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When the Going Gets Tough ...

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Business and organizational leaders reflect on the crises of the past and how the lessons learned may help in today's troubled times

When a catastrophe hits, it seems as if time is standing still. Humans seem to be wired to retain the most detailed information of those troubled accounts: where they were, what they were doing, and how the event itself may have changed them, or — in the case of Jim Parker — his company.

Then CEO of Southwest Airlines, Parker was in his car doing what he did every morning: driving to Southwest's headquarters in Dallas with his radio tuned to “Morning Edition” on National Public Radio. The date was Tuesday, September 11, 2001, and Parker was stunned to hear a report of a plane crashing into the World Trade Center.

“At first I thought it was a sight-seeing plane,” says Parker. “But by the time I got to work, it was clear that it was a terrorist attack. Southwest had an emergency procedures manual ... but there was no manual written for this type of situation.”

Today, as a regular presenter during Sloan Innovation Period (SIP), Parker is able to share the painful and powerful moments of what he calls the worst crisis in the history of aviation, and how he — and Southwest — survived it. Which begs the question: How did they do it? If widely quoted economist Paul Romer is correct, and “a crisis is a terrible thing to waste,” what hidden opportunities exist in the worst of times, and what can be done in the best of times to prepare for the worst? And, perhaps most important right now, what lessons can show businesses how to come out of the current crisis stronger and more innovative?

When it comes to managing in times of adversity, most people either overreact or underreact, “both of which are really bad,” says Howard M. Anderson, the William Porter Distinguished Senior Lecturer of Entrepreneurship and the founder of The Yankee Group and co-founder of Battery Venture Capital. “You have to triage the situation: you can't solve all the problems, but what can you solve today, what can you postpone, and what can you do right now?”

What do you tell your employees and customers? Give good information, says Anderson, but not false hopes.

At one point in his career, Anderson worked with a company that had been sold to a larger conglomerate and was being pressured to cut back on product testing. “The products started to fail,” says Anderson, “but the president did not publicly say, ‘Our testing procedures were inadequate.’ Instead, he said, ‘It's our fault, and we'll fix it.’ He took responsibility instead of providing excuses, and it was the right thing to do.” What' key, says Anderson, is that the CEO acts as a buffer, one who can meet “triumph and disaster, and treat those two impostors just the same,” he says, quoting from Rudyard Kipling' poem, “If.”

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