What makes an ideal crisis manager?

June 13, 2011: 1:29 PM ET

In the midst of what seems like endless crisis, some managers have developed skills that allow them to rise above the fray. Here's how they've managed to do it.

By Vickie Elmer, contributor

FORTUNE -- Fuel prices are climbing. Your company's stock price is slipping and so is staff morale. The computer is freezing up, again -- is it a virus? The drumbeat of stress and anxiety nears: An unsolicited buyout offer for your employer; workers demanding raises, or the option to work from home; college tuition up again. Add all these items up and the pressure that an every day manager faces may seem unbearable.

"We used to think of pressure as this random acute phenomenon that happened every once in a while. Now it may be more of a permanent whitewater state, something that executives need to deal with almost as a constant state," says John Hamm, a former venture capitalist turned business and executive coach.

Davia Temin, a New York based crisis and public relations executive agrees.  "Crisis has become the new normal," she says."

In a recent Harris Poll for Everest College, 10% of workers ages 35 to 54 ranked "unreasonable workload" as the most stressful aspect of their jobs, classifying it as a more potent source of stress than the commute or fear of layoffs.

More than half of workers say their productivity suffers as a result of stress, and money, work and the economy are the largest stressors in recent years, according to surveys by the American Psychological Association. Stress and pressure costs employers an estimated $300 billion a year in lost productivity, absenteeism and turnover.

Managers and executives share this load -- but some have developed an ability to thrive in an intense, competitive, fast-changing environment. Such people know how to bring out the best in their teams during a crisis.

"The people who are going to thrive in the future are those who can use this pressure to excel, as oxygen. People who have translated very difficult circumstances into opportunity," says Justin Menkes, author of the recently published book Better Under Pressure.

Menkes' book is based on his work with corporate boards as they evaluate, test and consider who to hire or promote as their next CEO. Menkes, who is a consultant with executive search firm Spencer Stuart, gathered evaluations of 150 CEO candidates to isolate the behaviors that the top-performing quartile exhibited and the bottom quartile lacked. After five years of research, he found three key consistent characteristics that the best leaders display:

1. Realistic optimism. The exceptional leaders demonstrated an ability to understand the actual circumstances of a crisis and see a chance to excel. Managers must "have a passion for confronting reality," Menkes writes in his book, referring to a pragmatic mindset. "You have to show you're staring into the sun with them; you're aware of the risks," he says.

 2. Finding order in chaos. This combines calmness, clarity of thought and a drive to fix the situation. It requires practice to stay clear-eyed and fearless when the world is tipping. It also requires zeal to solve a puzzle by engaging your staff.

3. Subservience to purpose or corporate goals.  This commitment to the higher calling or the greater good can make a huge difference. Effective leaders channel staffers' "intense reactions to recurring setbacks in a way that constructively keeps the organization moving forward," Menkes writes in his book. By encouraging a team to come together around some important goal, it cultivates tenacity and encourages collaboration.

In Better Under Pressure, readers meet several executives who use these three principles in daily life and during crises. A CEO of a regional hospital system -- and one of the subjects in the book -- faced an urgent situation just after he started his job: The Inspector General had sanctioned the hospital and it had 23 days to show that it was correcting its care of obstetrics patients or the hospital would lose its Medicare certification.

"You're staring at the near-death of your organization," the CEO told Menkes. Yet the CEO used the crisis as an opportunity to bring people together and improve things quickly. He was aware of the circumstances and calm under pressure in part because he had some experience with major challenges before.

"Crisis forces leaders to boil things down to the essentials of what really needs to get done in order to succeed -- and then to pursue those essentials with renewed intensity," Menkes writes in his book.

Menkes believes that anyone can develop and learn these traits. "It's absolutely learned…. The smartest person can be rendered stupid in the right set of circumstances," he says. If they don't learn to manage pressure and stress, they may lose their ability to lead or even think at a crucial moment.

Temin, the crisis management executive, sees many such executives. "Very few people have all the skills" to manage a huge meltdown, she says. Those skills include stamina, a clear view of the situation and "the ability to focus themselves full bore on the problems at hand."

Executives with honesty and "a spirit of improvisation" may do well under extreme pressure, she says. "That uncanny ability to improvise … gets you through a huge amount."

So how do executives develop into a calm problem solver and realistic optimist?

Some companies offer programs or assignments that help their managers develop these qualities, Menkes says. Such programs often increase a manager's responsibilities and pressure at a steady, measured rate. Others managers develop these qualities by themselves or with the help of a mentor.

Temin runs occasional "crisis games" with executives so they can role-play scenarios and discover how they react to upheaval.

Executive coach John Hamm says that managers should remember to recall what makes them talented and take the time to trust themselves and their team. As an executive coach, he sees managers collapse several issues into one large mess, so he often asks them to remove the emotion, the anxiety and start untangling things, bit by bit. He asks them to use facts to fight off fear. "How do we allow the pressure to call us to a higher ground?" he asks.

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