A coffee Q&A with Helio Fred Garcia: the agony of decisions and the power of patterns in a crisis
Resilience Unfiltered Coffee Chat Series
Helio Fred Garcia and I met at the International Association of Business Communicators conference this summer where Fred was a keynote speaker. A professor in the New York University’s Stern School of Business and Columbia University’s graduate school of engineering, head of a New York-based consulting firm, counsellor and author, Fred is known for talking candidly about the ways crises challenge leaders – and the discipline and courage to make smart choices. In this Q&A, we chat about the power of patterns when stakes are high.
Natalia
Fred, one of your books is called “The Agony of Decision: Mental Readiness and Leadership in a Crisis.” In my experience, mental readiness is not something we hear a lot about in the offerings of the PR firms, which is the world I am coming from. Is there a gap in the preparation of leaders for high-stakes scenarios?
Fred
I came out of the PR firms, too. They can be really good at executing communications, but not necessarily helping leaders avoid wrong choices. And if you execute wrong choices, you are making the crisis worse.
The firm I run, Logos Consulting Group, is a management consulting firm. We counsel leaders on how to make smart choices under stress, and how to execute them in a way that maintains or restores trust. As a professor of management, leadership and communication at several universities, I tell my students that crises follow predictable patterns, and patterns have two kinds of power – explanatory and predictive. First, they help us make sense of what happened in the past. Second, they give us the power to predict what might play out in the future. Knowing the pattern, we can tell the leader that, if they do A, here’s the likely consequence. If they do B, here’s what they can expect. In a crisis, we know things are going to be bad. The leadership discipline is about finding the “less bad” outcome and then making choices that get you closer to that “less bad” outcome.
Natalia
In our earlier conversation, you said that, to put crisis management on the right track, it’s important to ask: "What problem are we trying to solve?" How do you get decision-makers to think clearly in the heat of the storm?
Fred
The best way to get leaders to make good choices in a crisis is to have a really thoughtful crisis planning process that defines a crisis and has a sequence of questions to ask. Here’s an example. A client approached me with what they called a “60 Minutes problem.” Their PR people defined it as a news media enquiry leading to an embarrassing story. I asked a series of questions about what was happening and ultimately told the client: “You don’t have a 60 Minutes problem.”
The company was discovered to have systematically cheated customers and was being sued for this. Essentially, lawyers were trying the case in the media. Hypothetically, it was possible to get 60 Minutes to walk away, but the lawyers would just give the story to the Wall Street Journal or someone else.
I told the client they needed to recognize several things:
a) The company had committed misconduct.
b) Their customers had been cheated.
c) As soon as this became public, the regulators would be all over them. They would sanction the company and might hand this over to criminal investigation.
So, I told the client they had a business problem.
My advice: stop the business practice that is dishonest and possibly illegal. Remediate the customers that were cheated. Fire those who allowed the practice to happen. Hire a high-quality auditing firm to monitor behaviour. Then take all this to the regulators and tell 60 Minutes that you’ve done all that.
The client was horrified that I was that candid, but the CEO and the board took my advice to heart and followed it. The regulators thanked them for bringing the issue to their attention, put investigators on the premises and ultimately sanctioned the firm. However, that outcome was far less severe than it could have been, and regulators commended the company for self-reporting. The story on 60 Minutes was still horrible. The customers talked about all the ways they had been cheated. However, the company’s side of the story was there, too: “We screwed up. We fixed it. We apologized. We self-reported to regulators. We are working closely with them.”
The bottom line is that every crisis is a business problem before it is a communication problem.
Similarly, every crisis is a business problem before it is a legal problem.
The United States is the most litigious country in the world. When the lawyers hear a company is or may be sued, they worry that anything you say will increase your liability in litigation. Here’s a paradox. If you can show that you take the issue seriously and are committed to fixing it, instead of creating legal liability, you are keeping the company healthy.
Here’s what I’d tell the CEO: “For what I know, you’ve gotten excellent legal advice. However, you don’t have a legal problem. You have a business problem. Whatever legal problem may emerge in the future, you have shareholders, employees and customers now, and you have the control of how they think about you. So please don’t make a legal decision. Make a business decision.”
When the lawyer says “you can’t say anything,” I believe what they actually mean is: “don’t say anything dumb.” We don’t want the company to say something dumb. Quite the opposite. We want it to say something smart and helpful. So, here’s how a series of questions with the lawyer might unfold.
I’d ask: “Can we acknowledge that we are aware of this problem?” The lawyer may say: “Yes, but we have to do it very carefully.” Great. We can very carefully acknowledge that we are aware of the issue.
Next question: “Can we express empathy for those who were disadvantaged by this?” The lawyer might say: “We can’t admit guilt.” Well, I am not asking to admit guilt. I am asking to express empathy. The lawyer’s response: “We have to do it very carefully.” Great. We can very carefully express empathy.
Next question: “Can we declare the values that drive us in this crisis?” It’s hard to say no to this – even though, in my experience, one lawyer did. After all, values are on the company’s website. The lawyer might again say: “We have to do it very carefully.”
Can we describe the process we have begun and will continue to get through the crisis? Yes – if we do it carefully.
Finally, can we make some form of commitment? Yes. It could be a procedural commitment, such as: “We’ll update you at 3:00 p.m.” or a substantive commitment, such as: “We’ll get to the bottom of this and we’ll fix it.”
These five questions are five elements of a well-structured stand-by statement. 1) Acknowledge the problem – or at least your awareness of it. 2) Express empathy. 3) Declare your values. 4) Say what you are doing to fix the problem. 5) Make a commitment.
Between self-defeating silence, which is what the lawyer is suggesting, and self-destructive blabbering, which is what the lawyer fears, there’s a lot of room to maneuver.
Natalia
It’s hard to disagree with this advice, and it’s wonderful when clients take it. When it comes to the issues around accountability, responsibility and guilt though, things are not always black and white. In a recent crisis training, we did content analysis of a number of statements from the companies reported to have experienced a cyber security breach. What we found was that the question of responsibility was not really addressed. There were no messages of apology or admission that the company may have done something wrong – for example, failed to have the right systems or detect red flags. The companies that issued these statements included technology and consulting category leaders that, presumably, the rest of us could learn from. Why is the reality of how companies end up communicating in a crisis often so different from what you or I may believe to be the right thing to do?
Fred
Under stress, it’s only human to engage in self-protective behaviour. The amygdala shuts down critical thinking. This is literally called the amygdala hijack. A lot of lawyers and PR people play into that self-protectiveness because they are more concerned with the leader feeling vulnerable than actually reducing the sources of that vulnerability. That’s why it’s so important to agree on the decision process before the heat of the crisis. The first step in this process is to name the problem. Without euphemisms.
In the book “The Agony of Decision: Mental Readiness and Leadership in a Crisis,” I talk about the United Airlines case of a passenger dragged off the plane. In my courses, I ask students to name the problem the airline was trying to solve. Some would say: “Well, we’ve got to get that crew on the plane to fly it back from Louisville to Chicago.” But what if the problem is defined differently – for example, “we need a crew in Louisville”? The solution could then be: “Locate a crew in or close to Louisville to fly the plane back in the morning.” The way you name the problem determines the solution that becomes available.
Natalia
Playing devil’s advocate, crisis teams may feel they need to resist a knee-jerk reaction – communicating before they collect the facts, verify conflicting claims, define the problem and formulate a responsible message.
Fred
True – but that mindset is wildly counter-productive. In the case of United, the whole world was talking about them before the company got a chance to define the problem. Then, the tweet went out saying: “This is an upsetting event to all of us here at United. I apologize for having to re-accommodate these customers.” “Re-accommodate” is a euphemism. Even worse, the tweet suggested that the team at United were having a bad day – as opposed to a passenger horribly injured while being dragged from the flight.
United could have put out a five-part statement I talked about earlier: “1) A passenger was badly injured while being removed from one of our planes. 2) Our hearts go out to the passenger, their family and other passengers who witnessed this. 3) The safety of our customers is our top concern. 4) We are beginning an immediate investigation. We will work closely with the Chicago aviation police and our staff to understand what happened to get to the bottom of this. 5) We will keep you updated as we learn more.”
You don’t have to know much to say that. But, under stress, the leader may feel they are the victim in the crisis and speak about themselves rather than the actual victims. Remember a former BP CEO Tony Hayward’s “I want my life back?” You need to snap the leader out of what my friend Jim Lukaszewski calls “victim confusion.” Here’s a question that forces clear thinking: what will reasonable people appropriately expect a responsible organization to do in this situation?
Natalia
In our earlier chat, you mentioned that the severity of a crisis does not determine its outcome. Can you share some examples?
Fred
In 2015, the government of South Korea asked me to go to an international conference in Seoul. After a ferry collapsed in heavy seas killing several hundred students and the mishandling of a Middle East Respiratory Syndrome (MERS) public health crisis almost brought the government down, they committed to not repeating the same mistakes and learning about best practices in crisis response. I was part of a team of four international experts to help them learn how to make and execute smart decisions in a crisis. I taught them a mini-version of my crisis management course.
The United States and South Korea had their first confirmed cases of COVID on the same day – January 20, 2020. South Korea started to immediately implement prevention guidelines. The Unites States never did. South Korea abided by masking, tracing, distancing, quarantining and crowd avoidance. The United States never did. One year later, one in every 42,000 Koreans – versus one in every 809 Americans – had died.
Here's another example.
In 2014, a Malaysia Airlines flight took off from Kuala Lampur. A new, modern, well-equipped plane. Soon, it was lost on the radar screen and presumed to have crashed.
Nine months later, an Air Asia plane took off from Jakarta. The same kind of plane. Also disappeared from the radar. Presumed to have crashed.
How did the airlines communicate about these tragedies? Malaysia Airlines tweets would just say a new statement was published and include a link.
In contrast, Air Asia’s CEO Tony Fernandes flew to the city closest to where the plane was lost, led search and rescue operations and, when it was concluded that all passengers had died, went to the location most passengers were from and personally broke the news to their families.
Most of the Malaysia Airlines passengers were from China. Malaysia Airlines notified their families about the horrible news via an iPhone text message in English.
Air Asia and Fernandes gained in respect. Their stock soared.
Malaysia Airlines stock plummeted. The company had to be bailed out by the government, which eventually took over the airline.
These cases teach us how different responses lead to dramatically different outcomes.
Natalia
We have a pattern of a human-centred versus a bureaucratic response here. Are there other patterns in the crises resolved with more positive outcomes?
Fred
Here are a few. Avoiding self-inflicted harm. Showing you care quickly. Doing what works as opposed to what doesn’t.
In an interview with the Guardian, a BP chief executive Tony Hayward claimed that “the Gulf of Mexico is a very big ocean. The amount of volume of oil and dispersant we are putting into it is tiny in relation to the total water volume.”
When the Roman Catholic church was discovered to have tolerated sexual abuse of children for more than 40 years, the Pope at the time told the New York Times that only one per cent of American priests do that.
These are examples of denying or diminishing the significance of the problem. This never works.
In my 45-hour crisis management course, we dive deep into dozens of patterns to learn from.
As I said earlier, patterns have explanatory and predictive power, and they also show that certain things that feel scary actually work. Looking at others doing the right things that seem scary, leaders can muster the courage to follow suit.
About 10 years ago, when a scandal broke in the Australian army involving sexual misconduct, the head of the Australian armed forces General David Morrison addressed the army: “If you can’t treat someone with dignity and respect, get out.” Morrison was later named the Australian of the year.
After the Charlottesville white supremacist rally in 2017, there were a number of racial incidents around the United States. In the United States Air Force Academy Preparatory School, black students found racist remarks on their dormitory message boards. After the general in charge of the academy saw the Australian video with General Morrison, he called the entire academy into a giant auditorium, asked everyone to take out their phones to record what he was about to say, and repeated Morrison’s words – if you can’t treat each other with dignity and respect, then get out. The trust in the armed forces remained high.
Natalia
Thank you for sharing these examples illustrating the power of patterns – and the importance of learning from the how-to and how-not-to stories in a crisis. Any final words before we wrap up?
Fred
Leaders are judged based on how they are dealing with their most difficult challenges. The question I ask my clients when they are hesitating is: “If you mishandle this, it’s going to be in the first paragraph of your obituary. Do you want this to be in the first paragraph of your obituary?” That gets their attention.
Natalia
Powerful. Thank you for this amazing discussion.
Natalia Smalyuk is an award-winning advisor and trainer with a focus on strategic communication, planning, stakeholder engagement and crisis leadership. She runs a Women Business Enterprise (WBE) certified consultancy called NBAU. What is NBAU? Not Business As Usual. Why NBAU? Because there’s no such thing as business as usual for leaders who think ahead and see a landscape of opportunity – and risk – across the unchartered global space.
Earlier chats in the Resilience Unfiltered Series:
A coffee Q&A with Christal Austin: climate emergency & disaster preparedness