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In
his inaugural speech of 1933, President Franklin Delano Roosevelt addressed the
nation as it was being consumed by what is now known as the Great Depression.
One of his most memorable statements from that now-famous speech is, “The only
thing we have to fear is fear itself.” What you may not know though is the full
context of that declaration: “So, first of all, let me assert my firm belief
that the only thing we have to fear is fear itself—nameless, unreasoning,
unjustified terror which paralyzes needed efforts to convert retreat into
advance.

FDR
certainly had it right about that crisis. He realized that economic
conditions—both bad and good—are influenced by the psychology of the times. FDR
also knew that the psychology of panic that was overtaking our country during
that economic crisis would prevent it from taking the action it needed to
recover quickly. 

The Next Great
Depression?

Many
people have called this economic crisis the next great depression. But,
contrary to what FDR said, in today’s economic climate there appears to be more
to fear than fear itself. What we know now is that the psychology of fear,
negativity, and panic has spread like an epidemic across our country and around
the world. We have witnessed a race out of the stock market, investors
withdrawing money reflexively, knee-jerk reactions from politicians, and hasty
and poorly thought out decision making by policy makers.

Economic Crisis as
Laboratory

This
extraordinary episode has presented us with a unique laboratory that offers us
a rare opportunity to plumb the psychological depths of the crisis and gain
real insight into the nature of crises and how we respond to them. From this
remarkable Petri dish, we can find answers to some essential questions: what is
our emotional reaction to crises?; what do we think about in a crisis?; how do
we react in a crisis?; and, most importantly, what can we learn from this
catastrophe to help us deal with the crises we will inevitably confront in the
future?

A Crisis is a Crisis

I
believe that a crisis is a crisis. We face crises of all sorts, of varying
degrees of magnitude, every day in the form of challenges, obstacles, setbacks,
and failures. Moreover, crises are a test of our psychological, emotional, and
leadership capabilities. Crises tell us a lot about who we are because the best
and the worst of us reveals itself most prominently during the stresses of a
crisis. And, given the fact that crises are a normal part of our lives, the
ability to overcome crises will certainly make us better performers, leaders,
parents, and spouses.

Crisis
Psychology

The
typical human reaction to crisis is best known as the “fight-or-flight”
response that has evolved in humans over millions of years with a singular
purpose: to ensure our survival. The primitive humans who had this reaction had
a better chance of survival and passed on those genes to future generations up
to the present. This crisis mentality has three components: fear, negativity,
and panic. Fear prepared us physiologically to fight or flee by increasing our
strength and stamina, sharpening our senses, and reducing our perception of
pain. Focusing on the negative dimensions of the crisis, namely, the immediate
threat, ensured that we stayed vigilant to the most apparent dangers, allowing
us to respond most quickly. Panic created instantaneous action, either frenetic
resistance or rapid flight, that made survival more likely. This reaction was
very effective back in primitive times because the threats back then were generally
immediate and simple.

Unfortunately,
survival is much more complex today. As a result, the crisis psychology of
primitive times simply won’t work any longer. Fear paralyzes our ability to
think clearly, solve problems, and make decisions. Negativity becomes a
self-fulfilling prophecy. And panic causes knee-jerk and ill-advised reactions.

Opportunity
Psychology

To
survive in the concrete, metal, and hard-wired jungle in which we now live, you
need to develop what I call an opportunity psychology.. Instead of fear, you
can experience emotional mastery, which isn’t the absence of fear, but rather
the ability to confront the fear and act proactively and constructively despite
it. It involves being able to manage negative emotions, such as fear and anger,
and generate helpful emotions, including hope and inspiration. Instead of
negativity, constructive thinking promotes thoughtful consideration, problem
solving, and effective decision making. Finally, instead of panic, opportunity
psychology encourages calm and deliberate action that is directed and
purposeful. 

Admittedly,
adopting opportunity psychology is far from easy; there are millions of years
of human development pulling us toward the crisis reaction. But you have
something that apes did not have, namely, the ability to control emotions,
think reflectively, and act deliberately. These strengths can enable you to
break the grip of the crisis reaction and incorporate the psychology of
opportunity.

Laboratory
Results

My
investigation of this economic crisis to date, and many other traumatic events,
has revealed seven dimensions  that
distinguish those who respond well to a crisis from those who don’t. Your
ability to reject the crisis mentality and cultivate an opportunity psychology
depends on your developing these essential capabilities.

Emotions.
Making the transition from the crisis instinct to an opportunity psychology
begins with emotions because they are the most primitive part of us. When faced
with fear, frustration, or anger, you have to keep from being overwhelmed by
these negative emotions before you can do anything positive.

Mindset.
Your mindset, that is, how you think about the crisis, is the next step in
changing a crisis mentality into an opportunity psychology. Unfortunately, a
crisis tends to turn a mindset immediately and powerfully negative. Your
ability to stay positive, motivated, and forward thinking will determine how
you respond with the subsequent dimensions.

Vision.
A crisis suggests that the status quo has broken down and what has worked in
the past no longer works. This condition requires that you have the vision to
see the crisis in a different light. You must look back on the crisis to learn
essential lessons, have a broad depth of field see all relevant contributors,
and then look beyond the immediate crisis to consider the long-term
consequences of your reactions to the crisis.

Motivation.
Your ability to respond positively to the crisis will depend on your motivation
to act. Your will to act on your opportunity psychology and apply yourself
effectively to confronting the crisis will determine whether you emerge from
the crisis stronger than ever. This motivation includes your willingness to
take reasonable risks, maintain discipline, and persist in the face of
significant obstacles.

Behavior.
Opportunity psychology matters little if you aren’t able to express the
emotions, mindset, vision, and motivation in your actions to the crisis. You
need to act purposefully, continue to reach out and connect with others, and
sustain your focus on solutions, and take action when paralysis would be
easier.

Leadership.
If you are in a leadership role, you have more to worry about than your own
psychology; you have many psychologies to deal with. For your team to work
constructively through the crisis, you need to provide leadership that will
foster opportunity psychology in everyone. You must send the right messages of
optimism, reason, passion, and decisiveness.

Culture.
An organizational culture will develop based on the individual psychology of
everyone involved and the leadership that is offered by those in authority. How
your company responds to the crisis will depend on the nature of that culture.
You must have a culture that is energized, willing to take responsibility, and
unified.

By
considering how you respond to crises, both large and small, on these seven
dimensions, you will be able to identify what changes you will need to make to
better prepare yourself for future crises. And by becoming a master of crisis,
you become a master of life itself.