58 Business The EconomistMarch 21st 2020
2Bartleby Embracing the suck
W
hen things are going well, it is
pretty easy being a business leader.
The economy is booming, orders are
rolling in and there are no tricky deci-
sions to make about staff or budgets. It is
still possible to screw things up, but a
rising tide tends to lift all yachts.
It is in a crisis that corporate helms-
men show their mettle. Employees will
be uncertain and will look to the leader
for direction. Sometimes, as with the
covid-19 pandemic, the problem will be
something few bosses can reasonably
have anticipated. Now they are expected
to chart a steady course in days.
In the political arena the obvious
examples of successful crisis leadership
are Franklin Roosevelt and Winston
Churchill. Both were somewhat erratic
decision-makers. But they made up for it
by being excellent communicators. Their
styles diverged, but the public had little
difficulty in understanding their core
message. Roosevelt made clear that he
was willing to try any combination of
new ideas in an attempt to end the de-
pression; Churchill was unambiguous
about the need for Britain to resist Nazi
Germany, whatever the cost.
Corporate leaders should resist the
temptation to give Churchillian speech-
es. But they have something to learn
from the calm authority of Roosevelt’s
“fireside chats”. As chief executive you
have to communicate a message to two
different audiences: your workforce and
your customers. That message should
demonstrate that the company has a plan
to deal with the virus. This may involve
staff working from home (to prevent the
spread of infection) or changes in the
supply chain (to maintain production).
Both staff and customers will also need
reassuring that the company has suffi-
cient financial resources to survive theeconomic downturn.
Jefferies, an investment bank, has just
provided a fine example. In a joint letter,
the chief executive, Rich Handler, and the
president, Brian Friedman, stressed that
“topmost on our minds is the safety of our
employees and our clients” before adding
that the firm “is flush with capital at both
the operating business level and our par-
ent company”. Other firms may not be so
lucky. But silence on such matters would
be dangerous.
For the broader strategy, tips can be
gleaned from the National Defence Uni-
versity (ndu), an American military col-
lege. In 2006 it produced a useful—and
prescient—report called “Weathering the
Storm: Leading Your Organisation
Through a Pandemic”. It advised leaders to
analyse the tasks required for an organisa-
tion to continue operating and prioritise
them. To ensure essential functions can be
performed, employees should be trained
in different disciplines. That way they can
cover for colleagues who become sick.
It helps to have done this in advance, of
course. But even firms that dithered can—besides making amends now—adopt the
right the tone. How you handle crisis
communication is, the ndu says, “criti-
cal”. It can matter as much as having the
right message.
This point is amplified by Shawn
Engbrecht, a former us Army ranger who
now runs a personal-protection com-
pany. He has written a highly entertain-
ing, if idiosyncratic, book entitled “In-
visible Leadership”. “As a leader,” he
cautions, “you can promise everything to
the many until you are unable to deliver
even a little to the few.” In the end, “Fail-
ure to tell the truth rapidly erodes trust
and confidence in higher command.”
In a crisis, Mr Engbrecht advocates
“embracing the suck”. This means accept-
ing where you are at a given moment:
“Wishing, hoping and praying the pro-
blem away does not work so don’t waste
your time with coulda, shoulda or
woulda.” In short, no sugarcoating. If
everyone on staff realises there is a pro-
blem, they will not be reassured by an
executive blithely promising that it may
go away.
A good manager must take time to
listen to staff concerns and answer their
questions. That may require a bit of
patience. In Mr Engbrecht’s words, “the
quieter you become, the more you can
hear”. Mass meetings may not be appro-
priate at a time of a highly infectious
disease. But an online town-hall gath-
ering would be salutary.
Have a clear message, keep calm and
be transparent: all obvious stuff, crisis or
no crisis. Another kind of leadership may
be more painful. Executives at airlines
like Qantas and United have agreed to
take pay cuts (or forgo their salaries
entirely) until the pandemic passes.
Good leaders show they face at least
some of the same dangers as their troops.Managers earn their money in a crisisbook is completely filled until June.
All manufacturers are ramping up pro-
duction. Getinge plans to make 16,000 un-
its this year, 60% more than in 2019. Most
of its rivals hope to increase output by a
similar amount. Italy’s army has sent 25
technical staff to Siare, its only domestic
producer, to try to quadruple production,
to 500 units a month. Mr Johnson’s govern-
ment sent 60 large manufacturers a blue-
print of a ventilator along with links to a
YouTube video and an academic paper de-
scribing a device that could be deployed
rapidly. OneBreath, a startup in California,is hoping regulators will fast-track approv-
al of its $4,000 design that could be ready
to produce in less than a year.
Getinge’s boss, Mattias Perjos, doubts
that the British prime minister’s plan will
work, at least in the short term. Ventilators
are not the most complicated pieces of ma-
chinery. But they are fiddly. It takes Getinge
two years on average to develop a new mod-
el. Even if regulators relaxed their approval
process—which can take another two
years—a carmaker will not learn to build
safe and effective medical gear overnight.
Even if specialist firms add productionlines to their factories, and non-specialists
reconfigure theirs, one other constraint re-
mains. Most components come from Chi-
na, where virus-related stoppages reduced
production of industrial equipment by
28% in January and February, year on year.
China is beginning to rev up its industrial
engine as new infections slow. But it will be
a while before its factories are fully back in
business. By the time they are, drastic mea-
sures that governments around the world
are taking to slow the virus’s spread may
leave ventilator-makers themselves with
less breathing room to function. 7