“This is no unsolvable problem if we face it wisely and courageously.”
or, how embracing risk in times of crisis can transform uncertainty into innovation and growth for you and your business.
I don’t think this is being said enough: This crisis will end. All crises do.
In FDR’s first inaugural, the president addressed an angry and divided nation:
“Only a foolish optimist can deny the dark realities of the moment. Our greatest primary task is to put people to work. This is no unsolvable problem if we face it wisely and courageously. There are many ways in which it can be helped, but it can never be helped merely by talking about it.”
In the four months between FDR’s election and his inaugural, the US economy had plummeted to its lowest point ever. There were food lines in every city and mobs of angry farmers in the countryside. People were scared of losing their jobs, their homes, and their families.
People were scared of tomorrow.
The remedies to the Great Depression were manifold. But one of the things they all had in common was the acknowledgement of a reality beyond the unpredictable crisis. They aimed for a world after the crisis and reframed an uncertain situation in risk-and-reward language most Americans understood. And more importantly, they reframed how the institutions of government and business operated.
So let’s reframe the current health and economic crises. And how we get to the other side. Because no one ever climbed a mountain in one step and no one will navigate this crisis by doing just one thing.
Step 1: Face this crisis wisely.
“Only a foolish optimist can deny the dark realities of the moment...”
– Franklin D. Roosevelt’s First inaugural, March 4, 1933
War. Depression. Pandemic. These events challenge our ability to comprehend our situation and make wise decisions at both macro and micro levels—in society at large and in our homes and workplaces.
To face down these circumstances we have to know the difference between risk and uncertainty. The difference between situations where you have a sense of the possible outcomes and situations where you don’t. And how to reframe your personal or business challenges to see through uncertainty to the future.
Uncertainty’s a b*tch.
Part of what makes the coronavirus crisis so hard to wrap our minds around is its inherent uncertainty.
Some of this uncertainty comes from the newness of the situation and its culprit: The unknown facts of the virus, how it will respond to containment, and how long we’ll have to modify our lives and our economy to fend it off. Much uncertainty also comes from confusion and contradicting information at the top: about testing; about websites that don’t exist; about imminent vaccines, hearsay treatments, and expedited FDA-approved therapies. About a declining number of cases and “almost air-tight” containment. About a great time to buy stocks.
This lack of information and control triggers the ancient fight/flight/freeze instinct in our brains. And this isn’t necessarily a misplaced impulse. For many, crisis-oriented short-term thinking leads to necessary precautions and quick reactions. For others, they buy too much toilet paper.
Uncertainly is always there, but in crises it dominates. People and organizations focus on what they can control in times that feel out of control: limiting budgets, limiting movement, limiting outreach. And many organizations will see a return on capital in their retreat.
But this is short-term thinking.
Risk is the new black.
We’re used to assessing risk.
Every time we pitch a project or ask someone out on a date or spend a few bucks on a movie, we’re wagering what we have against a series of possible outcomes—one or more of which we’re confident the odds will deliver. Because the outcome is worth the risk. And in many cases (the date cum marriage, the project cum account, the movie cum fandom) we’re in it for the long game.
The emergence of a crisis situation—be it economic, political, or societal—does not need to upend long-term strategic objectives. If anything, it plays to the fortunes of organizations that embrace risk. Because every organization that retreats to save their share sacrifices growth when the crisis has passed. Meanwhile, the opportunities for long-sighted people and organizations to innovate and grow multiply.
History is full of stories of companies that gambled in uncertain times and won by having confidence in the long game—in the light at the end of the tunnel. During the Great Depression, Chrysler invested heavily in a new low-end brand, Plymouth, and overtook Ford as the second-largest automaker in the US. Kraft introduced Miracle Whip at the same time and become America’s best-selling dressing after only six months. Texas Instruments introduced the transistor radio during a recession in the 1950s. Apple introduced the iPod during the 9/11 recession.
It’s not that these companies were invulnerable to their relative crises in a way their competitors weren’t. And, to be sure, a great many companies risked their all and failed while these few succeeded.
Rather, what these companies have in common—like FDR’s Depression-era relief efforts—was the strategic reframing of risk. The privilege of accepting an uncertain period between now and the desired outcome for which they were willing to risk. A commitment to a long-term strategy that looks past the crisis at hand.
Whether or not we confront tomorrow by acknowledging its inherent risks or are paralyzed by its terrible uncertainty, is a choice. Because the truth is — in almost every case — the menaces of war, depression, and pandemic are always there.
We just don't know. But we keep moving forward anyway.
Step 2: Face this crisis courageously.
“…There are many ways in which it can be helped, but it can never be helped merely by talking about it.”
– Franklin D. Roosevelt’s First inaugural, March 4, 1933
We’ve reframed how we think about risk. Now let’s reframe how we actually operate.
In periods of crisis, businesses lose customers and resources, people lose jobs and homes, and everyone loses money and confidence. This isn’t unusual. In fact, it happens all the time at the micro level. In families, social organizations, and businesses ranging from startups to Fortune 500s, teams come together and break apart all the time.
In the 1960s, Bruce Tuckman published the “forming–storming–norming–performing–adjourning” model to describe the cyclical nature of groups and teams. At the micro human-centric level, this model describes:
- Forming. A team comes together—some members are new, some established—to tackle a new problem or a new situation. This phase is often chaotic, exhibits myriad work styles, and lacks unity of action.
- Storming. The group starts to align and trust one another. Disagreements and conflicts are managed through hierarchy and authority.
- Norming. Co-operation is achieved. Detractors have been removed.
- Performing. Consistency of performance is achieved. The team is largely self-managing.
- Adjourning. The team breaks up as a result of completing their objective or because outside forces drive them apart.
By taking this model and applying to the macro-level—to businesses and organizations—it’s easy to see how a company comes together (forming), creates its unique differentiator (storming), gets good at it (norming), scales (performing), and then…
Crisis (adjourning).
We are—right now—all back in the forming phase of this cycle. Our businesses and institutions and families have been turned on their heads by Covid-19, by the economic downturn, and by confused reactions to these crises. We have to find a new way to organize ourselves for our benefit and for the benefit of our customers and users.
To come out the other side of this crisis, we need the courage to rethink how we do things. To innovate how our teams work, what products or services we offer, and what makes us truly different.
This is the time to lean in.
Step 3: Keep going.
“If you’re going through hell, keep going.”
– Winston Churchill (apocryphal)
After California Governor Gavin Newsom issued his state-wide shelter-in-place order, venture capitalist and co-founder of Emergence Capital Jason Green told investors, “I’m proactively telling everyone to forget their year plan … I don’t think it’s a good idea to have a long-term plan … It’s good to think about the next quarter and then reassess literally every few weeks.”
Green is half right—adapt your short-term plan, sure. But not your long-term strategy. Not if you want to come out of this thing like a g*ddamn rocket.
In fact, I’d argue we’ve already adapted to the short-term. Education and work has leveraged telepresence technologies so home-bound people around the world can continue working with as much—if not greater—productivity than they had before. Logistics services have swollen to meet the needs of people unable to venture out on a whim. Financial institutions have begun extending much needed relief as this adjustment takes place and, while much more needs to adapt before this crisis is passed, our technological infrastructure is well-positioned to keep the gears of many industries turning.
But the long-term remains. We don’t have to know what tomorrow holds. We just have to trust, this crisis will end.
All crises do.
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