In this edition of Author Talks, McKinsey Global Publishing’s Raju Narisetti chats with Simmons University President Lynn Perry Wooten about her new book, The Prepared Leader: Emerge From Any Crisis More Resilient Than Before (Wharton School Press, September 2022), cowritten by Erika H. James, dean of the Wharton School of the University of Pennsylvania. Wooten has spent her career helping organizations turn critical situations into growth opportunities. Now, she’s sharing her blueprint for staying ahead of the next crisis. An edited version of the interview follows.
Do most CEOs usually become CEOs because they are good at managing crises?
The book is built upon this notion of the fourth “p”—beyond profits, planet, and people—which we call prepared leadership. We talk about profits, we talk about planet, and we talk about people. If you’ve become a CEO and you’re in the top percentile, you may ask, “Aren’t I already a prepared leader?”
I know from my decades of business education and working with CEOs that both in the classroom and outside the classroom, we’re very intentional people who know how to maximize profit, strategy, and management. We have classes on HR strategy and people, we talk about emotional intelligence and leadership, and in more recent times, we’ve talked about the planet and what it means to have a sustainable strategy. Most business school courses don’t have a segment on prepared leadership.
If you ask most CEOs what they did to get to their level, they’ll say, “I muddled through a crisis, but I don’t have a formula. I don’t have a theory. I don’t have knowledge of best practices.” Yes, the top CEOs have made it to their ranks because they were prepared leaders, and they were crisis leaders, but they don’t usually have a recipe—what they have is more tacit knowledge. This book gives them a road map. It has theory, practice, and case studies for what it means to lead in a crisis and be prepared.
Is resiliency a muscle CEOs can exercise?
What does it mean to have resiliency as a muscle? Just like we exercise for strength training, we exercise resiliency as an important leadership trait. Now I want to be real about this: resiliency is hard work. When a crisis hits, humans normally go into this defensive mode. We become reactive, we become defensive, and we start hoarding resources. We get paralysis. We don’t know what we want to do. We become clueless.
If we have this resiliency muscle, we won’t stay in that defensive, reactive mode for long. We will take a pause, and as a prepared leader, we will ask ourselves, “What do I need to learn? How do I make sense of what is happening in my world?”
If we have this resiliency muscle, we won’t stay in that defensive, reactive mode for long. We will take a pause, and as a prepared leader, we will ask ourselves, ‘What do I need to learn? How do I make sense of what is happening in my world?’
Sense-making entails multiple components. Leaders need to scan the outside world to understand what’s happening. Many times, it’s easy to scan and make sense because we’re not the first leader to have gone through a situation. We may look inside our organizations and do an internal scan to see what we need to learn. Data, expertise, and experience are important, and then building that team that will help us learn is also important.
Leaders also need a theory of change. They need to ask how they are going to get out of the crisis and what their theories of change are. That might include learning about scenario planning, dialogue, or case studies. After learning mode, resiliency requires us to ask, “How are we going to grow in this crisis situation? How can we seize the opportunity? What is that road map? What is that vision?”
The growth mode of resiliency is all about, “I want my organization to be better. I want to bounce back. I want to return to normal. I want to save the profits and the reputation and the organizational effectiveness, but I also want to be better when I’m resilient because of the learning, the growth, and the vision for the future.”
When we can combine growth and learning with a plan of action, this is that resiliency muscle. Doing it over and over again for every crisis and asking these questions helps us to be more resilient as CEOs.
Why should CEOs focus more on failures than on success stories?
A lot of my research has been about how people learn from failures and how people learn from exceptional performance. The two go hand in hand. Learning is the key. What can I learn in a crisis situation? What does excellence look like? What were the outliers?
Many times we gravitate to the notion of excellence or exceptional performance, but, in a crisis situation, we also have to understand how we can learn from failure. It’s that after-action review: What can we do better? Did we have failure because of the data? Did we have failure because of the service? Did we have failure to scan the environment? Did we have failure because of the decision-making process?
Many times we gravitate to the notion of excellence or exceptional performance, but, in a crisis situation, we also have to understand how we can learn from failure. It’s that after-action review: What can we do better?
It goes back to what I said earlier: part of being resilient is learning, and to learn from failure means that we understand that as humans we will fail, so we make psychologically safe spaces and realize that in learning from our failure, we can be better.
Why is NBA Commissioner Adam Silver a good illustration of a prepared leader?
This is one of my favorite examples from during the pandemic. So why was Adam Silver, the commissioner of the NBA, a good leader? Sports are dependent upon in-person experience and events being televised. Well, the world changed.
Adam Silver knew that we were not going to have in-person NBA games anymore and that he was going to have to shut down basketball, but then this bright idea came about: What if we create a bubble? We get all of our basketball players and the support staff to come down to Orlando, Florida, and we create this bubble that has safety protocols. The bubble ensures that we have a safe environment for our players, that we have the resources we need, and that we have a strategy to still be able to deliver basketball to our fans.
So what stuck out about him being a prepared leader? I believe he first had to take a pause. He had to make sense of the new world—the business of professional basketball was not going to be the normal basketball that we saw in 2019 or 2018—and then he had to ask, “How can we innovate in the middle of a crisis to still deliver value proposition for fans, for players, for franchise owners, for shareholders, for TV stations?”
This opportunity to innovate, to use technology in a different way, to create a different workspace, are all examples of going beyond people, profits, and the planet to be a prepared leader—in this case, to deliver basketball through the crisis.
To sum up why he’s one of my favorite prepared leaders: he was innovative, he had a vision in the middle of the crisis, he was resourceful, he was creative, and he brought multiple teams together in an ecosystem to deliver a crisis leadership strategy.
Why shouldn’t CEOs frame a crisis as a threat?
We see a crisis as a threat because it’s our defense mechanism to do so. As CEOs, we have to protect our organization, so it’s natural to see a crisis as a threat—but I want CEOs to see a crisis as not only a threat but also an opportunity.
Erika and I built our careers on thinking about crisis as an opportunity and how you can use it to make the organization better. Before the pandemic, people struggled with how to provide online education. People thought it would never be as good as in-person and that there were too many barriers, but when the crisis hit, we had to learn how to create a high-quality online experience.
As CEOs, we have to protect our organization, so it’s natural to see a crisis as a threat—but I want CEOs to see a crisis as not only a threat but also an opportunity.
I believe we are never going back to the classroom being fully in person. We’ll always use some form of hybrid learning, so the crisis was an opportunity for us to get better at delivering online education in the midst of this threat.
An example that’s even more near and dear to my heart is telemedicine. Many of us before the pandemic never thought we’d have an appointment with a physician on the telephone, over Zoom, or through some other form of technology. The medicine field could be very inefficient at appointment scheduling. Now telemedicine has become an opportunity to not only improve traditional doctors’ appointments but to also solve a lot of problems, such as health disparities and how you serve people who can’t leave their homes.
There have also been opportunities in supply chain management because of the pandemic era. In every crisis, I believe there’s an opportunity, and it starts with asking, “How do we reorganize people more efficiently and effectively? How do we better use technology? How do we pursue new markets? Where do we think about our mission and our vision?”
Looking for opportunities and not only thinking about the crisis as a threat is so essential to what Erika and I write about in the book.
Don’t CEOs need to err on the side of speed in a crisis?
This goes back to how CEOs have to be agile in their leadership position, especially when they are trying to be a prepared leader. Every crisis is time-sensitive, so the first thing you need is quick, urgent decision making. The CEO has to decide, “How much time do I have?” And given that time, “How do I build the winning team?”
Make sure you understand the timeframe and then build the winning team. Beyond that, you also have to make the timeframe clear to your team. Say to your team, “This is the time we have. We have 60 minutes to make a decision, so what are we going to do quickly in 60 minutes? What’s our recipe? What’s our checklist?” These are the important things: the pros and cons of each situation, the reputational effects, the financial implications.
When you start getting to 45 minutes ask yourself, “How do we urgently make a decision that can benefit the majority of stakeholders?” The trade-off is balancing your time with what the team can do in that short amount of time.
In certain situations—if the CEO is grounded in the team, is constantly scanning the environment, and is listening to insiders and outsiders—the CEO can make the decision without consulting the team because the CEO knows where the value proposition is and what’s going to work.
How do we address chronic unresolved issues while we lurch from crisis to crisis?
We have been in constant crisis mode the last couple of years: supply chain, inflation, pandemic. At times, we’ve forgotten the importance of diversity, equity, inclusion, and social justice.
The NBA example that we talk about in the book focuses on how the league managed the pandemic era and created that bubble. In the midst of that bubble the Milwaukee Bucks said, “We’re not playing today,” after the shooting of Jacob Blake in Kenosha, Wisconsin. They decided to call a work stoppage because of diversity issues and Black Lives Matter. That work stoppage was a crisis within a crisis and it made the NBA say, “We have to manage the pandemic, but we also have to manage diversity.”
As CEOs, if we ignore diversity and put it aside when we manage all the other crises, it’s just going to bubble up. So what does that mean? It means we have to focus on all of these crises. We have to have people in the organization asking what’s happening in the economy and with the pandemic, but alongside that, we have to have what I call the diversity scorecard: Are we bringing the right people into our organization?
When we look at our stakeholder base, are we serving our clients in a way where they all feel included and like they belong? Are we building bridges across multiple communities even while we lead in this pandemic era? When we look at our employee base, who’s missing? What capabilities are we cultivating in this new world as it relates to diversity, equity, and inclusion?
If you look at the workforce now and why we have an HR crisis, in some ways it’s because people ignore diversity.
Some of the things that Erika and I have been talking about, for example, are the aging workforce and the aging society in general. That’s a diversity, equity, and inclusion issue. If you look at the workforce now and why we have an HR crisis, in some ways it’s because people ignore diversity.
We didn’t prepare for what was going to happen when the workforce started to age. We didn’t prepare for what was going to happen when women started to drop out of the workforce. We didn’t prepare for people from underresourced and underrepresented backgrounds to join the workforce. Now we have an HR crisis. When we neglect diversity, equity, and inclusion, it’s a bigger problem than the initial crisis we started with.
Lynn Perry Wooten on how to stay ahead of the next crisis