Business leaders often have to make dozens of decisions every day. Some of these will be simple, some complex, and others will present particular challenges, as many SME CEOs and MDs are finding during the current pandemic.
As parts of the UK enter a new phase toward economic recovery, it is natural for leaders under enormous to pressure to want to fix things as quickly as possible and take control. Rob Whittaker, Vistage Chair and Executive Mentor explains more.
“It is important not to act in haste. I always tell my Vistage business members to make sure the decisions they make today will stand the test of time. As a business leader, you want to be able to look back and feel you handled the situation in the best way you could, given the information you had, and according to your core values.”
“Naturally, nothing tests a company’s values more than a crisis. It’s also when having an authentic set of values matters more than ever. Mismanage the situation and you run the risk of upsetting your stakeholders, suppliers, customers and staff, and damaging your long-term reputation.”
Control the inner chimp
Every good decision in a crisis begins by calming the inner chimp.
When a crisis happens, your limbic system – that’s the part of the brain involved in behavioural and emotional responses – boots up. Professor Steve Peters calls this the chimp. The chimp is primarily designed to help us to get us out of physical danger, but as humans have evolved, the chimp’s role has grown unnecessarily. Nowadays, any perceived threat, not just physical, but perhaps to our livelihood or even our ego or status, can make our chimp hit the panic button. This can then lead us to make snap, fear-based judgements.
For business leaders and owners, that problem can be exacerbated by the inner chimps of your colleagues and other stakeholders also pressurising you to take immediate action.
Here’s a simple framework for making better decisions in a pressured environment:
- Stop, take a deep breath and remember your chimp is thinking and panicking about potential consequences/scenarios, not the actual situation right now, at this moment.
Then ask yourself and your team:
- Does this need a response right now? If the answer’s yes, which is very rarely, then take the best action you can. If not, pause – you have some time!
- What do we know for a fact about the situation? Is the information we have valid? What are the gaps in our knowledge?
- When do we need to decide on this?
- What additional information do we need?
- Who should we involve in gathering and analysing the information we need?
After you’ve controlled the chimp, you can begin to start a process of finding out the information you need to make better decisions. In a crisis such as Covid-19, this could involve setting up teams to manage specific areas, such as:
- Safety and wellbeing: What are our employees’ concerns, and how will we communicate to them that we’re taking steps?
- Cash flow: Have we got the cash to manage the crisis? Financial advisers may often suggest not paying suppliers and raking in customer cash, but not paying suppliers can damage the long-term sustainability of your business and conflict with your values.
- Communications: How will we ensure strong communications? Good communications can be a chance to demonstrate your strengths and resilience as a brand.
Good quality information is key to making better decisions, and what makes those decisions effective is testing those ideas in a safe and trusted environment. For instance, testing your choices within a peer group of experienced leaders without an agenda can be a useful way to learn before implementing your ideas.
There is understandably some anxiety at the moment, and SME leaders are keen to make up for lost business. However, it is essential to enter this new phase with a calm mind and an open perspective to make sure that the decisions made now are appropriate for future success.