Don't Panic!... What to do when it all goes horribly wrong

Don't Panic!... What to do when it all goes horribly wrong

don't panic

Everything was going fine for the UK insurance industry in terms of their Annuities business… sure customers weren’t happy and politicians grumbled but what was the alternative after all? The profit margins were healthy, all seemed well... Then UK Chancellor of the Exchequer George Osborne suddenly changed all that by announcing that people would be allowed to take their pension pots as cash if they liked. Overnight the share price of insurance companies plummeted, and the Annuity market now looks set to shrink to about 10% of its pre-annoucement size.

So how did people react?

Did teams gather across the City of London, rationally examine the facts, analyse the downside risk and upside opportunities, considered options, and then decide on new strategies, allocating actions to those who are best placed to make it happen?

No, more likely it went like this....

…after 5 minutes of the facts, reaction took over. It’s either fear or blame – and in my experience blame just gets there first: ‘how dare they! The government just doesn’t understand that its about falling returns and people living longer..’ ‘..the trouble is, it’s just too complex for customers to understand.. (quote from insurance guy on BBC News)..’ ‘..they have no idea about what it took to do what we do.. this really isn’t fair treatment and they haven’t thought it through..’

Then fear: ‘what will this mean if we lose this business? What will the Board say? what bad things might happen next? What if I lose my job, my reputation?’

With all the energy in the room, it can be creative and we come up with an ‘answer’ which may be all about ‘working on the government to change their minds’ or ‘showing the Board how we explored every avenue’ or ‘persuading the customer that we alone can provide the regular income they need through annuities’ and sometimes it might even work…

How much better if we can acknowledge our understandable and inevitable reaction to crisis and not get entangled by the stories we automatically tell ourselves about the situation? What about if instead we could look, free from our initial blame and fear, at what promise we are making to the customer and speculate about what future promise would work for them and for us, indeed how could it be even better for both?

Creating a powerful context is key to business success – its being able to see new things that could be possible, informed by the current reality and committing to have them happen. Crisis is a great opportunity for that to happen as long as we’re not trapped by past thinking driven by our emotional reactions.

Philip James is a Consulting Partner at SLP. He leads our Organisational Capability practice

contact@slpglobal.com

"Chancellor vows to scrap compulsory annuities in pensions overhaul." (The Guardian)... http://www.theguardian.com/uk-news/2014/mar/19/chancellor-scrap-compulsory-annuities-pension-overhaul