A Guide to Making Difficult Business Decisions in a Crisis

The pandemic has presented every business leader with tough situations — these steps will help you navigate them.

Marco Ludwig · 4 Sep 2020
Difficult business decisions

When you’re a leader, others will naturally look to you every day for guidance about what to do, as well as how and when to do it. But when a crisis hits, the unusual problems you encounter can present unique challenges you didn’t anticipate. Thus, your decisions can become all the more critical, determining whether your business can effectively recover and adapt. How can you possibly make choices that ensure success in such stressful, high-stakes, and potentially disastrous circumstances?

Related: 3 Examples of Amazing Crisis Management & What We Can Learn From Them

You really do have time

One thing most crises have in common is that you need to deal with them fast. But this does not mean that you cannot take at least a reasonable amount of time to think. In most cases, you can step back from what is happening long enough to gather some basic information and analyze it from a neutral perspective.

Don’t let the severity and emotion of the situation distract you. Instead, think about asking the right questions. What do you really need to know or understand to come up with some potential solutions or strategies? Doing this in a calm way both reassures your team and ensures that you have truly relevant information to work within your problem-solving. Both of these things can help you still respond as quickly as is required.

Connect and gather information

Stepping back and taking some time to breathe at the onset of a crisis doesn’t mean stepping back from your team. In fact, it’s during a crisis that your connection to your experts, stakeholders, employees, and anyone else becomes most important. It’s these people who can provide important data that can help you come up with a good solution.

Once you know what kind of information you need, reach out, and make specific requests for help. Making sure that you contact lots of different people in varying areas of expertise can give you the broader perspective you need to know you’re approaching the problem properly and haven’t missed something important.

But just as essential, reaching out will help those you contact feel like you trust and respect them. They will get the sense that you are being both humble and level-headed. This contributes to strong, deep relationships you can turn to long after the crisis has passed.

Structure what you’ve gathered

When push comes to shove, simply having relevant information in a crisis isn’t enough for you to make a good judgment call. You also have to structure that information in such a way that you and others actually can make sense of and apply it.

There are different ways you can approach categorizing your data. But points like these below can provide a decent starting framework for many situations:

  • What facts do we know?
  • What are we assuming?
  • What other things do we think are happening?

You should be able to source all your facts and give a clear rationale for the assumptions you’re making.

Once you have some structure to your information, try to build out some hypothetical scenarios about what could happen. Include both good and bad scenarios here, and let yourself look at extremes on both ends. Give each scenario a quick summary that identifies both negative and positive consequences, as well as the people or departments involved.

Be clear about the probability of the scenario even happening, too. This is important because you’ll likely want to focus on and direct resources toward the scenarios with the biggest odds of becoming reality. But keep in mind that scenarios with a low probability of happening still might deserve some attention if they have the potential to affect your business dramatically. Be realistic as you try to mitigate risks and don’t get too trapped in optimism bias.

Related: 6 Things I Wish I’d Known Before Becoming a CEO

Make your choice

There’s no clear rule or formula for making a decision in a crisis. But having a portfolio of scenarios in front of you, along with the pros and cons for each scenario, lets you compare what might happen according to your goals, vision, and values. You should know how your decisions are going to affect the scenario, for better or worse. Factoring in the likelihood that the scenario really plays out as planned, try to select a decision that triggers the best result. From there,  communicate with your team, stakeholders, customers, etc. about your choice and why/how you made it.

Making decisions as a leader generally isn’t a cakewalk. When you’re in a crisis situation, it’s all the harder. With a cool-headed, data-centered approach, however, you can get a better sense of what could happen and whether one path could be more favorable than another. Bring individuals you trust into that process and you won’t feel isolated or hopeless, even with major hurdles in front of you.

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