Stress Testing for the Future
More than a few years ago, I attended and spoke at a Harvard School of Public Health symposium run my Eric McNulty. Eric is associate director for the National Preparedness Leadership Initiative and the Harvard T. H. Chan Program for Health Care Negotiation and Conflict Resolution. The two day symposium topic was focused on planning for a pandemic, how to get ahead of it, which stakeholders would matter, and so on. I spoke on a panel about the reputational issues that would arise when companies did not deal well with this idea of a global pandemic. I drew on company reputations after 9/11 when some companies lost reputational equity in their weak or callous response to employee welfare and well-being.
I recall vividly how one of the big takeaways was that most leaders would not encounter such an unprecedented event in their tenure so why worry about it when it might be years or decades away? When I returned to work, I thought about nudging my firm to worry about the advent of such a cataclysmic event, but quickly reverted to…REALLY! Who is going to take me seriously when the future was so far away.
I thought of this when I read JPMorgan Chase CEO Jamie Dimon’s Letter to Shareholders today. It’s a great read in terms of leadership lessons, the purpose of a corporation, Issues facing the banking industry, Covid-19 and the impact on the economy, and public policy and American exceptionalism.
Two things struck me:
Dimon says, “To a good company, its reputation is everything. That reputation is earned day in and day out with every interaction with customers and communities. This is not to say that companies (and people) do not make mistakes – of course they do. Often a reputation is earned by how you deal with those mistakes.” To me, that is what reputation is all about these days—how companies and its leaders respond to crises and issues they face as does society. We are seeing that with CEOs taking activist stands on the biggest hot button issues.
In a section on leadership lessons, Dimon advises others to Always Deal with Reality. Easier said than done. It is hard to envision future uncertainty and unpredictability. Dimon mentions how his company conducts over 100 stress test every week to make sure they are preparing for what they are NOT predicting. That speaks to who would have imagined the arrival of a global pandemic that halts all activity and contact on a global scale. This is analogous to planning for planes flying into the World Trade Center Towers on 9-11. We probably discussed the idea of a global pandemic at the Harvard event but it was totally unimaginable to me that this would happen in my lifetimes. The bottom line is that we all have to get those stress tests up and running and think about what we can’t even predict ever happening because it will.