B8| Saturday/Sunday, March 14 - 15, 2020 ** THE WALL STREET JOURNAL.
EXCHANGE
ample, its leadership might mobi-
lize a backup team to handle the
overflow. The problem, as Mr.
Heath explains, is that once these
emergency-response teams exist,
they tend to self-perpetuate. If
calming irate customers is your
job, your primary motive is calm-
ing them successfully. You have no
incentive to figure out how to stop
them from calling.
“We usually define heroes as
people who save the day,” Mr.
Heath told me. “We talk about
firefighters and first responders.
But what about all the people who
keep the day from needing to be
saved? Their work is often invisi-
ble and they don’t get the glory.”
The upside of being a manager
is that it’s much easier to be per-
ceived as heroic. The downside, of
course, is that you’re confined to a
cycle in which every crisis you
tackle is followed by a long period
of neglect that inevitably worsens
the next crisis. In the case of
Covid-19, any lack of organiza-
tional preparation is unforgivable.
The threat of a global pandemictimes like these. Right now, while
the CEO is stuck in board meetings,
steering committees, audits and
product reviews, her employees are
seeing masked people all around
them; her contract workers are get-
ting cancellation notices from their
kids’ sports leagues; her top execu-
tives are watching 401(k) balances
sink; and her customers are reading
headlines about President Trump’s
Europe travel ban.
Mr. Paliwal’s Harman is not at
the center of the pandemic. It
doesn’t make protective gear or
cleaning solutions; hasn’t been hit
by an internal outbreak; doesn’t
stand to lose billions due to can-
cellations or missed shipments.
Harman, owned by Samsung
Electronics Co., matters as a proxy
for every business that plays a role
in keeping us afloat. It sells $25 mil-
lion worth of car infotainment sys-
tems, audio equipment and services
every day—its success or failure
puts bread on the table for 30,000
people working in factories, office
buildings, design labs and engineer-
ing centers all over the planet.
Mr. Paliwal can’t ignore the
email from a worker in Germany,
for instance, who is concerned
that getting on a bus to get to
work may be unsafe. The CEO un-
derstands the concern, but after a
dozen years at Harman’s helm, he
knows well that you can’t manu-
facture stuff at home. Even as of-
fice employees are now allowed to
work from home, factory employ-
ees need to show up at Harman’s
sprawling collection of plants
world-wide.
Mr. Paliwal says the most im-
portant thing his employees, sup-
pliers, investors and distributors
need to see is him showing up for
work every day, whether it be in
person or virtually.ing there on corporate jets.
For every CEO asleep at the
wheel, there are those who seem
wide awake. Ford Motor Co. Chair-
man and onetime CEO Bill Ford de-
fined his legacy in 1999 after show-
ing up to the historic Rouge factory
in the hours after a fatal explosion.
Television cameras focused in on
his youthful face as he uttered the
simple statement that this was “the
worst day of my life.”
In January 2013, I flew to Sta-
vanger, Norway, to attend a press
conference held by Statoil ASA CEO
Helge Lund. Some of the company’s
workers had been taken hostage and
were later killed by terrorists who
attacked a natural-gas plant in Alge-
ria. Mr. Lund—frustrated by the lack
of immediate answers—became a
spokesman for the outrage and ag-
ony the attack reawakened in Nor-
weigians scarred by right-wing ex-
tremist Anders Breivik’s massacre of
77 people near Oslo.
Over the following days, Mr.
Lund was omnipresent. He would
deliver bad news, advocate for bet-
ter security, and criticize his own
company’s overreliance on local
military personnel to safeguard
strategic facilities.
On Tuesday morning, shortly be-
fore my interview with Mr. Paliwal, I
listened in to American Airlines
Group Inc. CEO Doug Parker address
an industry conference. Southwest
Airlines CEO Gary Kelly had earlier
equated a decline in plane bookings
with the fear-driven response to
9/11, and I wondered if his rival had
more to say about it.
Mr. Parker skipped over the
consumer hysteria issue and dis-
played the type of coach’s de-
meanor we crave in the face of
adversity.
“While much of our country
seems frozen with fear, the Ameri-
can Airlines team is putting on their
uniforms every day,” he said. “It’s
thanks to them and their colleagues
at other competitive airlines that
our country is still moving.”
This made me feel good because
I want those American Airlines at-
tendants to be well led and well
cared for. Why? Because I expect
them to have a posture similar to
the boss.
Even if the guy serving you cof-
fee or a woman demonstrating
how to click a seatbelt has butter-
flies in their stomach, customers
like me don’t want to see them.For CEOs,This Crisis Means
It’s Time to Step Up
Corporate leaders will be tested in the days and weeks ahead
Two months ago, ON BUSINESS|JOHN D. STOLL
the Conference
Board unveiled a
study that listed the
reasons corporate
bigwigs were anxious
heading into 2020.
Trade wars, talent shortages, geo-
politics, climate change, disruption
and cybersecurity were keeping
CEOs up at night.
No one predicted a then-myste-
rious new coronavirus would crip-
ple global business with a force ri-
valing the 9/11 terrorist attacks or
2008 financial crisis. In the early
days, the outbreak was widely
seen as a relatively isolated threat
capable of screwing up supply
chains or sinking sales in China.
The pandemic now occupies
center stage, and corporate deci-
sion makers like Harman Chief Ex-
ecutive Dinesh Paliwal are search-
ing for the balance between
preparedness and panic. On Tues-
day, during a twice-weekly corona-
virus steering committee meeting,
the CEO issued this advice to top
lieutenants: “Don’t freak out.”
Sitting in a Manhattan conference
room after that committee meeting
ended, the 62-year-old told me, “you
can have butterflies in your stom-
ach, but don’t let your employees
know about them.” Topping the list
of things he learned on the job
rather than business school is “not
to scare the hell out of people.”
Later in the week, in an email
exchange, Mr. Paliwal outlined
how difficult it is to practice what
he preached in this “highly dy-
namic situation.” A manager needs
to put employee safety first, he
says, even while trying to keep
customers happy. You can’t take a
blanket approach, and you have to
take a lot of cues from the Centers
for Disease Control and Prevention
and other organizations. By Fri-
day, the company offered the op-
tion to work from home to all its
office workers.
Mr. Paliwal learned the art of
crisis management a decade ago,
when—early in his tenure—the au-
tomotive industry Harman relies on
for a big chunk of revenue col-
lapsed and many suppliers faced li-
quidity crunches that threatened
their survival.
The “don’t freak out” mantra
could be criticized as being too pas-
sive in the face of this global crisis,
but it should be a golden rule inSome CEOs have no choice now
but to choose the virtual option.
On Thursday, the CEO of London-
based BT Group PLC, Philip Jan-
sen, self-isolated after testing pos-
itive for the new coronavirus. He
will lead the company remotely.
Other U.K. telecom chiefs will fol-
low suit on isolating because they
came into contact with Mr. Jansen
at a meeting this past week.
Crises teach us that CEOs aren’texpected to be as right as they are
expected to be engaged.
James Cayne, the chief executive
who presided over Bear Stearns’
collapse, will forever be marked by
stories about his decision to spend
time golfing or playing bridge while
the 85-year-old investment bank de-
teriorated. When the CEOs of De-
troit’s big auto makers visited Con-
gress asking for bailout money,
lawmakers ripped them for travel-In a crisis, Harman CEO Dinesh Paliwal says, ‘you can have butterflies in
your stomach, but don’t let your employees know about them.’ALEX WONG/GETTY IMAGESTwo friends are sitting by a
river when they spot a child
drowning in the water. Both
friends immediately dive in and
pull the child to safety. But as
soon as they do, another strug-
gling child drifts into view. Then
another. Then another. After com-
pleting several rescues, one of
them climbs out of the water.
“Where are you going?” the
other friend asks.
“I’m going upstream to tackle
the guy who’s throwing all these
kids in the water.”
I first saw this parable in an ad-
vance copy of Dan Heath’s recently
published book, “Upstream: The
Quest to Solve Problems Before
They Happen.” (Full disclosure: my
wife is Mr. Heath’s agent.) One of
the book’s recurring themes is that
most leaders, when preparing for
disasters, focus their efforts on
creating systems to manage the
fallout. In other words, they attack
the symptoms rather than the
problem itself.
If a company is being inundated
with customer-service calls, for ex-contraflow saved their lives. As
Mr. Heath put it: “How do you
prove when something did not
happen?”
Relentless competence can
backfire, too. Some public-health
officials have said that if they do
their jobs well and nothing bad
happens, their departments are
sometimes targeted for budget
cuts. In business, some upstream
thinkers have complained that
when a company runs smoothly,
some people start to think it’s not
assuming enough risk.
When it comes to major catas-
trophes like Covid-19, genuine
leaders often encounter another
problem. The plans and protocols
they’ve developed for these disas-
ters have been left to gather dust,
right next to a box of expired hand
sanitizer. It’s one thing to formu-
late a brilliant plan. Implementing
it under pressure is another story.
The best advice that I’ve heard
comes from Dr. Jeffrey Freeman, a
disaster response expert from the
Johns Hopkins Applied Physics
Laboratory. In something as seri-
ous as a pandemic, he told me,
people involved in the response
have limited time and resources.
“They need to use what they know
and trust,” he says. If they’ve
never used a new technology or
special crisis protocol before, he
said, there’s virtually no chance
they’ll use it in the fog of war.
The best strategy is to figure
out how to incorporate these di-
saster systems into the regular
daily workflow—or as he puts it,
to give them “day jobs.”
If nothing else, I hope this pan-
demic will help organizations ap-
preciate the difference between
leaders and managers and start
learning how to identify them.
There are two occasions when
most organizations assess their
bosses: times of success and times
of crisis. But these are exactly the
wrong moments to do so. What’s
really important is what the leader
does during the quiet moments in
between. Leaders reveal them-
selves through a series of small,
precautionary moves.
I understand why managers
make comfortable hires. They have
saved the day before and people
will trust them to do it again. Great
leaders, by contrast, can come
across as nags or neurotics. Frankly,
their tenures might seem dull.
These days, dull sounds pretty
good to me.Mr. Walker, a former reporter and
editor at The Wall Street Journal,
is the author of “The Captain
Class: A New Theory of
Leadership” (Random House).Virus Lesson:
Managers but
No Leaders
has loomed for years.
Mr. Heath cites several exam-
ples of leaders engaging in “up-
stream thinking.”
He mentions an IBM system
that uses artificial intelligence to
predict when elevators are likely
to break down, so technicians can
be dispatched before they do. He
describes how Northwell Health, a
New York hospital system, cut
emergency response times by ana-lyzing 911 call data and deploying
its ambulances to “hot spots”
where emergencies tend to hap-
pen. If calls from a nursing home
tend to come in at lunchtime, for
example, they might have a ready-
to-go ambulance parked at a
Wendy’s down the block.
In 2005, when Hurricane Ka-
trina leveled New Orleans, there
was one bright spot in the other-
wise abysmal response. Officials
had been experimenting with “con-
traflow,” an elaborate process in
which interstate traffic is rerouted
to flow in one direction. Before
Katrina hit, they’d honed the sys-
tem enough to keep it rolling for
25 hours, allowing thousands to
evacuate. While an estimated 1,700
people died, it could have been
much worse: Simulations of a Ka-
trina-like storm had predicted
60,000 fatalities.
One problem with upstream
leadership is the difficulty of grad-
ing it. You can’t assemble a panel
of grateful people who didn’t get
stuck in an elevator, or would have
died if an ambulance arrived 90
seconds later, or will testify thatWhat’s really important
is what’s done during
the quiet moments in
between crises.I look forward to that. Dark sto-
ries need heroes, too. But if the
worst disease outbreak in modern
history teaches us only one lesson,
let it be this: No matter how it
plays out, the global response to
this pandemic will never be any-
thing more than a case study in
crisis management. It has already
failed the fundamental tests of
leadership.
Leadership is what prevents a
pandemic.
Managers, as a species, operate
at a lower order of difficulty. They
operate best in situations where
the threat is specific and the
stakes are obvious to everyone. In
a crisis like this one, managers
thrive by making smart, incremen-
tal decisions under pressure.
Great leaders are capable man-
agers, too—the difference is how
they approach the tranquil peri-
ods. No matter how well things
seem to be going, they continue to
work relentlessly. They peer
around corners to anticipate the
next unprecedented challenge,
good or bad, and aren’t afraid to
push their teams to prepare for
these extreme scenarios.
If extraordinary leaders had car-
ried the day, this pandemic
wouldn’t produce any heroes. It
simply never would have hap-
pened.
Last year, before this virus be-
gan to spread, I learned about a
parable that’s well-known in pub-
lic-health circles. It goes some-
thing like this:Continued from page B1ROBERT NEUBECKER