How Real Leaders Handle No-Win Situations

By Business Leaders FOXBusiness

The business world is full of tradeoffs, but executives and business leaders often face what appear to be no-win scenarios. How they respond tests their ingenuity and resilience and reveals their true character. You might say it shows their true colors – what they’re really made of.

Continue Reading Below

In Star Trek II: The Wrath of Khan, a movie widely credited with reviving what was then a dead franchise, the action begins with Saavik – a Star Fleet cadet played by a young Kirstie Alley – in command of a mockup bridge of the U.S.S. Enterprise. She’s taking the Kobayashi Maru, a simulation meant to test her response to a no-win scenario. Saavik fails the test and everyone on the bridge suffers a simulated death.

We then learn that, as a cadet, James T. Kirk cheated the test by reprogramming the simulator. The former captain of the Enterprise says he doesn’t believe in no-win scenarios. In the end (Spoiler alert), Spock sacrifices his own life to save the ship’s crew. After losing his best friend, Kirk comes to the painful realization that there are no-win scenarios and you can’t cheat death.

If you’re a fan of the show, you know that Kirk’s ingenuity, character and resilience enabled him to foil similar situations almost on a weekly basis. So it goes for scripted fictional characters. It’s a lot harder in the real world, but the qualities that no-win scenarios bring out in leaders are nevertheless the same.

In the boardroom, where CEOs undoubtedly feel in charge, I’ve seen many get flustered and angry when confronted by no-win situations. They of course compose themselves before appearing before employees or the public, but harsh business realities can spark a great deal of emotion behind the scenes.  

I remember one midsized public company that was saddled with inventory that customers weren’t buying and critically close to going under. When I presented my case, the CEO lashed out, “Is that all you [expletive] marketers know how to do, lower prices?” Granted, it was a lousy solution, but the only one that would save the company. Once he calmed down, the boss did make the right call, to his credit.

Continue Reading Below

Looking back at your own handling of past no-win situations can be both instructive and a humbling experience. As the head of marketing at some well-known tech companies, I’ve dealt with all manners of customer crises and PR disasters. But when it comes to internal politics where you’re damned if you play and damned if you don’t, I admit to shooting myself in the foot more times than I care to remember.  

In just the past 48 hours or so there have been a couple of no-win situations that tell us quite a bit about the character of some of today’s notable business leaders:

When Marcelo Claure took the reins at Sprint, he faced an almost impossible turnaround situation. The company was chronically bleeding red ink and drowning in debt. It had the slowest and most expensive network. And it had to undercut Verizon and AT&T just to keep from losing more subscribers than it did.

While the company still has a long way to go, Tuesday’s earnings announcement was decidedly upbeat. In less than 18 months, Sprint is already seeing significant signs of improvement in network performance and customer churn and Claure has a credible breakeven plan. That’s huge after 7 years of Dan Hesse failing to deliver.

Apple’s earnings call went quite a bit differently, however. Slowing iPhone sales, currency headwinds and a projected revenue drop in the current quarter – the likes of which the company hasn’t seen in more than a decade – overshadowed a record-breaking quarter in terms of revenue, profit and cash.  

To his credit, Tim Cook did his best to rip off the Band Aid and reset expectations with respect to economic turmoil in China, currency effects from the strong dollar, the end of the hyper growth cycle stemming from Apple’s blockbuster iPhone 6 launch, and a particularly difficult year-to-year comparison for the March quarter.

He also floated a new metric intended to highlight the stickiness of Apple’s ecosystem and growth potential of its service business: one billion active devices from which users buy apps, download media and make payments. It was a valiant effort but Apple’s already beaten down shares took another big hit, dropping 6.5% on Wednesday.    

In any case, Cook demonstrated tenacity and confidence – both in himself and in his company – in the face of a nearly impossible situation. I honestly don’t know how he could have handled the situation any better than he did. And that speaks volumes about his character in the face of a no-win situation. Spock would have been proud.

What do you think?

Click the button below to comment on this article.