Going Into The Fire

There are many traits that a leader must have and, certainly, among the most important are integrity, philosophical foundation, vision, quick learning ability, consistency in decision-making and emotional maturity. But the one characteristic I believe is critical to leadership is knowing when to engage personally with presence versus delegation.

The challenge with this issue is that you could err on either side. Engaging in trivial matters is wasteful leverage and undermining for subordinates. Failing to engage in large matters that affect the reputation and brand of the company is failing to do the job. I call the times when you personally engage and get out in front as “going into the fire.” I have also heard it referred to as “being on the coal face.”

The times when personal involvement is most appropriate can be best be described as true crisis. There is real risk to the company and its leader in these moments. If the leader does not fix the issue, there is no fall back. We saw this in the Exxon Valdez and BP Gulf Coast oil spills, when the CEOs went into the fire and did not perform well. In fact, they made things worse.

Most conservative corporate legal teams will advise against the top leaders engaging, both in the interest of protecting them and putting them in reserve. If a subordinate takes on a crisis only to aggravate the problem, there is room to disavow and reverse, if you have a leader in reserve.

On first glance, this looks like a topic for CEOs, but frankly it applies to all levels of leadership. The only thing that changes in lower levels is the severity of the crisis. For instance, in a project, if a client threatens to fire you, that is a mini-crisis that should attract the immediate attention of a leader.

Leadership reputations are made and remembered in times of crisis. People want to see their leaders take responsibility and get out in front. They want to see courage and for someone to set an example. But, this call to action requires great skill and can be dangerous. To be effective you expose yourself to being vulnerable. You need to admit disappointment, to emote, yet to project sincerity. Finally, the leader also has to have a responsive corrective action plan that you stand behind personally. You shouldn’t just say you are going to investigate.

Crisis management is a science that can be learned and it should be high on the agenda of any aspiring leader. Excellent courses and videos are available. Courage and judgment cannot be learned easily. In the end, the quality of a leader will best be displayed in times of crisis. Hiding behind others is not the answer, even though it is safer.

Postscript

I wrote the “Going to the Fire” article in the fall of 2013 and I can’t help but get excited about a recent event that illustrates the various points in the article.

As you may know from the press, Target had a major security breach at the very worst time of the year, during the holiday buying season. Credit card information from late November to early December had been hacked and compromised. The issue was first thought to have affected some 10m+ Target customers who shopped during this specific time period. All customers were encouraged to review their card charges looking for fraudulent activity, but the request was again, hugely disruptive. (I was one of those.)

As the investigation of the events proceeded, it was revealed in early January that the security compromise involved a much larger population reaching nearly 70m customers. Now that is a monumental crisis relative to customer confidence and loyalty!

In this crisis, the actions of Target’s CEO is worth noting and ties to my article. CEO Gregg Steinhafel went to the ‘coal face’ and became the principal spokesman of the company. On January 13, 2014, Target posted a full-page letter in the Wall Street Journal (page A5) along with other publications explaining their position. If you missed it, I want to share it with you as it is about as perfect as it could be. When you read it, you see these elements:

The CEO is the spokesman
The company acknowledges its accountability
The company apologizes and shows compassionate remorse to those effected
The CEO lays out an action plan and personally commits to supervise
The CEO concludes by stating the mission purpose of winning back his customers’ trust

Maybe equally important is what the letter DOES NOT say. They could have said things like:

Target was a victim of criminal activity out of their control
Target’s stock price and revenues were harmed, as if “money” was the only important return
Target did not state “no comment due to the investigation” underway
Target did not delay an action plan until all the causal facts were known
Target did not say that a cyber security breach could happen to anyone and they were just unlucky

Now, this is an effective letter of apology and re-commitment from the CEO to his customer base. Later that day, the CEO appeared on television to demonstrate his ability to answer questions off script. He was believable, open and remorseful in the interviews. You should also note that he subtly puts his title of Chairman, President and Chief Executive in lower case letter at the bottom of the article as a signal of humility. This is “Going to the Fire” and here is the letter:

“Dear Target Guests

As you have probably heard, Target learned in mid-December that criminals forced their way into our systems, gaining access to guest credit and debit card information. As a part of the ongoing investigation, it was determined last week that certain guest information, including names, mailing addresses, phone numbers or email addresses, was also taken.

Our top priority is taking care of you and helping you feel confident about shopping with us.

We did not live up to that responsibility, and I am truly sorry.

Please know that we moved as swiftly as we could to address the problem once it became known, and that we are actively taking steps to respond to your concerns and guard against something like this happening again. Specifically, we have:

Closed the access point that the criminals used and removed the malware they left behind.
Hired a team of data security experts to investigate how this happened. That effort is ongoing and we are working closely with law enforcement.
Communicated that our guests will have zero liability for any fraudulent charges arising from the breach.
Offered a one year of free credit monitoring and identity theft protection to all Target guests so you can have peace of mind.

In the days ahead, Target will announce a coalition to help educate the public on the dangers of consumer scams. We will also accelerate the conversation- among customers, retailers, the financial community, regulators and others- on adopting newer, more secure technologies that protect consumers.

I know the breach has had a real impact on you, creating a great deal of confusion and frustration. I share those feelings. You expect more from us and deserve better.

We are determined to earn back your trust and confidence and ensure that we deliver the Target experience you know and love.

We are determined to make things right, and we will.

Sincerely,

[signature}

Gregg Steinhafel, chairman, president and chief executive officer, Target”