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Clear and Present Danger

Bankruptcy, unemployment, terrorism, war, disease . . . Welcome to dangerous times. Here are four strategies for living well in a state of high alert.

We find ourselves, suddenly, sadly, in very anxious times. Remember the good old days of continuous economic expansion and seemingly instant wealth? Now we contend with Al Qaeda and Iraq — and the likelihood of some new conflict, wherever, whenever. We’ve faced anthrax — now there’s SARS. And lurking out there, just beyond the front page, is a rickety economy, a volatile stock market, and the prospect of being laid off.

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How do people cope in a zone of perpetual anxiety? Danger, real or imagined, can concentrate the mind: A low level of duress typically helps us focus on the problem at hand, and decision making actually improves. When anxiety becomes too great, however, we get overwhelmed, and we shut down. The result: suboptimal decisions.

As the threats — real or imagined — intensify, the challenge is to learn how to handle the resulting sensory flood and adrenaline rush. That’s how people who take on danger for a living remain effective. They keep from becoming unglued by sticking to four key strategies.

Focus on what’s working.

When Apollo 13 commander James Lovell radioed, “Houston, we’ve had a problem here,” ground controllers feared that the spacecraft had been fatally damaged by an explosion. Eugene Kranz, the flight director, worried that the ground controllers’ fear could undermine the search for a lifesaving solution. “Let’s everybody keep cool,” he urged. “Let’s solve the problem.” As the controllers reported one failing system after another, Kranz insisted that they look for what was working, asking, “What do you think we’ve got in the spacecraft that’s good?” He sought to create calm out of chaos by identifying what still worked.

Instill confidence.

Every year, the Wharton School buses 80 of its MBA students to Quantico, Virginia for a brief immersion in the Marine Corps’ Combat and Leadership Reaction courses. As their buses arrive at the barracks, students notice four figures standing nearby. When the bus doors open, the MBA students instantly learn that the figures are drill instructors.

“Get off my bus like your hair was on fire!” the lead DI bellows. Students fall into a perfectly straight line for a rapid-file march into the barracks. And there, all hell breaks loose. Banging on cans and barking orders, the DIs impose a reign of terror. For the next three hours, the students fill canteens, make their beds, and do precisely as they are instructed.

When the students fall short — and most do — they must endure the DIs shrieking at them from all points of the compass. After two MBA students initially failed to make their beds in total accord with exacting requirements, they were berated for their abject failure. One instructor screamed, “You’re from the Wharton School of business, right? Now I understand why Wall Street is such a total mess!” 360-degree feedback never felt so bad.

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The reason why DIs do what they do is neither to shock nor to awe — though both are amply achieved — but rather to prepare future officers for the duress of the battlefield. After enduring months of stress in the relative security of Quantico, company commanders are far better prepared to face the stress of battle. Our MBA students recognize that few moments in their future investment-banking or trading careers will ever feel quite as harsh as a verbal dressing-down at the hands of a DI.

Ensure team camaraderie.

Good teams — well formed and well led — achieve more than any individual can. That’s why top management teams are better predictors of company success than any one executive, even the CEO. One big reason: Good teams are better able to make optimal decisions under terrifying conditions.

Industrial-psychology research has shown that as the stress on a worker increases, so does performance, until the stress level exceeds the worker’s breaking point — and then performance declines. But the breaking point for individuals in well-formed teams is far higher: Team members support and reinforce one another to do what they could never do on their own.

Invest in a courageous culture.

German specialty-chemical maker Degussa views bravery and audacity as essential corporate virtues, and it trains all of its managers to embrace those qualities: “Successful leaders in Degussa,” the company asserts, must have “courage, determination, and a strong backbone.”

A courageous culture is crucial when the stakes are high and uncertainty abounds — as it does at the moment. Former IBM chief Louis Gerstner demanded that his managers act audaciously in times of stress. “Whatever hard or painful things you have to do, do them quickly,” he insists in his book Who Says Elephants Can’t Dance? Inside IBM’s Historic Turnaround.

News of bankruptcy, pestilence, and terrorism persistently alerts us to the threats that we face. It may well be that this state of alert is permanent — that the stress and risk we endure today will be the norm of tomorrow. In other words, get used to it. But do more than just accept it as the new normal: Confront it intelligently. Rather than trying to wish it away, learn to operate in ways that make the danger less dangerous.

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Michael Useem (useem@wharton.upenn.edu) is professor of management at the Wharton School of the University of Pennsylvania and coauthor of Upward Bound: Nine Original Accounts of How Business Leaders Reached Their Summits (Crown Business, fall 2003).

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