199: Verne Harnish — The 5Cs For Leading in a Crisis

Panic is contagious out there, but so is leadership. And it's time to rise up of leaders. Vern has spent 38 years working with the best leaders in handling crises and he's created a practical one pager dealing with five Cs of leadership in a crisis. Or download. We'll give you the link in the show notes here. You can probably also find it at scalingup.com or scalingcoach.com we're going to share one practical resource each day this week to support people here. Here are the big five that we're going to talk through these with Verne Harnish right now. Hey everyone, I'm Bill Gallagher, scaling coach and host of the show. This episode is one in a series of the main things that leaders need to do to make a difference right now in order to navigate this crisis or any other crisis in the future. And you'll find this series along with about 200 other episodes on leadership and scaling up at our website scalingcoach.com of course, the main website also Scalingup do you'll also find downloads of all the tools that we talk about right there, including this five Cs and you can get a free copy of the international best selling book Scaling up right there@scalingcoach.com Listen in now as we talk with Vern Harnish. All right, we're joined now by Vern Harnisch, Vern, creator of the Scaling up framework and the Rockefeller Habits. And Vern, I was last with you in Amsterdam and we did a big session with accelerator trainers from around the world. Things have changed a lot since then, haven't they?

Yeah, we had a gathering of 7,200 entrepreneurs in that stadium where I keynoted as well. And now with the announcement yesterday, we probably can't even allow more than 50 to gather. And you know, I think in short, things are changing every 24 hours.

Yeah.

And so this is absolutely that example where let's keep your eye on the prize, but where are we going to be in the next 10 years? Because we will get through this like we have world wars and everything else. But your strategy is only as good as your next punch in the face or next move. And things are changing every 24 hours. So, right, where are you today, our teams?

Where are you going to do next week?

And I'm like, what are we going to do tomorrow? Is the only thing that we need to stay focused on.

Where are you now and how are you operating with the wider Scaling up teams?

Well, we've always been virtual so, you know, it was almost a joke. All right, everybody work from home. Wait, we're already all working from home. So we have been virtual and global for decades. So we put out real quick, the team Global team went to action yesterday. And we, we wanted things to kind of, you know, was crazy. Friday, Friday the 13th. I think folks needed their weekend, but It's Monday and St. Patty's Day. Yeah. And as we opened up, you know, panic is contagious and so is leadership. So we all need to do is lead.

Yeah. So we're operating except our normal schedule. I think it's useful to acknowledge everybody's in a different world. Like we're. It's normal for us to work from home, but. But we're also getting out with our teams and speaking at meetings and conferences and that kind of thing. So that's all stopped. But we have people now laying people off. We have people whose jobs aren't from home and who can't go in. And then we have other people going in, like medical workers who are frontline in, in all of this. So people are in a lot of place.

And hey, you know what? Everybody can read all they want about this 247 on CNN or whatever is their favorite channel. So I'd rather us get to. All right, let's get to the five Cs he as leaders need to take starting now.

So you've spent some time, you've been through a few downturns, you've worked with companies through crises or downturns, and you've got five Cs of leadership, a big dose of C, if you will.

You got it. And so let's just walk through those and we've got a download everybody can grab that I know you'll make available. But in our typical five and top one of five, that the absolute number one. And I should give perspective. Last week we ran our CEO bootcamp and when everything really hit crazy on Wednesday, we thought the seven CEOs would say, hey, we gotta run back. But they stayed and we really worked through what they needed to do to power their organizations through this. And it was super helpful. And the most important is to over communicate. Everyone says that, but what does that mean particularly? And that is to send out a daily communication, an email, two minute video, a voice message, whatever is your style, but get something out. The key is though, to stick to the facts. Don't be trying to guess. Hey, I imagine or bet you're feeling this isn't a time for guessing. So just present what's happening. Don't sugarcoat it. But this week, balance one negative with several positives. There's always things that we can point to. And if you do have to share a negative, and this comes from Robert Cialdini, the godfather of influence, put it first and then what you're going to do about it, that is actually makes you more believable and trustworthy. And that's what you need to do, is maintain trust throughout this. So right now, pick something, communicate it out. And in many cases, we've got our teams communicating twice a day.

Okay, so communicate daily, maybe even twice a day, and communicate from facts. Right.

So number two then is customer community support. We like, for instance, our own companies. We've cut out all promotions. Obviously, you don't want to be trying to sell this week or two. Our focus is just give, give, give, give with no expectation in return. And that's what we think really is important. And so, and you know, it's interesting, research shows that one of the ways that you combat depression, sadness, whatever, is to proactively go help someone else. So our teams are solely focused on what do we have to do to help someone else in this particular situation. And that has been a real positive for all of us to experience.

That's really good then.

And by the way, to that we are ourselves. We've got 10 courses online that we're just giving away for free for the next 30 days, which will come up to one of the next things we want to talk about. But let's get people a little bit off of, you know, sitting in front of cnn and let's stay focused on what can we do to prepare because luck comes to the prepared and this is the time to brush up on negotiations and scaling up and who and all the other kind of learnings that maybe we've been putting off because we've really been busy over the last decade.

Well, you're moving naturally into number three. Right. Cleanup and catch up. There's an opportunity to put things in order during a quiet time like this.

It is. And I remember when Gene Brown with Citibank, you know, we talk about him in the scaling up, and he was in the depth of a crisis. 2010, Ireland, one of the pigs countries, the whole economy was collapsed. He's just trying to make payroll. And he really engaged all of his employees, all 60 guys driving trash trucks and all, to say, all right, what are the stuff that we can. They called it Bennett. And they were able to strip out about 25% of needless activities and costs and really Actually able to make everyone's job easier and save a bunch of money. And so we're going to. In this document we have a free download of Paul Aker's new book, Banish Sloppiness. And so this is the time to do spring cleaning.

Yeah, well, I know in the last downturn. Well, and actually in a couple of. One of the things that we did is we looked at everything that was working, that was being used, that was active, that was succeeding, that felt good and we kept that. And then everything that seemed unproductive, a struggle, difficult or just occupying space, we ditched it or cleaned it out. So both in the physical world and in our operations, we ditched thing that allowed us to focus more resource on what was working. And some things like we had some clients that worked with us one way and some that worked with another way and one way worked the other way didn't. And we went to the people and we said, we can't work that way anymore. It just doesn't work. You know that and if you'll work this other way, we'll keep you. If not, we're sad to see you go and thank you for your business. And we thought we'd lose virtually everyone and we kept almost everyone. And it was really surprising. But now suddenly our operation ran smoother and over the next year we doubled in size.

Yeah, well, and we said as a real theme for all of 2020 of really a focus on process. If there is a weakness within scale ups, we're so focused on making sure our functions run well that we forget that the customer and the employee experiences the business through these set of four to nine processes. And this is a perfect time for folks to sit down and say, all right, where's the drama that we should clean up? This is the time to get those internal projects that we've been putting on hold. Whether it's to clean up the website and make it easier to navigate, clean up our documentation, go and clean up some programming, you know, whatever drives your product or service. You want to focus on making it easier. And some of the stuff's not easy. We just have been too busy to get around to getting that stuff fixed. So this is a perfect time to keep everybody active, keep everybody positively engaged again so they're not sitting there staring at the news and getting depressed and proactively prepare the company so that when the craziness comes back, and it always does, always has, we're in much better shape to take advantage of it. This is the time to prepare and clean do spring cleaning.

You know, I had a woman who was in one of my workshops and who is a graduate of the old birthing giants program and or no, she's gone through the, the EMP program and I was on with her yesterday and she was telling me all about all of her different projects and all the parts and her business is in total crisis. I said, okay, she's in her office. I said, so take one of your flip charts, stick it on the paper and create a parking lot. Let's call it though not doing now. And for each of these things, as you tell them to me, let's create a sticky. So we filled her all of the projects that were swimming around her head and we put them all up on the not doing now list. And I said, okay, your job is if you see something's relevant, you can pull it forward, but you just keep noticing that all that stuff that you had going on, you're not actually doing that anymore. All those projects are on hold for a while unless they actually seem relevant and stop stressing about all that stuff. And she said, we talked about a bunch of other things. She's like, that was maybe the most useful part of it. Just to put my mind at ease, to focus on what matters.

Good. Which by the way, I think leads us to the fourth C we call cash Cash. And that's a very specific cleanup activity. And again I go back to Gene Brown. He realized again in the depths of their crisis that he just needed €40,000 per month saved. He needed it found. And rather than just he and a CFO holed up trying to figure it out, again, he turned to all 60 of his team and they found the savings too much to his surprise, which netted about an extra half a million for the year, which was exactly what he needed in order to get things turned around now, particularly here in the United States. Last week they announced this $50 billion SBA loan increase and there's a simplified program where you can get 350,000 10 year loan within just a few weeks. Here the Fed, because they dropped their rate to zero yesterday, they're expecting these loans to be sub 6%. There's no prepayment penalties, so we're actually going to get one ourselves. And our only stated pro, you know what we need the proceeds to be used for is to backstop salaries because we've made a commitment to all of our team that hey, we've got the cash and we're going to make sure that everybody's continuing to get paid. And I Want to put another chunk of change in the bank in order to do that. But we'll have information out on that specifically.

We talked a little bit earlier this week with Greg Crabtree and Rich Manders about conserving cash and moves. And I've been talking with clients and had some great successes just in the last few days having people make radical requests. So a radical request is when you go to your landlord and you ask for a year of free rent as I did back in 2009 because I said I don't know if I have a business. And he gave it to me with quarterly review to make sure I still need it. Needed it. And in exchange for a two year extension on the lease, which I gladly gave and I found partners all over the world who gave me unusual. There's an opportunity when you're looking at cash to look not from a typical just tidy up but from something extraordinary and push in creative ways. Not to take advantage of people, but to pull together.

Yeah, I think it's a great example, Bill.

Yeah. So and then the episode that we released on Monday morning was with Heidi Hanna, but we also had Warren Rustan talking about this breathing, being calm and considerate. Right. Talk to us about five.

Well, I think it is critical as you come through this. And it was something I picked up at the Tony Robbins Date with Destiny experience. And I actually adopted a new mantra for myself which was hey, in everything, just be peaceful, playful, passion, full. It's really helpful, especially during the crisis because the reality is the leader sets the tone for the entire organization. And when you come back to what is required. Yes, I meditate. I'm glad I've got that practice. But not everyone has down the path. So the single most important thing you can do is just take a few deep breaths and I, I share this one page you're going to be sending out. I remember my son Cameron and a lot of folks know that I'm a member of the International Brotherhood of Magicians and was a stage magician for a few years. And so my son, when he was 12 at the time, wanted to first elementary school do the famous Houdini metamorphosis illusion. Quite complex, requires kind of a special magician's box. And anyway, I being his assistant made a mistake and he got in there in front of an audience of 500 and he got stuck. He couldn't get out. He has like seconds. And at that moment, because we had talked about this, he had remembered to just take a couple of really deep breaths and very quickly a solution came to him and he got out in time to make the illusion work in front of all of these people. And that stuck with him. You know, as a father, you hope for these teachable moments which all these crises provide. And so years later, remember, he's quarterbacking as we live in Barcelona. It's catalonic team to both the city and then ultimately a country championship is teams down significantly at the halftime. And I talked to him later in the halftime kind of break he just shared with his whole team as quarterback. Look, we all need to take a few deep breaths here. And then I saw when he came back out on the field, almost every time he lined up behind the center, I'd see him physically take a couple of deep breaths. So he was ready to execute. And they went on and won that particular championship. Turned it around in the second half. So look, nothing else. Take a few deep breaths. Thank goodness you can breathe because that's this virus, obviously for the elderly, particularly elderly men who smoke has not been good. So as I end the thing, namaste and good luck with these licenses.

Thank you so much for talking with us. I think it's really great. So five Cs communicate daily, maybe even twice a day and communicate from facts. Get connected with your customers and community. Give. Give things away to people that need them. I had a client who called me and asked for to cancel our coaching because he was panicked about expenses. So don't you dare. I'll coach you for free until you're on the other side. You can pay if you can later or never. And. And we're doing all the free coaching our schedule will allow now for people who are in trouble. Number three, cleanup and catch up. So get caught up with things. Use the time and the space to clean up and. And keep people proactively occupied on what you can manage. Then start to engage. The cash is number four. And get the whole team involved. Use things in a creative way. Find the cash, conserve the cash to make it through. And then number five, be calm and considerate. Take care of yourself. Breathe more than anything else. If you have another practice around mindfulness stress, practice that.

Thank you, Bill.

Five C's. We'll put the download in the thing. Thanks so much, Vern for coming on and finishing out this series on dealing with the crisis for people. I know that this recording will make a powerful difference. If you want to know anything more about the stuff that Vern is doing, the latest things will be all on the website, webinars, downloads, etc. This@scalingup.com thanks again for listening. Keep Scaling up. If this show is helpful, please share it with somebody else right now, like it and subscribe to get them every week. We always appreciate your positive reviews. If you can give us a rating and a review that makes a big difference when you share it and pass it along in growing the show, that's something you could do for us. You can also send us your thoughts or email us@info scalingcoach.com Infoscalingcoach.com I want to give thanks to Vern not only for coming on the show to share the five Cs but also just for creating the whole world of the Rockefeller Habits and Scaling Up. This show was produced by Lucy Summers, the audio is edited by Albert Burge at Podfly Productions, and the show notes were written by Ayn Kadina with proofreading by Tim McGowan. Thanks again everyone for listening. Keep Scaling up. Jump.