How to Lead Your Team Through a Crisis

The ability to lead becomes incredibly apparent during times of crisis. The 2009 global financial system meltdown is a good case in point. Watching good and bad leaders during times of crisis provides us with lessons on how to act when faced with our own moments of crisis.

As a leader, there are critical attributes that you need to master in order to successfully navigate you’re your team and organization through the turbulence of a crisis into the tranquility of a stable environment.

These attributes are:-

i. Ability to stay calm

Who wants to have a leader who panics in times of crisis? To be an effective leader, you need to learn how to detach yourself from the emotions of the daily ups and downs of life. This is a fundamental characteristic of a strong leader in times of crisis. Consider relinquishing your leadership mantle to someone else if you get struck by bouts of panic during times of crisis

ii. Ability to identify and fix the pressing problem

It is not wise reacting to symptoms of a problem without getting to the problem itself. As a leader, you need to accurately diagnose the root of the problem and fix it. Time is very critical during a crisis. Sometimes there may be need to deal with the symptom because of the present impact. However, you must never cool off and stop at this. You need to dig deep into the root problem and solve it.

It is important to deal as much as possible with facts rather than opinions. When you are trying to project what may happen in the future, consider seeking the opinions of many especially those who have a good track record of understanding how the forces at play are likely to interact.

iii. Ability to consult and seek advice

Conventional wisdom demands that you seek advice especially when a crisis checks in. During this time, unintentional results of your actions can have a more immediate impact. You should draw a line between seeking advice and seeking a consensus. It is advisable that you decide solely rather than jointly. Before making a decision, you need to have the facts about the crisis and the potential aftermath of actions or inactions observed from as many viewpoints as possible.

iv. Ability to think strategically

In time of crisis, thinking about big issues while letting smaller ones look after themselves is absolutely critical. You need to get the right big picture rather than getting the big picture absolutely right. This is the time to make a decision about the right things, of course without forgetting the importance of the executing detail.

v. Ability to be authentic

You can not afford to posture when you are in a crisis. It is time to say what you mean and mean exactly what you say, period. Never let your team take a second guessing what your intentions might be. Clearly say if you are taking a calculated risk or are not sure about the answer. Use clear and simple language as obtuse language has a tendency of leaving people confused besides opening your message to various interpretations.

Be conscious about your body language as well since a feeble look will cast doubt on your level of conviction and ability to see a crisis through.

vi. Ability to communicate

Talk it all to your team. Inform your team about what you know, what you do not know and what you are doing about what you must know. Tell your team about your decisions and why you make them. Reiterate your message as saying it once may at times not be enough. Use all effective mediums as well as different communication styles to ensure that as many people as possible get the correct message.

Prerequisites in Stocks Investing

Some people think that investing in stocks is as easy as going to a 7-eleven convenience store and buying what you want. However, in my opinion, to be able to become successful in investing in stocks you need to have a proper knowledge and proper discipline. Based on my own experience, below are the 7 prerequisites that you need to do before venturing in stocks investing:

1. Put your finances in order

I remember one of my friend asked me, “How can I invest in that “stock” thing that you’ve mentioned? I’m really interested in trading stocks to earn money. But first, can you lend me some money because I used up my salary in buying a new netbook and I need to pay my electricity bill …”

Imagine! How can someone think of investing in stocks when he can’t even prioritize his expenses. People who invest in stocks without proper financial plan will either end up more broke or in jail. Reason is because they are the one that gets emotional and panic during the bear market and loses money. Also beware of turning the stock market into online casino as it can be addicting and like any gambling will result to losses. If you’re in debt and you’re living hand to mouth, you should first make a budget plan and payment plan to reduce/eliminate your debt by prioritizing expenses and cost cutting. Only once you are out of chaos then you can proceed to the next step.

2. Save money consistently and religiously

Saving money is actually a co-requisite and/or integrated to your debt-payment and budget plan mentioned in number 1. The “Pay Yourself First” mantra that you’ve always heard is true and effective. And when I say “save money religiously”, I literally mean you need to do it as if it is a mortal sin not to save money. Make frugality a habit and you are guaranteed of achieving the wealth that you have been dreaming of. In any investment, money is needed either for capital or perhaps for your personal needs while waiting for the result of your venture so there’s no such thing as starting business at absolute zero capital. (or maybe there is … in Neverland).

3. Create an Emergency Fund

Emergency Fund is a reserved money that you can use in case of emergency like accident, sickness, death, losing your job, or anything that you can define as emergency. I’m not trying to scare you but things like these are not impossible to occur.

Stock investing should be long term and so I always tell my friends to invest only spare money or money that you will not need in the near future. To be more objective, you can invest money that you will not need in the next 5-10 years or even longer. If you have an emergency fund, this will serve as your cushion to protect you during emergency without forcing you to sell your stocks at a loss. Having this fund will also keep your sanity no matter what happen to the market be it bear, bull, pig or any animal type of market. Here in Korea, it is common to hear news about people committing suicide during the 2008 financial crisis so keep this step a must. In my case, I put up an emergency fund that is equal to my annual expenses. Consensus dictates at least 6 months worth of your living expenses.

4. Study about Stocks and Financial Management

There are a lot of technical words or trading jargon in the stock market world and it is important to learn it to avoid mistakes. In my history of stock investing, the first and only loss I incurred is when I bought MEG without understanding about warrants. In addition, you need to be savvy in personal finance management since stock investing is just part of your portfolio. As a golden rule in personal finance, don’t invest everything in stocks. You should consider bonds, money market, mutual funds, real estates and etc as other instruments of diversification and be the expert yourself in optimizing your risk and return.

5. Know the listed companies

The common mistake of investors is investing in ticker symbols and their corresponding charts. They didn’t even know what is the business of those companies. (Heck, they didn’t even know what the ticker symbol stands for!). I tried to study technical analysis before but all I see was unpredictable trend of stock price. Maybe I was wrong, but relying solely on charts for stock picking are nothing but a logical fallacy wherein all people say “this shit is expensive and precious so you should buy it”.

If you go back to the definition of stocks, stocks are pieces of a business. If this is the case, it is only rational to know whether the stocks you’re buying is of the companies that are profitable and well manage. However, some people only want to earn big time without exerting effort and so engaged to the “Bigger Fool’s Game” in stock market. You could earn from this game but one day you will become the Biggest Fool of them all.

How to learn these companies? Visit the company websites or download and read the latest financial statement. Yes I know that it is time consuming but nothing is free in this world. Also, you don’t need to read the financial statement from cover to cover but focus on the operation and financial discussion. In fact, in my analysis, only 5% of these hundred pages are only needed to be able to get the full grasp of the company situation. I will discuss about financial statement in my future post.

6. Practice first without using money

If you’ve done the first 5 steps, then you are almost there. However, just like in sports you need to do some practice first before the actual event. What I did during that time is I do dummy trading without money using the PSE Stock Trading Game. This is free and all you have to do is to sign-up and start trading with virtual money worth PHP 1Million (again, it is just a dummy so don’t get carried away).

The point of this exercise is to acclimatize yourself in trading without the risk of losing money. It is a vital step for me that I integrated with Step 4. Interestingly, after more than 1 year when I stop playing the game, when I check again my dummy trading account, my portfolio earns more than my actual portfolio. This prove that investing in long term without emotional intervention is more profitable technique than daily monitoring the market … it was a lesson learned.

7. Open a trading account

The final step is to open your trading account. My suggestion is to choose only the brokerage that has a tie up with your bank. This will make your fund transfer more convenient and also it is less risky than the fly-by-night brokerage company. If you have questions about opening a trading account feel free to ask questions or visit the website of your brokerage company.

10 Crucial Steps Out of Crisis

A crisis is defined as a time of intense difficulty or danger. In the case of diseases, it is the turning point of a disease, when it becomes clear whether the patient will recover or not. It is evident in the definition that a crisis is not a desirable state. One would choose not to have to solve a crisis and a live a crisis-free life but that is not possible. Daily you meet crisis of varying shapes, forms and proportions. Some are individual (affecting you personally) and some are of a national or global coverage such as the ongoing fight with the AIDS epidemic. The goal is to find the quickest and most effective method of bringing the state of affairs back to normal. This alone explains the efforts from every sector of the world, be it donor community, research scientists, governments and corporate to bring a lasting solution to this one type of crisis. Your crisis may not be as prevalent as the epidemic but the fact remains that it is state you would desire to move out of. I have faced crisis after crisis in my life but I have emerged out of every crisis sharper, wiser and more experienced. Some of the crisis I faced taught me endurance, persistence, optimism and courage. While crisis situations have a lot of life lessons, one would not desire to first see a crisis then learn but learn anyhow from other people’s crisis. How does one get out of crisis? I answer the question from what I have learned under crisis below.

The Steps

1. Acknowledge that you have reached crisis point – It is not a sign of failure to acknowledge the state of affairs as it is. After all there is no situation that cannot be turned around either deliberately or by way of miracles. Simply declare that this is crisis level. Failure to acknowledge may derail the exit into normal mode as everyone feels it is business as usual. Make every citizen or employee know the nature of the crisis and how it affects them. Alcoholics that refused to say the statement “I am an alcoholic” fail to move out of alcoholism. Non admittance is living in denial of the facts even though they are as clear as noonday. Your affirmation will then change at a later stage as your affirm the new you. Acknowledgment is for the purpose of finding the help you require.

2. Establish the nature and category of crisis – Who is affected by the crisis? What is the general extent of the crisis? Is it affecting just the households next to you or it has become an epidemic of high proportions. The extent and nature of the crisis determines the response strategy. Life threatening crisis requires faster movement; move by instinct and save the life under threat. By establishing the extent of the crisis you are able to determine the level of reporting back and human resource mobilization to help ease or end the crisis. Every crisis is unique, every problem is different. You will not prescribe the same medication on a persistent migraine as you would on a minor headache.

3. Identify the root causes of the crisis – To know the cause of a disease is certainly half the cure. It does not benefit you to fight flames in a fire as opposed to closing the container that is fueling the fire. Similarly in crisis setups, problems and conflict and anxiety may all be flames. You need to know why the organization or country is where it is. Be frank with the reasons why. If you shy away from the actual reasons it maybe a total waste of valuable time. Put all the cards on the table, undress the crisis breaking it into the individual components that originated and grew the crisis. You will realize that the power of a fire is not high up on the flames but way low at the bottom where it is coming from.

4. Stop Creating Comfort in the Crisis – It is easy to acknowledge you are in a crisis and immediately find coping mechanisms in the crisis. By so doing you make everyone feel as if there is no crisis. It is the same as knowing that a person has a serious cut on the leg and is in excruciating pain then you give them the highest dosage of pain stopper. You may stop the pain momentarily but that does not disqualify the cut. Simply put; you have created temporary comfort in the crisis but you still have to face the real crisis you are hiding under the carpet.

5. Get Ideas from your team – As a leader you may not be the only one to prescribe the way out of the crisis.
You may not be the cause of the crisis after all. Your role is to get everyone to see the same thing and talk the same language. Bring people to a place of unity so that they actually take ownership of their situation. As long as you give yourself the burden of getting everyone out of the crisis, you may easily fight a losing battle as people may delay your exit strategy. Some may be benefitting from the crisis hence they stifle your efforts. A brilliant idea maybe hidden in the most unlikely team member, much lower on the structures of power.

6. Plan your exit from crisis – As discussed above, sometimes the crisis situation maybe a matter of life and death with the going of every minute threatening the life of people, in such a scenario there is no room for board meeting, or consensus. Movement is by instinct not according to an activity planner. Careful planning of the precepts and phases of the exit from crisis is important. Document every step, on each step you need to identify who is responsible and give the person a clear mandate of why their role is important. Get strategic thinkers to test your plan and identify loopholes. A plan is as strong as its weakest point. Test before you plunge or else you waste more time and money. Some solutions make increase the extent of the problem.

7. Get expert advice and help – If you do not have the skills necessary in your team or country, look beyond
your area. Call for specific people with specific competencies to come in. Calling in technocrats with the right experience in dealing with the issues will sometimes cost you less in terms of loss or damage than creating make-shift solutions which in actual fact have expiry dates. You may not have the liberty to experiment or try out amateur level solutions. Specialists are there to provide specialist services. Some of them have studied on the very subject to the highest level of study possible.

8. Revisit your financial priorities – Your crisis may not be related to finance but every crisis has an impact on your finances. You have to prioritize your expenditure in the direction of bring a normal environment back. All payments in line with bringing order and effectiveness are a priority. You may need to make sacrifices that affect a greater majority. This is the reason why everyone must be engaged to take ownership of the problem. As long as it remains the role of leaders to create a miracle out of a solution, followers will always want their luxuries as they may not share or buy-in to what leaders are doing even though it benefits them.

9. Execute your plan – Implementation – Most solutions look workable on paper. They sound good and practical until the real implementation is due. You may have run a pilot of the solution, you may have people’s buy-in and all the necessary plans in writing but if you do not carefully implement all you have purposed, the solution becomes a “nice to have”. Get everyone to account for whatever role they were given. Call for regular meetings to review progress, budgets, human resource gaps etc. Without a follow through, the crisis will rage on.

10. Communicate & Review Progress – You can never be accused of over communication. If anything sometime we put a lot of effort in creating solutions, we implement the solutions and forget to communicate the success stories and even areas where we are failing. Without adequate communication and review of progress, people will easily be discouraged thinking that they are not making any headway in redressing the crisis. Reviews and updates will keep everyone motivated and inspired. In the whole process you need to document everything for others to use the same notes as reference points in the future.

House on the Sand

Jeremy Leggett, a former oil man, wrote an article in ‘The Independent’ (20/1/06) entitled, ‘What they don’t want you to know about the coming oil crisis.’ He wrote:
‘A spectre is haunting Europe – the spectre of an acute, civilisation-changing energy crisis. … We have allowed oil to become vital to virtually everything we do. Ninety per cent of all our transportation, whether by land, air or sea, is fuelled by oil. Ninety-five per cent of all goods in shops involve the use of oil. Ninety-five per cent of all our food products require oil use.’

The world consumes more than 80 million barrels of oil a day, 29 billion barrels a year. This figure is rising fast, as it has done for decades. The US government expects that global demand will grow to around 120 million barrels a day, 43 billion barrels a year, by 2025. However there is no way that the oil industry can produce this amount of oil. Leggett says, ‘The most basic of the foundations of our assumptions of future economic well being is rotten. Our society is in a state of collective denial that has no precedent in history, in terms of its scale and implications.’

The modern industrial world has been built on the supply of energy keeping the electricity supply to our homes and work places running and fuelling our transport system which ensures that goods and people can move from place to place around the world. Without the energy sources – coal, oil, gas and nuclear power – the whole system crumbles.

In America that possibility is beginning to be considered by those who see the phenomenon known as ‘Peak Oil’ as the next big threat to the western way of life. Peak Oil is the point at which oil production reaches a plateau before it declines while demand for oil consumption continues to rise. Once worldwide demand for oil outpaces worldwide production (of oil by a significant margin the price of oil will sky-rocket, oil-dependent economies will crumble, and resource wars will explode.

Matthew Savinar has written an article on this subject on the internet site []. He writes, ‘Civilization as we know it is coming to an end soon. This is not the wacky proclamation of a doomsday cult, apocalypse bible prophecy sect, or conspiracy theory society. Rather, it is the scientific conclusion of the best paid, most widely-respected geologists, physicists, and investment bankers in the world. These are rational, professional, conservative individuals who are absolutely terrified by a phenomenon known as global ‘Peak Oil’.’

When will this happen? According to Savinar, ‘Some geologists expect 2005 to be the last year of the cheap-oil bonanza, while many estimates coming out of the oil industry indicate ‘a seemingly unbridgeable supply-demand gap opening up after 2007,’ which will lead to major fuel shortages and increasingly severe blackouts beginning around 2008-2012.’ Richard Heinberg, in his article ‘Smoking Gun: The CIA’s Interest in Peak Oil’ says ‘A growing consensus of petroleum geologists places this event in the mid-range period of 2006 to 2015.’

Savinar dismisses alternatives to oil as sources of power for the current world system as fantasy. Green alternatives like solar, wind and wave power produce only a tiny fraction of the power now available through oil. Hydrogen as an alternative to oil does not work either due to the huge costs of producing it and the vast problems of storing it. He says there is no time to develop the huge infrastructure needed to switch from an oil based industrial system to an alternative one. Nor is there the political will or the financial capability.

Savinar sees an inevitable collapse of the US economy coming which will drag down the rest of the world. ‘As the driver of the world’s economy, the demise of the US will take down other industrialized countries. The financial dislocations wrought by the coming oil shocks could set the stage for a series of destabilizing resource wars and ‘currency insurgencies’, in much the same way Germany’s financial meltdown during the Weimar Republic of the 1920s set the stage for the rise of Third Reich in the 1930s and World War II in the 1940s.’

Added to all this is the fact that the present suppliers of most of the world’s oil are anything but reliable. 70% of global proven reserves of oil are to be found in the Middle East. Saudi Arabia has the world’s largest reserves with 264.2 billion barrels of proven oil reserves (25% of the world total). Oil from this area is the easiest to extract and export. Recent finds of oil in the Caspian Sea area and in Central Asia are not as great as was originally hoped and these areas are landlocked so getting the oil out involves building pipelines through such unstable regions as Afghanistan to the south or the Caucasus region to the west. The vulnerability of pipelines to terrorism has been shown by the frequent attacks mounted by insurgents in Iraq.

A disruption anywhere could cause market panic and spiralling prices. Texas oil analyst Matt Simmons has written a book ‘Twilight in the Desert’ which warns that the skyrocketing price of oil could plunge the world into war. One spark which could ignite this fire is Iran’s nuclear programme which is causing worry about possible disruptions of the supply of oil from the Middle East. In January 2006 Iran threatened to cut oil supplies if Europe continued to meddle in what it sees as its right to develop a nuclear programme. It has also threatened to block shipping through the Straits of Hormuz at the entrance of the Persian Gulf if its nuclear facilities are attacked. Every day, 15 million barrels of oil pass in tankers through these narrow Straits.

Production of oil is in decline in more than 50 oil-producing nations, including the USA and Britain. Discoveries of large oil fields are decreasing year by year, while the demand for oil is constantly increasing. In particular China and India are already having a major impact on both oil resources and the environment on account of their huge populations and growing numbers of people prospering as a result of economic development. There have been large finds of oil in Russia with deep wells sunk in Siberia. However Russia could well prove an unreliable source of supply.

January 2006 began with a crisis caused by Russia demanding a huge increase in charges to Ukraine for its gas supply and threatening to cut supplies if the price was not paid. Many saw this as Russia punishing Ukraine for its pro Western policies. But the threat to turn off the gas supplies in the middle of winter did not just affect Ukraine. For a few days countries across Europe watched nervously as the crisis unfolded.

The deputy chairman of Gazprom, the giant Russian company that controls the flow of Russian gas to the west came to London to reassure Britain that there would be no risk of disruption to British gas supplies. The very next day, temperatures in Moscow broke a 50-year record, plunging to minus 30C. Gas normally exported was diverted to the home front. Supplies to the West fell. Nervousness on this subject was increased by news reports that Gazprom is seeking to buy a controlling share in British Gas.

As huge price rises for gas supply are announced, the prospect of the source of this supply being in the hands of a power which once confronted the West during the Cold War is hardly reassuring. After all Russian President Putin once wrote a thesis saying that Russia could use its energy resources to regain its global power. Russia supplies a quarter of all the gas used in Europe and 90% of it flows through Ukraine. This supply is scheduled to increase when the giant pipeline now being built under the North Sea from Russia to Germany is completed. Britain will be at the end of the line for this gas which will become vital as our North Sea oil and gas decline.

A crisis caused by oil resources being cut off or a huge surge in the price of oil and gas could plunge the world into chaos. The Bible prophesies such a time coming at the end of this age and compares it to the birth pangs of a pregnant woman. In 1 Thessalonians 5.1-3 Paul writes: ‘But concerning the times and the seasons, brethren, you have no need that I should write to you. For you yourselves know perfectly that the day of the Lord so comes as a thief in the night. For when they say, ‘Peace and safety!’ then sudden destruction comes upon them, as labour pains upon a pregnant woman’.

When a woman goes into labour a process begins which will lead to the birth of the child. She knows the signs of the impending birth are taking place, but she does not yet see the child and she does not know how long the process will go on for. Today the signs of the second coming of Jesus Christ are taking place – not just some of them but all of them. We do not know how long it will be before the crisis we are describing in this article explodes across the earth, but there is no doubt that it will. When it does the world will enter a period of time described in the Bible as the great tribulation. Jesus describes this period in Matthew 24.21-22: ‘For then there will be great tribulation such as has not been since the beginning of the world until this time, no, nor ever shall be. And unless those days were shortened no flesh would be saved; but for the elect’s sake those days will be shortened.’

Anyone can see that our society is built on shaky foundations. Modern technological society lines up with the well known words of Jesus:

‘Whoever hears these sayings of mine and does them, I will liken him to a wise man who built his house upon the rock; and the wind descended, the floods came, and the winds blew and beat on that house; and it did not fall, for it was founded on the rock. But everyone who hears these sayings of mine and does not do them, will be like a foolish man who built his house on the sand; and the rain descended and the floods came and the winds blew and beat on that house; and it fell. And great was its fall.’ Jesus speaking in Matthew 7.24-27.

Sooner or later the storm will come and this house will crash. What will happen to you and me then? The world situation today is pushing humanity towards an unprecedented crisis in human history which will affect all nations of the earth and bring the possibility of the end of all life on earth if God did not step in through the return of Jesus ‘shortening’ those days and bringing the time of human mis-management of the planet to an end.

Despite all this there is a glorious hope for the future. Jesus said ‘When these things begin to happen, look up and lift up your heads, because your redemption draws near.’ Luke 21.28. These things have begun to happen so we should look to the return of the Lord Jesus as the hope for the world. While people without faith are described by Jesus as experiencing heart failure for fear at the things which are coming on the earth (Luke 21.26), the believer has a totally different expectation: ‘We should live soberly, righteously and godly in the present age, looking for the blessed hope and glorious appearing of our great God and Saviour Jesus Christ.’ Titus 2.12-14.

As the lights go out all over the world, the light of faith and hope in Jesus will never go out in the heart of those who really believe in Him. In order to escape the coming collapse of oil based industrial society, Mr Savinar, in the article already quoted suggests that people should ‘relocate to an area as least vulnerable to these issues as possible’. But for many people that will not be a viable option and it will not save you anyway. As in the days of Noah there will be no escape.

But the Lord has a plan to relocate His people: ‘For the Lord Himself will descend from heaven with a shout, with the voice of an archangel, and with the trumpet of God. And the dead in Christ will rise first. Then we who are alive and remain shall be caught up to meet the Lord in the air. And thus we shall always be with the Lord.’ 1 Thessalonians 4.16-17.

This event, known as the Rapture of the Church, will take place unexpectedly and unannounced like a thief coming in the night. At that moment those who are saved will be taken to a place of safety before the judgements fall on the earth in the great tribulation period.

In the light of all this there is only one hope for the world. The return of Jesus. The human race has blown our chances of saving the world by ourselves already.

The world system today will not stand because it is on the wrong foundations. But when everything else is shaken, God’s kingdom cannot be shaken. In order to enter God’s kingdom Jesus says ‘You must be born again’ (John 3.7) not physically but spiritually by turning from sin and unbelief to faith in God who raised Jesus from the dead when He had paid the price for our sins and will raise with Him all who put their trust in Him.
If you have not yet made that step I urge you to do so without delay. Here is a prayer which you can say to accept salvation through Jesus the Messiah.

‘Dear Heavenly Father, I admit that I am a sinner and need your forgiveness. I believe that Jesus the Messiah died in my place, shedding His blood to pay for my sins, and that He rose again from the dead to give me eternal life. I am willing right now to turn from my sin and accept Jesus the Messiah as my personal Saviour and Lord. I commit my life to you and ask you to send the Holy Spirit into my life, to fill me and to take control and to help me become the kind of person you want me to be. Thank you Father for loving me. In Jesus’ name, Amen.

Much of the information in this article is taken from a new book written by Tony Pearce, ‘The House on the Sand’.