Q #116: Is there a right way to manage surprises?

In this series, Bob Morris poses a key question and then responds to it with material from one or more of the business books he has reviewed for Amazon and Borders.

Experts’ opinions differ but all agree that the “right way” is the one that achieves desired results, whatever they may be. In a recent contribution to the Harvard Business Publishing blog, Ed Gilligan shares his thoughts, based on four experiences of his career as a corporate executive. He is vice chairman of the American Express Company and oversees the company’s global business-to-business group which includes merchant services, network services, commercial cards, and business travel.

“As I reflect on those experiences, I thought of four things you might NOT want to do when (notice I didn’t say “if’”) you come face to face with a surprise.

1. Don’t wait so long to tell (or to ask.) It was 1998. I had only reported to Ken Chenault, our CEO and Chairman, for about three or four months at that point. I was managing our US corporate travel and commercial card businesses. And I had a little problem. It was called the Asian Financial Crisis. Remember that? I can still feel the puddle of sweat on the middle of my back as I told Ken in September I was going to miss my numbers for the year. But I’ll also never forget his response. He said, “Ed, you’ve done all the right things to deal with the issue but next time, don’t wait so long to tell me. We have more options if you tell me earlier.” He handled the situation with grace and I learned a lot about leadership. Tell early. Ask often. Get surprises out in the open as soon as you can. That way you move beyond shock, can focus on action, and work to get closure.

2. Don’t forget your playbook from the past. You can and should have a playbook for surprises, but humility needs to be a key chapter in it. When we started to see the impact of the current crisis in Q4 2008, I wasn’t that surprised. I had mentally prepared myself for a downturn. The surprise came when Lehman Brothers collapsed and the credit markets froze up. In my mind, I went back to the playbook of 2001. I remembered how we had to go after new market segments, expand our sales force, and cut our expense base. I shared these experiences with my direct reports and reminded my boss of them. I thought — that’s what we’re going to rely on. We’re not going to just focus on the gloom and doom. The lesson here is that you can mentally prepare yourself for a surprise, but never kid yourself that you’re truly ready.

3. Don’t define your people by their surprises. People will always line up to tell you the good news. But you want people who are willing to step out of line – in that they tell you the bad news too. How do I encourage this? I realize that the invitation starts with me. That’s what I can control. I can be a role model for open dialogue. I can talk about stress and how I’m dealing with it. I can tell people how important it is to have confidants, colleagues, mentors – people with whom I can feel safe having a conversation. I give them permission to do the same. And above all, I try to never shoot the messenger. I never let a single surprise define a person’s career. Multiple surprises, well, that’s another story. And I’ve come to realize that story’s plot has as much to do with me as the leader as it does with the person who works for me.

4. Don’t base your forecasts on hope — get that from relationships. You have to give hope to your organization while you lead with reality. And when I say hope, I don’t mean that you should assume or hope things will get better when projecting your numbers. Don’t make hope your strategy. Base forecasts in reality as much as you can. Get your hope from the people that you work with and the clients you serve. They are the ones who can help you turn your forecasts into results. Being externally focused, confronting the economic reality, and building a stronger future state for your business will give hope to your organization – and to you.

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Here is a link to the Harvard Business Publishing blog:

http://blogs.harvardbusiness.org/

Comments, questions, requests, or suggestions? Please share them. They will be most welcome and I thank you for them. Best regards, Bob