How a Leader Can Best Manage a Difficult or Tough Situation?

Leadership is most tested during tough situations yet for many developing leaders, the tendency is to avoid risk for fear of failure. But without some level of failure there is not learning. What can you do to gain the confidence in these situations so as not to make destructive choices?

Whether it's a sudden market downturn, internal conflict, or an operational crisis, how a leader responds often determines the success or failure of their leadership and the organization. Effective leadership in such situations requires emotional intelligence, strategic thinking, and a structured approach to problem-solving.

Here are some insights from my leadership and executive coaching that you may find helpful as a leader looking to best navigate difficult or tough situations. I've provided some research, insights, and actionable advice to help grow your leadership!

1. Emotional Intelligence: The Foundation of Crisis Management

Research from psychologist Daniel Goleman emphasizes the critical role emotional intelligence (EQ) plays in leadership. Emotional intelligence involves self-awareness, self-regulation, empathy, and social skills, all of which are essential in challenging moments. Leaders with high EQ can manage their own emotions and understand the emotions of their team, which helps in maintaining morale and focus under pressure.

Exercise: When faced with a difficult situation, a leader can practice "emotional labeling." This involves identifying and naming their own emotions—whether it's frustration, fear, or uncertainty. Acknowledging these emotions can help reduce their intensity and make it easier to remain calm and focused. Similarly, leaders can observe their team’s emotions and ask open-ended questions to gauge how they are feeling. Make time to observe and reflect on a regular basis which is one of the most overlooked forms of feedback. What worked that you could keep doing or do more of? What could you shift or do differently?

Key Insight: Staying calm and composed, while showing empathy, fosters trust. In high-pressure moments, people look for stability, and emotionally intelligent leaders provide that.

2. Strategic Thinking: Balancing Immediate and Long-Term Solutions

Tough situations often create a sense of urgency, but it's important for leaders to balance short-term solutions with long-term strategic thinking. According to research from Harvard Business Review, leaders who are effective in crisis situations adopt a dual-focus approach. They deal with the immediate problem while simultaneously considering its broader implications on the organization’s vision and goals.

Advice: To prevent tunnel vision, leaders should continually ask themselves and their teams:

• What is the root cause of this situation?

• What are the potential long-term consequences of the solution we're proposing?

• How does this align with our organization's values and objectives?

By using these questions, leaders can ensure that their decision-making remains aligned with broader organizational goals.

Example: During the 2008 financial crisis, many CEOs had to balance immediate layoffs with the need to retain talent for future recovery. Those who prioritized strategic talent management, like IBM and GE, emerged stronger post-crisis by focusing on long-term positioning even while navigating immediate challenges.

3. Adaptability: Embracing Change

Tough situations often involve unpredictability. The only certainty is change. Leaders need to demonstrate flexibility and openness to change. A study from McKinsey showed that organizations led by adaptable leaders were 4.5 times more likely to navigate disruption successfully. This means being willing to pivot from the initial plan when new information or changing circumstances dictate.

Exercises: Leaders can practice adaptability by engaging in scenario planning exercises with their teams. This involves thinking through various possible outcomes and creating contingency plans. It helps in preparing for uncertainty and ensures that leaders and their teams are ready to pivot when necessary.

Actively seek out other perspectives and experience by asking, what might you be missing in your thinking? what's the worst that could happen? what more information would be helpful?

Try asking others to take on a different mode of thinking to remove 'ego' from a discussion using an approach like the Six Thinking Hats, to redirect thoughts and the conversation. This gets others more comfortable with parallel thinking to embrace change instead of arguing positions.

Key Insight: Adaptable leaders foster innovation and resilience in their teams. They communicate that change is an opportunity, not a threat.

4. Decision-Making Under Pressure: Staying Analytical

In high-stakes situations, decision-making often suffers from cognitive biases like the recency effect or overconfidence. Research from Stanford University highlights the importance of structured decision-making frameworks, such as the OODA loop (Observe, Orient, Decide, Act), which helps leaders process information and respond systematically.

Advice: Leaders should focus on gathering facts, consulting trusted advisors, and avoiding rushed decisions. It's essential to keep the decision-making process transparent and involve key stakeholders to ensure buy-in. Slow down to speed up! Taking a little extra time to think and reflect reduces mental stress, calming your brain which allows for deeper thinking.

Example: Former Starbucks CEO Howard Schultz faced a tough decision in 2008 when he decided to close 600 stores to address declining sales. Despite criticism, Schultz relied on data and a clear assessment of market conditions, ultimately positioning the company for recovery.

5. Self-Care and Team Support: Sustain Performance in Tough Times

Finally, managing tough situations requires leaders to sustain their own energy and that of their teams. Burnout can cloud judgment and reduce the effectiveness of leadership. From my executive coaching experience, self-care is widely neglected by many leaders who are so focused on the business organization and other people, they under-estimate how self-care impacts their own mental and physical presence. How you respond is setting the tone for your entire team, as highlighted in the article, Staying Composed Under Pressure: How Leaders Set the Tone in Tough Situations:

“As a leader, it's essential to develop strategies for managing stress and maintaining mental clarity.”

Exercise: Leaders can schedule regular check-ins with themselves and their teams to assess stress levels, encourage breaks, and ensure a healthy work-life balance. Try a mix of formal (culture or pulse surveys, one-on-one discussions, scheduled self-reflection time) and informal approaches (daily check-ins, social events, fun team activities).

Questions to Consider:

How am I managing my own stress during this situation?

What can I do to support my team emotionally and physically?

How do we maintain a positive outlook despite the challenges?

Leadership in difficult situations isn't just about quick fixes; it’s about emotional intelligence, strategic thinking, adaptability, and sustainable decision-making. Leaders who navigate crises successfully do so by staying calm, thinking long-term, being flexible, and supporting both themselves and their teams. By practicing and developing these competencies, you can better tackle any difficult or tough situation with greater confidence and success.

Jerome Dickey, MA(Leadership), PCC, CPHR, Q.Med