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Trial By Fire: The New Rules Of Resilience

CEOs share strategies for not only surviving crises, but thriving in their wake.

There has been no shortage recently of events testing the resilience of America’s CEOs. Covid upended business models overnight, while natural disasters ranging from wildfires to hurricanes disrupted supply chains and displaced workforces. Financial upheaval and soaring inflation squeezed budgets and forced organizations to make hard choices about investments and cost-cutting. Meanwhile, technology disasters such as data breaches and system outages have threatened the integrity and continuity of operations.

And then there are the everyday storms that each company, and every leader, must weather. “Nobody has a business that doesn’t face adversity at times,” Glenn Fogel, CEO of Booking Holdings, told executives gathered for a roundtable conducted in partnership with PURE Insurance. “Everybody’s got issues. We all have to deal with things. So during a crisis, what do you do with it when you face it?”

That’s something Ed Bastian knows something about, having led Delta Air Lines through the pandemic that dragged the airline’s revenues down to 10 percent in the early months of 2020. At the same time, Bastian was hit with another tragedy: He lost his mother to Covid. “It was really hard, and it took me every ounce of resilience I had to just kind of pull it together,” he said. “But once I had a chance to really think about it for a couple weeks, it was the greatest opportunity I ever had to show leadership. To be sitting in that seat was not a burden—it was a privilege.”

“No, it was not a burden,” agreed Shai Weiss, CEO of Virgin Atlantic. “All of us have been tried and tested through the pandemic, and it was a great privilege. I mean, of course it was a burden, but it was a tremendous privilege to be able to save jobs and make sure that people had a better future. Anybody who saw it as a burden—that’s really not the right attitude in my mind.”

Bastian’s strategy was to keep the company intact—as one of few in any industry not to furlough a single employee—and keep a steady course, holding faith that Delta’s time would return. “We knew we’d be back, we just didn’t know when,” he said. In the meantime, “we stayed focused on things that mattered, which was taking care of each other, taking care of our customers, blocking the middle seats throughout the entire pandemic and everything we did around wellness and protection—we became the gold standard.”

Ultimately, both Delta’s revenues and share price recovered, and the crisis helped shine a light on those within the company who were true leaders and showed promise for the future. “Frank Blake, who was my chairman at the time, said, ‘Crises don’t build character, they reveal it.’”

They also provide opportunities for lasting lessons and much-needed change, if leadership is able to be candid and self-reflective, said Stan Deal, who was appointed as president and CEO of Boeing Commercial Airlines on the heels of the fatal 737 Max crashes. “Ultimately, what we had to do was look at ourselves first,” said Deal, recalling visits with victims’ families in his first weeks on the job. “Resilience for me gets defined by that moment of truth when you have to look at a family member and dedicate yourself to not forgetting and doing something different about it every day—and every day, we do.”

As a result of the time spent reexamining, he added, “we totally restructured our governance.” Boeing took a page from the airline industry’s playbook on safety management. “They have a system that works, and we said, if it works for the airlines, it’s got to work for a manufacturer,” he said. “And then we totally aligned around our engineering team, because we’re an engineering company at our core. Yes, we have to produce financial results, but we have to do it through engineering excellence. So we calibrated.”

Deal and his senior team reexamined, and recommitted to, the company’s values. “Safety, engineering excellence, manufacturing quality, those big ingredients, and then transparency—that we wouldn’t hide anything. When we saw risk, we’d talk openly about it to our partners, the airlines. Because they built big businesses on top of us. So [there was] a lot of emotional resilience through that moment.”

The American Red Cross faced its own abyss in 2008, having had seven CEOs in as many years and far too much debt on the balance sheet when CEO Gail McGovern took over. “She focused on governance first,” recalled COO Cliff Holtz. “Once she got that squared away, she focused on people.” For more than 20 years, the company had been under a consent decree with oversight by the FDA. “She put in an entire quality infrastructure in place to tackle that issue,” Holtz said. “We got out from under that consent to decree about six years ago to the credit of her focus on safety. So, now we do have the privilege of looking forward to mission expansion and investing in people and infrastructure.”

While some crises are temporary or intermittent—inflation may come and go, and markets will swing from bear to bull—others, like climate change risk, will pose an ongoing threat for the foreseeable future. “That’s only going in one direction,” said PURE CEO Martin Leitch, noting that a record number of billion-dollar-cost events had taken place in the first eight months of 2023. “You just have to try to think of innovative ways to cope with it.”

In some cases, a crisis can reveal hidden advantages, if a leader is open to seeing them. CEO Mike Sievert first joined T-Mobile when the company was not doing well, to put it mildly. “We were a distant number four in the U.S., rapidly declining, had an inferior cost of capital and couldn’t afford to invest in LTE, and therefore was shrinking more and shrinking more,” said Sievert, who had been the CMO of AT&T prior to joining T-Mobile in 2012. “I assumed, having been a competitor, that the first thing I was going to have to do was replace everybody. How could a company that’s failing like this have anybody good? What I found was the exact opposite. It was a company absolutely filled with amazing people and an amazing culture, and nobody was listening to them.”

The healthcare industry is still in the midst of its own crisis post-Covid, said Ed Rand, president and CEO of ProAssurance Corp. “It’s the ‘karma crisis,’” he said. “One of the things that came out of the pandemic is a lack of trust in institutions and a lack of trust in science, and that is having very negative consequences for those who practice healthcare.” It’s even more challenging, he added, to be in a business that works in five- and seven-year cycles but be judged by Street analysts who don’t understand that cycle length. “We were at Fidelity speaking with a young analyst and talking about the long-term nature of what we do. And he said, ‘Oh, no, we’re long-term investors—we hold some of our positions for 90 days.’”

Inhibikase Therapeutics, also a public company, struggles with the same short-term thinking. “because the type of products we’re developing just don’t develop that quickly. So you have to spend five, seven years, maybe longer, getting to the endgame,” said CEO Milton Werner. “Surviving the markets, it’s just what we have to do. You take an awful lot on the chin.”

One way to deal with the market’s impatience is to keep your head down and persevere, said Maria Maccecchini, president and CEO of Annovis Bio, which has faced skepticism in its pursuit of a brand-new Alzheimer’s drug. “It’s hard to raise money when you’re a contrarian,” she said. “But people stick with me, and the reason they stick with me is that I have conviction.”

Crisis Reveals Leadership

Fogel shared that, for some leaders, resilience has been found overcoming personal adversity. As a teen, he suffered a major stroke that left him paralyzed on one side and unable to speak. Eventually he made a full recovery and went on to graduate from Harvard Law School with honors. “As Nietzsche [said], that which does not kill me,” said Fogel. “We’ve all been through these things, and we know that there is eventually going to be sunlight, eventually dawn will break, and things will get better. You just have to figure out how do we get through it the best we can with the situation we’re in.”

The ability of a company to get through a crisis often comes down to the resilience of the CEO. When AlixPartners helps companies vet CEO candidates for succession, interviews typically dig into past adverse times to get a sense of how they responded. “Almost 100 percent of the time, you can correlate early experiences with how they emerged on the other side of that,” said Ted Bililies, managing director. “At the end of the day, leadership is really about human beings meeting a challenge. And we can look at numbers and we can quantify it, but it’s really about having the grit internally to bring to that situation.”

Jim Citrin, who heads recruiting firm Spencer Stuart’s CEO practice, agreed. “It’s not, ‘Did you fail?’ It’s, ‘What did you learn from it?” He recalled former Citigroup CEO Sandy Weill’s practice of hiring people who’d failed in the past. “Because they had something more to prove,” he said. “I never forgot that.”

A leader’s adherence to culture and maintaining a constant vision can get a company through a lot of rocky times. Over its 91 years, Ethan Allen Interiors has seen plenty of crests and valleys—and has been profitable every year, said longtime CEO Farooq Kathwari, who credited the company’s 10 leadership principles with its longevity and success. “The first task is understanding that the main job of a leader is to help their people become better,” he said.

That’s a principle that has served Avanade CEO Pamela Maynard well through tough times. “We made our purpose at Avanade very deliberate, which is around making a genuine human impact, and we used that as the North Star to guide us through the pandemic,” she said. “Every decision I made, I thought, how is this helping my people? How is it helping my customers? I told my board that the financial plan will come third. Then it’s about having the courage to stand behind that.”

Having led AMC Entertainment through the pandemic, Adam Aron shared that for most CEOs, putting out fires is just part of the job. “Some are small and some are huge, but we’re all used to it,” he said. “So when something came along that was catastrophic, like Covid, it was just one more day at the office—except you weren’t at the office.

“That’s what strikes me about people who have the title of CEO, that they carry their duties so well. They were trained for it, and when asked to rise to the occasion, they don’t always succeed—but very often, they do.”


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