Teaching the Leaders of a Post-Crisis World

I have taught a class at the Stanford Graduate School of Business for the last few years, but this year was special. The class is about disruption and systems leadership. My co-teacher is Rob Siegel. He and I first envisioned the course to provide leadership fundamentals in an era where digital technologies impact the industrial world. It encompasses legacy companies and start-ups. Over time, we have broadened the course to discuss industries in transition and how leaders grapple with change. We build each class around a “guest CEO,” and we encourage them to be our teachers.

This year, we were all grappling with the pandemic. The students were on Zoom. This was a disappointing end to their Stanford experience. They know that the crisis will change their future, but they aren’t sure how. Meanwhile, the CEOs were struggling with crisis in real time. They were sharing their actions … decisions … and fears … with remarkable candor. Each was empathetic for their teams and each other.

We have ten classes and ten leaders. We scheduled our guests six months in advance, long before the pandemic. But picture this array of leaders and the lessons they conveyed:

• CEO of a major NYC hospital system
• CEO of a major media network
• CEO of a major oil & gas company
• CEO of a financial services company dealing with retailers
• Vice Chairman of an automotive company
• President of a large state university
• CEO of a consumer tech company
• CEO of an aviation supplier
• Two founders of fast growth start-ups

Every one of these leaders are in the eye of the storm. At the same time, they were energized by the challenge. They were open and vulnerable. They were looking for ways to help in the pandemic fight. All showed up ready to teach, by sharing their stories and experiences.

We learned a good framework for crisis leadership. They talked about the need to get good intelligence, developing a point of view that could guide them through the crisis. They demonstrated the willingness to do the hard jobs themselves, whether framing difficult discussions with customers or employees. They had “reset their clock,” dealing with the crisis in real time. They weren’t complaining or acting like victims. They were willing to say “I don’t know” when asked about every future detail in the face of uncertainty. Rather, they spoke about the importance of flexibility and optionality as they navigate volatility. They were moving quickly by engaging and empowering people they trusted. They always showed up for their team in the toughest moments, communicating with a sense of empathy. They didn’t delegate the bad news. They absorbed fear for their teams; preparing for the worst, while protecting investments for the long term … holding two truths. They were courageous optimists. They weren’t sticking their head in the sand. Rather, they demonstrated the courage to have a plan and the compassion to bring their team with them.

I was impressed by the adaptability of our CEOs. One had completely revamped her strategy in eight days. Another had 35,000 employees working from home. Another had restructured and automated their factory to allow social distancing. And, another had raised more than $3B of debt just to stay afloat. Business models were being transformed in real time.

Teaching the course via Zoom, got me thinking about the divergence between the physical and digital worlds. Zoom has had a huge impact. We could not have taught the class without it. It was fun, engaging and interactive. It allowed us to have more students, many of whom were geographically disbursed.

But it wasn’t the same (or as good) as being in the class together. We had fewer students engaged in each session (the number of students who could participate in a session was down about 25% vs. previous years because of the medium). We missed the subtleties of body language and nuance. Even our guests sent us notes after that they wanted to be in the room with us next year.

The pandemic exposes and widens the inequalities in digital readiness. Those who are less equipped may be left even further behind. Consider … big versus small companies, industries as a whole, or developing countries. My fear is that the rich are getting richer.

Silicon Valley can be a real bubble where people can believe that the “tech world” is all that exists. One purpose of the class is to show our students the importance of the physical world and the fact that there is an entire ecosystem outside of the Bay Area; one that is important to society and employs a lot of people. We can’t lose sight of this world. Companies like Microsoft and Amazon and SFDC are great, but they can’t remain great without their customers from the physical world.

As we emerge from this crisis, I’m not sure that the physical world is destroyed and the digital world takes over. I think the pandemic accelerates the integration. Yes, the physical world is hurting now, but we still need hospitals, cars, trucking, medicines, schools, teeth aligners, etc. The physical world will be changed but not disappear. And the best leaders will continue to accelerate the change.

The generation of leaders entering the workforce today have navigated two tail-risk events … the Financial Crisis and Pandemic. I know they will be crisis managers. But, through this crisis, they must keep their eyes open for new opportunities. There will be a place for digital natives for sure. But we also need leaders to tech-enable physical businesses, rebuilding retailers and hospitals and industrial companies; making them more competitive. This will improve the world and their own careers. We need this talent, and I know they are up for the challenge.