Tuesday August 28 2012

Pull your team together in crisis management

By Richard Branson

When I was growing up in the south of England, we didn’t see a lot of snow, but after a big storm my father would always say, “There’s nothing like a good snowfall to get the neighbours talking to each other.”

He was right. Our neighbours, who usually kept to themselves, would be galvanised into helping each other to dig out their cars. I often heard similar tales from my grandmother about how everyone pulled together during World War II.

A more recent example of the power of teamwork is seen in the story of how James Mwangi, the 2012 winner of Ernst & Young‘s World Entrepreneur of the Year award, pulled Kenya’s Equity Bank back from collapse by smartly handling a crisis situation.

When Mwangi first took the reins as finance director in 1993, Equity was a small, insolvent building society (or a bank owned by its members) that was about to close down. Determined to save the business, Mwangi asked the staff to join forces with him in the effort to turn things around. He asked them to use their personal networks to encourage people to join the society.

Mwangi told the magazine Kenya Yetu that soon afterwards, he was able to issue a raise to employees. He also persuaded them to use 25 per cent of their salaries to buy shares in the company. “Now they were involved. It was as much their company as anybody else’s,” he said. “They knew that if they succeeded, they had a lot to gain.” Their new role as shareholders would have further inspired employees to work together as a team and build the value of their growing equity stake, paycheck by paycheck.

Mwangi’s strategy worked: The bank began to expand. In 2006, it was listed on the Nairobi stock exchange, and shareholder value increased rapidly. These days, Ernst & Young says, Equity Bank is the biggest bank in the region by customer base, with more than 7 million customers in Kenya alone. Mwangi has been CEO since 2004.

If your company is faced with a financial crisis, make your team part of the solution. Do not shut yourself into your office – get out there and tell your staff what’s going on. As you consider strategy, remember that indiscriminate layoffs, pay cuts and benefit reductions will probably make an already bad situation worse. Instead, enlist your employees’ support and get creative about rewarding them for their commitment to the company.

Your ability to foster a sense of teamwork can mean the difference between success and failure. When management fails to listen and respond to the concerns of front-line employees, they may turn to labour unions for help. Paradoxically, while unions are set up in order to give employees more clout with management, they frequently become an even greater roadblock between the two groups as relationships grow distant.

If you are leading a company where unions are established, it’s important to set up great communications with union leaders, especially in tough times. Unlike so many of its competitors, which seem to be constantly at odds with their unions, Southwest Airlines has avoided bouncing from one crisis to another partly because of the strength of their labor-management relationships. Herb Kelleher, the legendary leader of Southwest Airlines, and his successor Gary Kelly have led the company to decades of relentless profitability – and South west is one of the most heavily unionised airlines in the industry.

Of course, crises come in all sizes, and your employees have to be ready to work with each other on defusing small emergencies as well. A few years ago, when I was waiting at London Heathrow for a Virgin Atlantic flight to Los Angeles to take off, a small crisis emerged in the form of a long weather delay. There is absolutely nothing an airline can do about such events, but not every passenger sees it that way. I watched as one of our agents tried valiantly to placate an agitated male customer.

When she was done, I commented to the totally unflustered agent, ‘’Tough day, eh?’’ Her response was, ‘’No, not really. I actually enjoy days like this because we all really pull together as a team in keeping the passengers informed and comfortable, so you go home feeling you’ve put in a good day’s work. Days when everything works like clockwork aren’t nearly as rewarding – for us, at least!’’ (I was glad she added the last few words.)

Such connections between your people are built over time. This agent learned to rely on her team through her everyday work with friendly colleagues, by her manager’s listening to her suggestions and following up on them, and by management’s encouraging her supervisors to hold events that allow the agent and her colleagues to get to know each other outside the office. These small touches can add up to a team.

I never mentioned it to my father, but I noticed that as soon as the snow melted, the neighbours would quickly disappear behind their hedgerows again. Don’t make the same mistake at the office: Once the crisis is averted, don’t slip back into your old ways. Make sure you keep that wartime spirit of working together alive and well – it will help you through good times as well as bad.

Richard Branson is the founder of the Virgin Group.
Send questions to RichardBranson@nytimes.com.