Taking Decisive Action in Leadership During Crisis and Change
As a business leader, you will face crises and significant changes that demand swift and decisive action. These moments can define the trajectory of an organization and its future success. As the former leader of a lending organization that required substantial changes on my first day, I can attest to the critical importance of taking bold steps, even when they may be unpopular.
Stop the Bleeding: Put Out the Fire
When I took the helm of the lending organization, it was immediately clear that significant issues needed addressing. Diagnosis and careful analysis are essential, but when you're facing a cascading waterfall of problems, triage will often override diagnosis. You can't effectively diagnose and solve problems if you're overwhelmed by ongoing chaos.
The Necessity of Decisive Action
Taking decisive action can be particularly challenging for first-time leaders or those early in their careers. The hesitation often stems from a lack of empowerment or confidence in making battlefield decisions and executing them. However, when you are at the top—when your name is on the letterhead—you don't have the luxury of passing off the tough decisions.
Understanding the Nature of Decisions
It's essential to distinguish between making decisions that are unpopular and those that are unhelpful or malicious. The goal should always be to make decisions that benefit the overall health of the business. This includes:
Your Employees: Ensuring they have a stable and supportive environment.
Your Customers/Market: Maintaining trust and delivering quality service.
Yourself: Preserving your integrity and leadership efficacy.
The Challenges and Benefits of Swift Action
Taking swift, decisive action can be terrifying and leave you feeling rattled. In my experience as the leader of the loan fund, I faced significant challenges from the outset. Regulators had raised red flags about our lending practices, posing a severe threat to our business's stability and future.
Rather than opting for gradual changes, I decided to implement a new lending Standard Operating Procedure (SOP) overnight. This SOP required strict adherence from myself, my team, and our clients. The changes were more work, less user-friendly, and initially slowed down our processes. Unsurprisingly, the decision was not popular with anyone.
However, these changes were necessary to safeguard our organization. The new SOP ensured that everyone's information remained secure, our loan fund stayed protected, and we complied with regulatory requirements. Despite the initial resistance, this decision was ultimately the best one I made during my tenure.
Decisive Leadership in Action: Lessons Learned
From this experience, several key lessons about the importance of decisive leadership during crises and change can be drawn:
Immediate Action is Crucial: In the face of significant threats, hesitation can be detrimental. Immediate and comprehensive action is often necessary to stabilize the situation.
Empowerment to Lead: Leaders must feel empowered to make tough decisions. This sense of empowerment often comes from a deep understanding of the business's needs and the confidence to act in its best interest.
Long-Term Benefits Over Short-Term Popularity: Decisions that ensure the long-term health of the organization may not always be popular in the short term. However, the benefits of stability, security, and compliance far outweigh initial discomfort and resistance.
Clear Communication and Implementation: Effective implementation of new policies requires clear communication and steadfast adherence. It's essential to convey the reasons behind decisions and the benefits they will bring to the organization.
Resilience and Adaptability: Leaders must be resilient and adaptable. Swift action can be unsettling, but a leader's ability to remain composed and focused is critical to guiding the team through challenging times.
Conclusion
Decisive action in moments of crisis and change is not just a leadership trait—it's a necessity. My experience leading a lending organization through significant changes taught me the value of swift, bold decisions. While these decisions may initially be unpopular, they are often crucial for the long-term health and success of the business. By prioritizing the well-being of employees, customers, and the organization as a whole, leaders can navigate crises effectively and emerge stronger on the other side.
