Leadership In Crisis
April 06, 2020

Leadership In Crisis

Unquestionable, we’re all going through a crisis right now and what better opportunity to learn how to lead ourselves and others when we happen to have a crisis going on. We are all affected by this massive global pandemic that has ignited the worst crisis in the history of mankind. We are seeing all sorts of fear; we are seeing a lot of panic. We are seeing businesses going bankrupt and people mindlessly hoarding. We’re seeing people loving and going the extra mile and just doing extraordinary things. So let’s dive into this topic and discuss the psychology behind what happens in a time of crisis.

The Psychology Behind Crisis

When I learned the psychology behind a crisis, I was able to calm my nerves, relax and focus on the important things to understand my reality better. This way I was better informed, and I could take the best action possible.

During a crisis initially we have a trigger event. Back in 2001, there was a trigger event, the 9/11 attacks, and that of course, triggered a market collapse in 2008. We had a housing market collapse and that too triggered a recession. Right now in 2020, the trigger event is COVID-19 or Coronavirus, and it’s important to understand it.

There are different stages in a crisis. Picture a graph, there’s the initial stage, Stage 1, then you’re going to see the graph dip down, and then it comes back up. It ends up being a curved line. It’s important to remember that there are several stages involving psychology, and we’ll discuss them one by one below.

I attained this amazing information about the different stages through Mike Michalowicz who’s the author of Profit First, the Toilet Paper Entrepreneur, and the Pumpkin Plan. I’m a Certified Profit First Professional and I worked with Mike for several years launching his mastery program.

So let’s dive into these different stages so we can all understand the psychology behind a crisis.

Stage 1 – The Shock Stage

Stage 1 revolves around pure shock and oblivion. Something happens that we’re not expecting and we are all left a little startled— we kind of freeze up. We’re not really sure what to do. For some business owners and for some people it means taking inaction, meaning they don’t do anything. They just ignore it. They bury their head in the sand and they don’t take any action whatsoever.

Stage 2 – The Desperation Stage

After Stage 1, we move fairly quickly into the Desperation Stage. In this stage, this is where the logic starts to get superseded by overreaction and we see the Stampede Effect.

We’ve seen this with the run on toilet paper in early Covid days, where almost everybody overreacted and literally bought out all of the toilet paper, hand sanitizers, soaps, and cleaning products. Froom there we saw this Stampede Effect where things were just completely bought off and in some situations weren’t restocked in shelves for weeks even months.

During the Desperation Stage, business owners will also start to respond illogically. When they do this, they take massively wrong actions, like taking out massive loans, they pull all their cash out of the business and run up the credit cards and fire the entire staff. Some businesses discount all their prices way too low.

This is not to say that some of these actions are unnecessary, but caution and strategy are greatly needed. Also, some businesses take actions without understanding the logic behind them. This is why early on we saw some businesses going under, which is all due to inaction or by taking massively wrong actions.

Stage 3 – The Evaluation Stage

During and after Stage 2, we continue down the curve, and at the bottom of this curve, we get to Stage 3 which is the Evaluation Stage. This is the stage that we want to get to quickly.

Whether you are the CEO of your own company or the CEO of your family, you’d want to get to the Evaluation Stage as quickly as possible. In this stage, we make thoughtful consideration or put thoughtful consideration into the actions that we need in order to move our businesses and households forward.

We start to analyze different aspects of our business plan like appropriate marketing that we should continue, or how to increase our margin? How do we maximize the cash coming in? And how do we minimize the cash going out?

Now in this Evaluation Stage when we are looking at all of our options, we want to make sure we don’t get into stagnation, where we’re overthinking and over evaluating. We want to put thoughtful consideration into what’s our next best action. But we don’t want to get stuck in the evaluation and create an endless loop.

Stage 4 – The Deliberate Action Stage

After Stage 3, we now start to head back up the curve, and this is where we get to Stage 4 which is about deliberate action.

We are currently at Stage 4 with Coronavirus and this is where we all want to be. When we’re taking deliberate action, we’re choosing very specific actions that are going to get us to whatever the next need of our business is. In this stage, when we focus on one appropriate action, we’re able to fix it by taking the right course. Once we take care of a certain thing, we’re going to move to the next appropriate need.

This is different than being in a state of panic and going around in a million different directions trying to do a million different things. We want to avoid that because it’ll lead us into recurring wrong actions and our businesses could in fact collapse.

We want to instead focus on deliberate action, and being clear-headed. We’ll focus on the next appropriate action that we want to take and help ourselves and our businesses to survive.

Stage 5 – The Economy Rebounds

Stage 5 is when the economy rebounds. The economy always does come back, it will again, and what happens is that as it comes back, there’s a huge increase in demand. If we have been really effective at leading through crisis and at taking deliberate actions, we’re going to be in a really good place and prepared for Stage 5; the burst of the economy. We’re going to be ready for that rebound which is imminent!

Do The Groundwork

You can use this time right now to really do the groundwork to prepare. You can plan on improving the technology for your business. That does not mean that it’s the right time to invest in technology, but it can absolutely be the right time to research it.

Analyze and figure out which programs you need to implement or which software needs to be replaced. The same goes for staffing since this is an excellent time to look at your staffing. Most business owners are running with limited staff and they should be focusing on ways to be more efficient. Focus on aspects that should be abandoned or eliminated. Figure out certain roles that need to be added that were not accounted for before.

You don’t necessarily have to hire people but you can do the groundwork to prepare for the economy rebound by analyzing processes and systems. Now’s an excellent time to be preparing for that surge which is absolutely going to come.

Right now, while we’re in Stage 4, we’re taking deliberate action to improve different areas of our businesses. Obviously the first area is going to be the finances, looking at your budget, maximizing cash that’s coming in, and minimizing cash that’s going out. That would definitely be appropriate action right now. Once you’ve done everything you need to do to make sure that the finances of the business are as stable as they can be, you can focus on other areas of your business that may need to be improved but have been neglected in the past.

Let’s say your energy or your emotions are just really getting the best of you and you’re just not feeling it right now or you’re overwhelmed, I’d love to encourage you to actually manage your emotions, manage your thinking so that you can tap into the energy that you need to leverage this time.

In my program, Goal Achievers, there is training session called Unlocking Your Emotional Strength. I specially made that training free so that anybody and everybody who needed it could access it because of the crisis.

The Formula For Strong Leadership

When we talk about leading through crisis, there are 4 key things that are the strongest formula to build strong leadership.

  • Self-care
  • Emotional Strength
  • Appropriate Actions
  • Love



Make sure that you’re taking really good care of yourself and now is the time not to put yourself on the back burner. So if you’re tired, sleep, if you’re hungry, eat. Get outside into the sunshine, go for a walk, get some fresh air, be out in nature, even if it’s just for a few minutes every single day. It’s important to take care of yourself so that your batteries are charged and you’re in a position to set an example and lead all the other people that are looking up to you for leadership.

Emotional Strength

Number 2 is to manage your emotions and your thinking. Because if you’re thinking fear-filled, panic-filled thoughts right now, that’s going to take your emotions to a very unpleasant place. It is going to make it very difficult for you to have clear thinking and make good decisions right now in your business and in your personal life.

So you want to do some work there to manage those emotions. If you’re not sure how, just watch my free training Unlocking Your Emotional Strength.

Appropriate Actions

Number 3 is taking appropriate action. We need to stop hoarding toilet paper or doing things that actually hurt everybody. We should always take appropriate action. That does not imply specifically doing nothing, or maybe even doing a million different things. It means finding that balance by tapping into your intuition. It’s as simple as taking one thing at a time and focusing on it until it’s done and then moving to that next appropriate action.


Finally, we need to respond with love. It’s really easy right now to just get carried away and panic. But it isn’t what the world needs right now. The world needs calm, the world needs peace. The world needs people who can lead through this dilemma.

We’ve seen so many people going the extra mile and it really warms one’s heart. We feel so much better and connected to our global community when we see people responding with love.

I would encourage you to be one of those people out there responding with love, and not one of those people out there who are taking more than they absolutely need to prevent others from suffering.


I hope learning about the psychology behind crisis and the five stages will help you take deliberate action and prepare for Stage 5 of the economy rebound.

If you guys need any more love and support, especially if you’re business owners, check out my other tools and resources from bestplannerever.com. And again, I encourage all of you to take advantage of the free Unlocking Emotional Strength and tapping into that in these trying times.



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Jennifer Dawn


Jennifer Dawn has grown two multimillion dollar businesses and now mentors others to do the same. She is one of the select few nationwide Profit First and Provendus Growth Academy Certified coaches…

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