During a conversation I had with Gary Kelly, the former CEO of Southwest Airlines, he shared a powerful quote that he frequently references: “Adversity doesn’t create character; it reveals it.”

Few leaders embody this quality, and Kelly is undoubtedly one of them. He faced major challenges during his tenure, including the grounding of Southwest’s fleet due to a 737 recall, fierce industry-wide fare wars and the impact of the COVID-19 pandemic on air travel.

Throughout these trials, he chose not to simply manage the difficulties but to embrace them as learning opportunities, cultivating a company culture known as ‘warrior spirit’, which underscores perseverance and resilience.

There may be no greater lesson for leaders than navigating disruptions, adversity and transformative events. No war room simulation or mock crisis can provide that level of insight. In fact, adversity often conceals significant long-term growth opportunities.

A BCG analysis revealed that companies that expand during economic downturns tend to reap competitive advantages that persist well beyond the recovery period. Specifically, those organizations that experienced higher growth during challenging times also enjoyed stronger growth in the aftermath of the downturn.

Are leaders ever truly ready for adversity?

Even though dealing with adversity is an essential leadership experience (and a hidden business opportunity), leaders often have a tendency to avoid negative news and troublesome situations, believing that such avoidance will protect their teams from unnecessary anxiety or discouragement.

This inclination can lead to significant blind spots, preventing leaders from fully understanding the challenges they face. When leaders ignore critical information or fail to confront adversity head-on, they risk becoming ill-prepared to respond effectively during crises.

An Institute of Human Development study highlights that avoiding negative news can lead to a skewed perception of reality, influencing how individuals and leaders respond to adversity.

Another study (published in the American Psychology Association journal Psychological Review) found that 86–90 percent of people would not want to know about upcoming negative events, and 40–77 percent preferred to remain ignorant of upcoming positive events. Only one percent of participants consistently wanted to know what the future holds.

When people deliberately filter out negative information, they may become less aware of potential risks and challenges, leading to complacency or an unrealistic sense of security. This avoidance can create blind spots that hinder effective decision-making during crises.

In contrast, by confronting adversity directly, learning from it and guiding their teams through challenges, leaders can foster greater resilience and enhance their readiness to adapt to whatever disruptions may arise in today’s turbulent environment.

Finding ‘good trouble’

Confronting challenges can lead to tremendous growth. American civil rights activist John Lewis once encouraged making ‘good trouble’ to drive change.

Lewis framed this concept within the context of systemic oppression and inequality. He encouraged individuals to be courageous enough to challenge the status quo and advocate for justice, all while adhering to the principles of nonviolence. His message was to embrace boldness in the face of challenges and adversity, urging people to take meaningful action for change without resorting to violence.

Sometimes, leaders need to actively seek trouble to prevent bigger issues from arising. This might seem contrary to effective leadership. Isn’t a leader’s role to guide people away from trouble? Why would anyone deliberately seek out challenges?

The key is to stand firm when circumstances corner you. It’s essential not to rush in without understanding the situation fully and to learn from experiences, sometimes requiring the unlearning of old habits.

Here are some strategies leaders can adopt to identify ‘trouble’ and turn them into opportunities:

Encourage open communication: Create a safe space for team members to voice concerns and ideas. This openness helps identify challenges early and gather diverse solutions.

Conduct regular evaluations: Use tools like surveys and SWOT analyses to assess processes and employee satisfaction, pinpointing areas for improvement.

Reframe challenges as opportunities: Shift your mindset to view obstacles as chances for growth rather than threats.

Utilize data analytics: Analyze patterns and trends within the organization to highlight inefficiencies or customer pain points, helping to avoid future challenges.

Leadership lessons: By implementing these strategies, leaders can cultivate a culture of resilience and continuous improvement. Leaders should recognize that consistent evaluation and open dialogue can lead to early detection of issues, enabling proactive responses.

Acknowledging noise in decision-making

In Noise: A Flaw in Human Judgment, authors Daniel Kahneman, Olivier Sibony and Cass Sunstein, discuss how variability in judgments – referred to as ‘noise’ – impacts decision-making. Leaders must recognize biases in their judgment, as these can lead to poor responses during adversity.

Common biases that influence response to adversity include:

Confirmation bias: Favoring information that confirms existing beliefs while ignoring contradictory evidence.

Overconfidence bias: Overestimating one’s abilities, leading to inadequate preparation.

Status quo bias: Preferring to maintain the current state rather than adapt to necessary changes.

Groupthink: Prioritizing consensus over critical evaluation, which can stifle responses to crises.

Sunk cost fallacy: Continuing to invest in failing projects due to prior investments.

To mitigate these biases, leaders should seek diverse perspectives and conduct thorough analyses of challenges. Learning from past mistakes can provide valuable insights for future decision-making.

When confronted with extreme adversity, it’s natural to instinctively seek immediate solutions. The urge to rush toward resolution often stems from a desire to alleviate the pain and anxiety associated with difficult situations – this is a perfectly normal human reaction. However, effective leaders must confront adversity directly rather than succumb to predictable irrational biases.

I recall a CEO who once shared his approach during turbulent times: he told me that he consistently turned to his ‘contrarian in chief’. This individual would challenge his proposed responses and help him navigate any flawed thinking that could lead to misguided decisions, ultimately preventing the situation from worsening. This practice not only fosters critical thinking but also encourages a more comprehensive approach to problem-solving.

Leaders should be aware of the biases that can cloud their judgment. Emphasizing a structured decision-making process and seeking diverse input can help mitigate these biases, leading to more informed and effective responses to adversity.

Collaboration over heroics

Great leaders understand they don’t have all the answers and that attempting to tackle challenges alone can lead to burnout. Instead of adopting a ‘Hero Leader’ mentality, effective leaders value collaboration and the diverse insights of their teams.

By fostering an environment of trust and open communication, leaders can harness the collective wisdom of their group, enhancing problem-solving and strengthening team resilience during extremely challenging times.

To encourage collaboration during adversity, leaders can:

Form cross-functional teams: Bringing together members from different departments can generate innovative ideas.

Listen to customers: Engaging with customers helps leaders understand their needs and pain points during challenges.

Stay informed about industry trends: Keeping abreast of regulations, supply chain issues and market shifts prepares leaders for potential disruptions.

By prioritizing collaboration, leaders can tap into the strengths of their teams and create more sustainable solutions to challenges. This approach not only alleviates the burden on individual leaders but also fosters a sense of ownership among team members.

While it is crucial for leaders to embrace diverse perspectives, they must also acknowledge that the ultimate responsibility for decisions lies with them alone. This highlights the importance of the principle: ‘diversity in counsel; unity in command’, particularly when navigating adversity and major challenges.

Addressing the needs of followers

Gallup’s four needs of followers – trust, compassion, stability and hope – are vital for effective leadership during tough times. By addressing these needs, leaders create a supportive environment that fosters resilience and positive responses to challenges.

Trust: Building trust through transparency and reliability helps followers feel secure.

Compassion: Showing empathy and understanding fosters a sense of belonging and support.

Stability: Providing clear guidance and consistent communication helps followers feel anchored during chaos.

Hope: Articulating a vision for the future instills optimism and motivates followers to persevere.

Leadership lessons: Leaders who actively address these needs can enhance team cohesion and improve problem-solving capabilities. By nurturing trust and compassion, leaders can create a stable environment that allows team members to thrive, even in adversity.

Thriving in chaos

Like Gary Kelly, many leaders thrive in adversity by listening closely to stakeholders and prioritizing collaboration. In an environment filled with challenges and disruptions, this individualized approach is essential.

By creating a structured environment and offering clear direction, leaders can alleviate anxiety and foster a sense of security among their teams.

Ultimately, embracing adversity as a learning opportunity for growth can lead to lasting success. By applying these lessons – viewing challenges as growth opportunities, acknowledging decision-making biases, fostering collaboration and addressing the needs of followers – leaders can navigate adversity more effectively and emerge stronger on the other side of change.

Opinions expressed by The CEO Magazine contributors are their own.