4min chapter

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#147 Reid Hoffman: Better Decisions, Fewer Mistakes

The Knowledge Project with Shane Parrish

CHAPTER

What Happened During a Crisis?

The board meeting is a good place to get a sense of the CEO and management on top of it. You should have something of a, we've got a there's a big event. This is how we look at it. This is the questions we're asking. And so when it gets to crisis, you could say, well, for example, if it's a pandemic, it could be the,. We mean, we may need to respond much harder earlier.

00:00
Speaker 2
Walk me behind the scenes a little bit. What happened during a crisis at some of these board meetings? Is it standard operations? Is it different? What's going on during something like Koda 19 or financial crisis? Well, there's a
Speaker 1
couple things that are going on in crisis. One is you also it's a good place where you get a sense of, you know, is the CEO and the management on top of it. So for example, if you walk into a board meeting and there's a crisis and you're not presented in a way that's where there's a crisis and, and you know, we're doing a briefing for what the crisis is and kind of what our preliminary responses and thoughts are, what our analysis of the challenges are, then you, you know, have an issue. So if you walk into something and people are like, yeah, COVID, pandemic, whatever, you're like, no, no, the whole world changing. Because even though maybe in your particular thing, by the way, obviously, COVID had some tailwinds for some digital businesses, because then when we all had to kind of retreat home and work through our computers, you know, is everything from obviously, you know, Zoom and Netflix and games, all kind of like, you know, suddenly, massively increase in the amount of time they are. But even then you say, okay, got to understand what that is. And you can't necessarily predict that as a new normal forever. That that's the former crisis you always hope for. But then there's obviously, like, even when you say, well, the business, it hasn't really shown up in my numbers yet, but like industries are collapsing supply chains are collapsing levels of stress with with society is going through the roof, right, uncertainty about. And so how does that all play? So you should have something of a, we've got a there's a big event. This is how we look at it. This is the questions we're asking. And so part of the thing that you do as a board member is you bring in the, like, for example, one of the, I think the personal objectives I always have that I also recommend to the board members is to say, well, make sure that you bring at least one really important question that the company may not be thinking about and bring one new thing from the outside world that could be very helpful to the company. And that's kind of the minimum contribution per board meeting, because if you're not, you know, kind of doing that, then you're not proactively thinking about the company when you're outside, you're not bringing what you can uniquely bring. And so when it gets to crisis, you could say, well, for example, if it's a pandemic, it could be the, we mean, we may need to respond much harder earlier, because one of the things that's generally good practice, if you think something is trending in a direction, like a business is trending towards collapsing, you know, cut it off early, right? Like it's part of how you survive and thrive in businesses is to make judgments early on this stuff. So you might say, that might be the thing, or you might say, actually, in fact, it seems like the world is, you know, kind of on fire and blowing up. But actually, in fact, we can, we can navigate the following way to make it into one opportunity. How do you convert the business to the new reality? And so, like, for example, one of the more delightful microcosms was a restaurant just opening, you think they're hosed, they made it, they turned it into a takeout windows, right? They went, okay, right? People are still gonna want to have good food that they don't have to prepare themselves. They're just not going to come into the restaurant. So how do we, how do we operationalize for that in a really good way? And that kind of pivoting. And that might be another thing you might bring in. And so, those are the kinds of things that you look at when you're looking at, you know, how to help, you know, kind of both the governance and the help navigation on boards when you encounter things like crises.

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