Leaders Must React

During my many years as a professor of leadership, I’ve been asked one question more times than I can count: Can leadership actually be taught? I usually respond with a well-rehearsed answer: Much like athletic prowess or musical talent, people’s innate capacity for leadership varies. But just as good coaches and teachers can help athletes and musicians realize their full potential, good educators can help people become better leaders. To do that at Harvard Business School, we draw heavily on John Kotter’s framework, which breaks a leader’s job down into three key functions: articulating a compelling vision, aligning people around it, and motivating them to execute it.

After listening to that answer, a prominent leader challenged me: “That’s a useful theory you’re teaching, but you’re missing something that makes or breaks leaders—something that’s much harder to teach. It’s how they react in real time to events they can’t anticipate.” He was referring to leaders like Volodymyr Zelensky of Ukraine. No one would have called him a visionary, and because of his inexperience, many were skeptical of his abilities. But how he responded to Russia’s invasion of his country made him a hero. Jimmy Carter, on the other hand, may well have been a visionary president, but he was undone by the Iran hostage crisis.

Leadership, my interlocutor concluded, is defined as much by how well people respond to unfolding events as how good they are at driving an agenda. “You’re teaching only half of what leaders need to learn,” he told me.

In 2018, my colleague Michael Porter and I published a study of how CEOs spend their time, which confirmed the validity of that argument. We tracked the activities of 27 large-company CEOs in 15-minute increments, 24 hours a day, for 13 weeks and found that, on average, CEOs spend 36% of their time in reactive mode, responding to unfolding events. This is an enormous commitment—hours they would probably prefer to devote to advancing their plans, helping their companies hit their goals, and strategically shaping their firms’ future.

The term “unfolding events” encompasses a broad range of issues that eat up a CEO’s time. They can be externally driven—like fluctuations in stock price; surprise moves by competitors, suppliers, and regulators; or macroeconomic developments such as rising interest rates or major geopolitical changes. CEOs also continually face unforeseen internal events: workplace accidents, employee unrest, sudden resignations, just-discovered product flaws, and the unpredictable reactions that stakeholders—from the board and the leadership team to workers on the front lines—can have to things they hear or see.

Many CEOs I advise struggle with the fact that unexpected events consume such a large chunk of each workweek. They worry that they’re spending too much time in reactive mode and feel that their days have a Sisyphean quality to them. Yet they can’t seem to break out of this pattern. I have experienced this challenge while running organizations myself.

To help leaders better understand which issues truly need their attention—and which do not—I have created a two-by-two matrix that categorizes events according to two dimensions: how they initially present themselves (whether small or large) and how significant they will become over time. (It’s somewhat similar to the Eisenhower matrix, which categorizes events by their current urgency and importance. My matrix, however, considers how events may evolve.) In this article I will describe how CEOs can determine which category issues fall into, craft appropriate responses to them, and communicate their priority to the rest of the organization.

The Reactive Management Framework

My matrix contains four quadrants: normal noise, clarion calls, whisper warnings, and siren songs. Let’s look at the kinds of events that belong in each one and how leaders should approach them.

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Normal noise:

Small issues likely to remain small.
The leader’s task: Don’t get drawn in.

A certain level of unpredictability and variability is natural in any organization’s internal and external environment. This generates a constant stream of positive and negative issues that demand attention—what we might think of as normal noise. Minor incidents, such as modest budget deviations, periodic customer wins and losses, execution hiccups, routine fluctuations in stock prices, mixed feedback from stakeholders, and flare-ups of human emotions fall into this category. Most of these things don’t warrant the leader’s intervention or any disruption of ongoing practices.

CEOs must learn not to get distracted or drawn in by noise. They should trust their organizations to handle these events and try to resolve to treat them as routine. Although it’s best for leaders to avoid getting personally engaged, they will benefit from adopting the motto “Trust but verify.” Even with seemingly trivial matters, they must ensure that anomalies don’t go unnoticed. By occasionally checking that the organization is responding appropriately, leaders can prevent problems from being neglected and becoming bigger headaches. That might involve periodically tuning in to customer feedback, reviewing employee sentiments on platforms like Glassdoor, or finding other ways to take the pulse of the organization.

Clarion calls:

Significant issues likely to remain significant.
The leader’s task: Be all-in.

Occasionally, events and problems that can have a huge impact on an organization’s operations, reputation, and financial standing announce themselves loud and clear. Crises, such as catastrophic product failures or deadly accidents, unmistakably fall into this category. Major macroeconomic events, such as the geopolitical tensions arising from the Ukraine war or regulatory moves like antitrust suits or bans on products sold to China, are other examples.

At Harvard Business School we teach several case studies on clarion call situations. The Volkswagen emissions scandal, the result of deliberate test manipulations, had broad financial and reputational fallout and demanded concentrated CEO action. BP’s Deepwater Horizon oil spill and its failed CEO response, Cambridge Analytica’s misuse of data from Facebook (now Meta), and Boeing’s fatal 737 Max accidents were all clarion call moments. During them each company’s leadership team’s priorities shifted toward managing the immediate situation, and most other functions were temporarily deprioritized. The shared lessons from these cases: It’s critical for leaders to get personally involved, and they have to get all hands on deck as well. It’s important for them to avoid the temptation to retreat into themselves, because they’ll need the information, ideas, and resourcefulness of others. But they should remain aware that other people have their own agendas. (Marketing teams focus on optics, legal teams aim to minimize liability, and so on.) In clarion call situations, leaders must always keep a hand on the steering wheel and lead the organization forward. They must show empathy for the people affected by events but also find ways to navigate the stress, anxiety, and other emotions they may personally feel. Most crucially, throughout the process, they must focus on doing what is right (aligned with their organizational and personal values) instead of feeling pressured into doing what feels safe.

Although it may sound counterintuitive, in some aspects leading in clarion call situations is less challenging than leading in situations that fall into the other categories. They are the easiest kind of event to identify, and because their seriousness is obvious, it takes much less effort to mobilize the organization to respond to them. Ordinary constraints (such as limited budgets) may be lifted in an existential crisis. A CEO also doesn’t worry if the time spent managing it is worthwhile.

Whisper warnings:

Small issues that might become significant.
The leader’s task: Nip them in the bud.

Within the unpredictable flow of organizational issues is a unique category of challenges: those that initially appear minor but have the potential to morph into major concerns. For leaders, this is the most dangerous kind of event. It can be easy to dismiss or mistake a whisper warning as normal noise—and fail to recognize the likelihood that an issue will escalate into a substantial threat. Perhaps the most famous example of this occurred in the months before 9/11, when U.S. intelligence agencies received various tips about suspected terrorists enrolling in flight schools and an imminent attack involving airplanes. Still, officials failed to connect the dots or recognize them as more than run-of-the-mill intelligence chatter.

Whisper warnings can take various forms. They might be emerging competitors that could disrupt market dynamics, murmurs of employee dissatisfaction, nascent regulations with the potential to widen in scope, or seemingly insignificant operational inefficiencies that could balloon if unchecked. Quite often, major product or safety failures start as whisper warnings. In the mid-1990s plaintiffs’ attorneys began filing lawsuits alleging that the tread on Firestone tires on Ford Explorer SUVs tended to separate at high speeds, causing accidents. Several dealers, insurance agents, and other players received isolated reports of problems during those years. But the larger problem remained hidden until 2000, when media reports made its scope clear. Over time the defective tires were implicated in 203 deaths (most of which occurred after the earliest whisper warnings) and caused significant reputational damage to Ford and Firestone. Leaders who were more attuned to whisper warnings might have reacted earlier.

Leaders need to pay careful attention to small signs of discontent that have the potential to fester and grow.

Cultural crises also often begin with whisper warnings. Many leaders ousted for #MeToo misbehavior had been subject to quiet allegations for years. At Uber signs of an arrogant, we’re-above-the-rules attitude and a toxic culture were evident before Susan Fowler, an Uber engineer who’d quit, wrote a 2017 blog post putting them in the public eye. She recounted being sexually harassed by her supervisor and experiencing an egregious lack of support when she reported his behavior to HR. The ensuring uproar led to the ouster of Uber’s cofounder and CEO, and it took the company years to rebuild its culture and reputation.

Leaders need to pay careful attention to small signs of discontent or distress that have the potential to fester and grow, especially among members of the board or the senior team or employees at large. When they crop up, the best approach is to act quickly and nip problems in the bud. With most whisper warnings, you can take steps to mitigate the situation before it explodes into a crisis. Whether by announcing a voluntary product recall, pulling the proverbial Andon cord on a quality or safety issue, firing a toxic executive, or reaching out to talk to someone who is upset, leaders who respond early are more effective at tamping down simmering issues. Developing contingency plans to address potential escalation can also be helpful, as initial preemptive actions don’t always work.

While every whisper warning doesn’t warrant a CEO’s undivided attention, discerning which minor issues could become much more troublesome is a form of judgment that defines effective leaders.

Siren songs:

Significant issues that are likely to diminish over time.
The leader’s task: Don’t overreact. Watch and wait.

In The Odyssey, alluring sirens sing to passing sailors, tempting them onto the shoals and into shipwrecks. Today many things likewise draw people in but are ultimately deceptive and destructive—forces that must be resisted. These siren song events appear significant at face value—and often prompt CEOs to clear their calendars. Over time, however, their urgency fades, and in retrospect the energy a leader puts into dealing with them yields little return. Worse, in some such situations, a leader’s response is like oxygen on a fire and turns a small flame into a conflagration.

Apple’s “Antennagate” is a classic example of a siren song. Soon after the 2010 launch of the iPhone 4, customers began reporting that when the device was held a certain way it dropped calls. The tech media pounced—yet CEO Steve Jobs astutely discerned that the issue was temporary. He addressed it while making it clear that he wasn’t very concerned that it would dent Apple’s core value proposition. Another example is the launch of Microsoft’s Vista operating system in 2007. Vista was widely panned as slow and buggy and failed to gain market share. Rather than getting dragged down, the company deftly pivoted to more-successful product introductions without letting Vista’s problems swamp the leadership team’s focus.

In 2015, Starbucks was widely ridiculed for its attempt to spark a nationwide conversation on race relations by writing “Race Together” on every customer’s coffee cup. Yet its leaders didn’t overreact, and the furor quickly faded.

Though such situations can generate headlines and internal angst, leaders must recognize that the initial assessment of their significance doesn’t always correspond to their long-term impact on company performance. The key to siren song situations is equanimity. Learning to watch and wait is essential. It can be helpful to sleep on a matter for a day or two and let the steam blow off to see if things calm down. More time often allows more information to come in—which can be extremely valuable. Staying informed is paramount, but overreacting can be counterproductive, as it can inadvertently set off a controversy.

The Framework in Action

A three-step process—sensing, sizing, and responding—can help leaders react effectively to the full spectrum of unfolding events.

Sensing.

To manage their scarce time, leaders have to limit what they devote their attention to. But in doing so, there’s a real risk that they will filter out more issues than they should. Explicit directives or implicit signals given to their assistants—such as who gets time on their calendars, what emails are read carefully, and what’s viewed as significant enough for a meeting—can reduce the daily flow of information to CEOs. Although minimizing that flow is a well-intentioned way to eliminate distractions and keep the CEO focused on top priorities, overdoing it can be a mistake. The best leaders stay attuned to what’s going on in their organizations and their external environments. In meetings they are mindful and present, which allows them to pick up on small clues (such as someone’s body language) that might indicate a developing concern. They cultivate a wide and varied network of sources who provide them with timely feedback, and they tend to that network purposefully, inviting candor and avoiding the sycophantic “success theater” that surrounds leaders who want to hear only good news. They especially work to create the psychological safety necessary for people to share difficult news.

Awash in a river of information—a mix of fact, fiction, opinion, understatement, and overreaction—CEOs engage in a process that the organizational theorist Karl Weick called “sensemaking.” This involves recognizing patterns, gathering various perspectives, and putting things into frameworks to make their meaning clear. Sensemaking helps people mentally process complex, ambiguous situations. It improves with practice, so most leaders get better at it over time.

Sizing.

Identifying which quadrant an issue fits into requires leaders to estimate its magnitude, now and in the future. To tell a whisper warning from a siren song (to choose two of the more difficult categories) they need intuition and the ability to see how a current incident is similar to or different from past events. Sizing requires not only pattern recognition but also skill at prediction and forecasting—abilities that tend to grow with experience. Leaders also need to draw heavily on their emotional intelligence to gauge the significance of internal issues and on their contextual intelligence to assess external events. Although CEOs should seek help when sizing issues, they should recognize the biases that the people they turn to may have because of their individual functions or agendas. For instance, the social media team will likely overweight an incident involving social media, and the sales team may overreact to customer feedback.

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Ultimately, it’s the CEO’s responsibility to determine whether an issue is normal noise, a clarion call, a whisper warning, or a siren song. This takes an underappreciated leadership quality Max Weber called “a sense of proportion.” It entails the ability to separate the insignificant from the important, see how things are connected across different levels of analysis, move between details and the big picture, and assess how material something is. For leaders, having this sense of proportion is key. Even if they choose to delegate some issues to others, their own judgments are the ones they must ultimately live with.

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Having sized an issue, leaders then must properly frame it and communicate that framing to the organization. Sometimes they have to address the fact that the organization may be tempted to overreact to a siren song or underreact to a whisper warning and must explain why an issue may be larger or smaller than people initially realize.

Responding.

A leader’s actions in responding to any issue might seem routine because coming up with a plan, delegating responsibility, and overseeing execution is what a leader does daily. However, one key to dealing with unfolding events is recognizing that by definition they are evolving and require an adaptive response. They don’t lend themselves to static six-week plans. Often a leader may ask for quick daily updates to ensure that the response crafted yesterday still makes sense today and that the initial categorization of an issue still fits. An incident that at first presents as a whisper warning may eventually become normal noise—and vice versa.

Taking “robust action”—a leadership approach I have written about that addresses ambiguity and emphasizes adaptability in decision-making—is a good way to manage the changeable nature of unexpected events. Instead of pursuing a fixed trajectory, leaders embrace multiple, even competing, interpretations and solutions. Like great chess players they imagine different scenarios and do their best to maintain several strategic options for as long as possible. The core principle of robust action is that in an unpredictable world, overcommitment to a single strategy limits opportunities and potential pathways, whereas strategic ambiguity and flexibility maximize the ability to adapt to emerging challenges.

. . .

With this framework in mind, how should leaders think about the time they spend reacting to unfolding events? Remember that our CEO study showed that the average leader spends 36% of working hours on them—but that is just an average. Among individual leaders, the range varies dramatically. One CEO we studied spent just 14% of his time in reactive mode; another 81%. No doubt, the second leader was being excessively reactive, but in our discussion with the first leader, we raised the possibility that he was underinvesting in it.

These polar cases illustrate a truth: The leader’s goal is not to minimize time spent reacting to unforeseen events but to find the right proportion. Though managing them may at moments feel like a distraction from efforts to reach long-term goals, it remains an essential part of what leaders do—and there can be immense costs to handling it poorly. Many CEO firings result from missteps in responding to unfolding events. And no matter how brilliant a leader’s plans may be, unexpected issues inevitably intrude, and dealing with them successfully might even be vital to achieving the plans.

Leadership often entails mastering dualities—strategy and execution, short- and long-term performance, profits and growth, continuity and change. We can add being proactive and reactive to the list. As much as leaders must craft a vision and align and motivate the organization around it, they must also sense, size, and respond to unfolding events. I urge leaders to be thoughtful and intentional about managing them—and to use my framework to do so more effectively.