not over (it is never over), as thoughts turn to preventing the next attack and the patient initiates a lifetime gambit to alter lifestyle patterns. This is the premise of Heifetz et al¹ in an article that appeared in the July–August 2009 issue of the Harvard Business Review. In “Leadership in a (Permanent) Crisis,” the authors write that intensifying global competition, energy constraints, climate change, and political instability will set the stage for a prolonged, and possibly permanent, sequence of critical new challenges; leading during a sustained crisis is treacherous.

The authors divide crisis leadership into two phases, and they spend scant time on the emergency phase, in which the leader’s priorities are to stabilize and buy time. “Second is the adaptive phase, when you tackle the underlying causes of the crisis and build the capacity to thrive in a new reality,” they write. Because leaders will feel tremendous pressure to relieve anxieties by reacting with authoritative certainty, this is the tricky stage. The way forward is not obvious, yet the leader still must lead.

Ignore the instinct to hunker down and solve the problem with short-term fixes such as tightened controls, across-the-board cuts, and restructuring plans, the authors urge readers. “The organizational adaptability required to meet a relentless succession of challenges is beyond anyone’s current expertise,” they write.

Invite Change

Today’s leadership challenge is to execute current business while simultaneously fostering change, which the authors describe as developing next practices. A great example of this is the influence of Julie Gilbert, former vice president and then senior vice president at Best Buy from 2000 to 2009. Gilbert perceived a coming disaster in the company’s failure to recognize the growing influence of women in consumer-electronics buying and failure to include them in the purchase.

She led an initiative to develop in-store boutiques that mixed home-theater components with furniture and accessories, reoriented the sales force to include the female when a man and a women entered together, persuaded senior executives always to include a woman in strategic decision making, and created Women’s Leadership Forums, or WoLF, in which women at all employment levels came together to collaborate on new initiatives.

Gilbert has since moved on to help other companies set up like programs, but while at Best Buy, she embodied the practices of adaptive leadership: confronting loyalty to the legacy practice of selling products to men; distinguishing the essential from the expendable in urging the inclusion of at least one woman in ritual senior-leadership retreats; and running numerous experiments in order to ferret out better products and processes, as opposed to giving slavish attention to a grand plan.

An Off-kilter Environment

The authors recognize that health care is a microcosm of the turmoil facing the entire economy, and they put forth Paul Levy, CEO, Beth Israel Deaconess Medical Center, Boston, Massachusetts, as a prime example of a leader who successfully orchestrates conflict, chaos, and confusion so that the turbulence is productive instead of destructive.

Beth Israel was on the ropes when Levy took over in 2002. The product of a merger between two Harvard teaching hospitals, the medical center never fully integrated the two cultures, was bleeding red ink, and was a likely target of a takeover by a nonprofit entity. After stabilizing the financial situation, Levy set about creating discomfort. In a hospital-wide memo, he stated, in no uncertain terms, that the status quo would result in disaster. He publicly challenged powerful medical factions in the hospital, and he announced a zero-tolerance policy for clashes between the two cultures.

While Levy achieved some stability from initial achievements, he knew that he had to keep the heat on so that the hospital would be positioned to adapt to the changes that lay ahead. “Keeping an organization in a productive zone of disequilibrium is a delicate task; in the practice of leadership, you must keep your hand on the thermostat,” the authors write. If the heat is too low, people will not feel the need to ask uncomfortable questions or make difficult decisions; if it’s too high, people may panic or