When the financial crisis his in 2008, Jonathan McMahon was a director of the Central Bank of Ireland, giving him a front-row seat in the efforts to keep the economy afloat. As we face another economic challenge, interlocked with a health threat, he has looked back a decade for lessons that might help us in the years ahead.

“Crises are disruptive. They complicate life. In the middle of the pandemic, we longed for it to end and for the economic damage and social restrictions to be over. But we should not be hasty to return to business as usual. The question we should now be asking is what can be done to escape the effects of the crisis in an enduring way. We should want to build a more resilient social and economic system. We should seek to strengthen the financial system. We should not want to kick these and other problems down the road for future generations to solve,” he writes in Post-Pandemic.

The 12 lessons he gathered from the 2008 experience, reflecting on them amidst the current crisis, are: 

  1. No one knows what is going to happen: It is human to want to see the future. But if we have learned anything in the past two decades, it’s that political and economic predictions are rarely correct. In the early day of the COVID-19 pandemic, no one knew how the virus would spread. Crises change how we think about the future. “Those leaders who accepted the inherent uncertainty, and did not pretend to know what might happen, had already made the emotional and intellectual leap required to solve the problem,” he says. “In a crisis, it’s is dangerous to pretend things might be more certain than they are in reality.”
  2. Get out of your bubble: Well before the 2008 financial crisis, he was listening to taxi drivers, and through them developing concerns about the frothy housing market. In the pandemic, he turned to social media, in particular following people outside his own network. It was imperfect research, of course, and did not provide any crisis-altering revelations. “But this is not the point. The alternative is to remain within a bubble, and this will reveal nothing you do not already know,” he says.
  3. Imperfect decisions need to be made imperfectly: Leaders who prevail or thrive in a crisis find it within themselves to address the altered circumstances. They quickly understand that continuing past practices won’t work. This is not easy, however. From an early age, we have learned that doing things in a prescribed way is encouraged and finding alternative paths discouraged. Crisis management, however, is an art. And art involves creativity. “Creativity involves trial, error, and mess, and it involves taking risks. No one knows precisely what they are doing in a crisis, nor is there a right way out of a crisis. It is an imperfect, imperfectible process,” he says.
  4. People who agree with you are not always helping: During a crisis, it is vital to have people willing and able to disagree with their leaders and colleagues. That’s because decisions made quickly on significant issues are inherently risky and need to be challenged to be improved.  You need people who have thought through the issues from first principles and are willing to give their opinions. “A mute sage is of little use in a crisis,” he notes. The search for better answers, he adds, never ends. If the people offering uncomfortable truths start to become a distraction, channel their energy into something else productive rather than demotivating them.
  5. Talk about the real issues: During the global financial crisis, Ireland shifted from telling one story about itself to a very different one. That didn’t come from a conscious or planned process. Serendipitously, ideas given short shrift in the previous decade gained new legitimacy. The business of talking about things nobody has been talking about or wants to talk about is integral to crisis management.  “During the process, I came to recognize that as soon as nobody wanted to talk about something, we were probably talking about the right issue,” he notes. 
  6. Don’t just understand the numbers; understand their meaning: A crisis not only exposes the limits to the explanatory power of economics and finance but reminds us of the importance of human psychology. During the early days of the pandemic, actions and remedies were explained in calm, rational terms. “While it doubtless made perfect sense for policymakers to think in this way, it did little to foster emotional engagement. It was too abstract. By contrast, the simple and direct ‘Stay at Home, Save Lives’ message in the UK resonated immediately,” he says. 
  7. Finding a voice for a crisis: The most compelling leadership in the pandemic came from those individuals able to talk confidently about the realities of the outbreak in a humane, compassionate way. People were looking for emotionally intelligent, right-brain descriptions of left-brain solutions. Caring is critical in crisis management. People will scrutinize your words, actions, and body language to see if you care and are worth following. They want you to address the gravity of the crisis without sounding defensive or alarmist, particularly when championing extraordinary measures. You must find that voice for this special moment. 
  8. It is very difficult to fix a problem you created: In The Fog of War, former U.S. Defense Secretary Robert McNamara expressed deep regret for some of his decisions during the Vietnam War, an extraordinary revelation since we are not used to leaders admitting mistakes. In a crisis, when a lifetime of work may have been or is in the process of being swept away, the emotional responses that accompany grief will be triggered. The first stage is denial, during which the temptation will be to claim things are not as bad as they seem. At that point, the leader can become an obstruction, and the right answer is to find an alternative role of even move them out of the organization.   
  9. Know thyself: A crisis is a formative, demanding experience, and therefore physical and mental wellbeing is critical during a crisis. Energy and sleep reserves become depleted (and one of the consequences of that erosion is that you are unable to see that reserves are low). Caring for oneself is therefore a necessary part of crisis management.
  10. Confidence is not competence: Business schools do not teach doubt. But doubt has its uses and one challenge in a crisis is to find time to think and explore the doubts you may be experiencing without spooking colleagues. “Perhaps the biggest challenge is to work out what one should have doubts about. When there is much going on and things are moving at a pace, our antenna can be overwhelmed. Working out what matters and what does not is a perennial challenge for executives,” he says.
  11. Crises end but the causes endure: During the Spring lockdown, many people were preoccupied with returning to normalcy. The word crisis is of Greek origin and meant a decision or turning point. The word implies – and has come to mean – that the phenomenon is temporary. “We therefore fail to see that the causes endure, that they have, in some cases, accompanied us throughout human history,” he observes. We need to recognize and address those causes. It is dangerous to believe that crises are exceptional, deviations from normal, and our own brilliance can bring everything back to the way it was before.    
  12. When we fix one crisis we always create another: In addressing this crisis, look hard to the unintended consequences. This is not easy but try to find someone on your team with an ability to sketch out the possible consequences of different options. “This will not guarantee that you avoid mistakes that come back to haunt you or your successors, But it reduces the likelihood of this happening,” he says. Beware of stopping too early with reforms, assuming prematurely you have been successful. Reform does not stop because it is no longer needed, he warns, but because people have decided they have done enough. Keep up the momentum, pushing for things that will make a lasting difference.

The twelve lessons are not the same-old. They make sense but have an unusual and at times off-beat nature. They are worth re-reading and contemplating as we continue towards the post-pandemic world and whatever crisis looms next.