Stockdale embraced a Genius of the AND in his leadership: You must retain unwavering faith that you can and will prevail in the end, regardless of the difficulties, and at the same time you must confront the most brutal facts of your current reality, whatever they might be. You must believe you can survive the camp and will live to see your loved ones again, and at the same time you must stoically accept that you will not be out by this Christmas or the next Christmas or even the next Christmas after that. Never fall into the leadership trap of creating false hopes soon to be destroyed by events. Yet equally, never capitulate to despair and lose faith that you will prevail in the end. You need the Stockdale Paradox to go from start-up to great company. You need the Stockdale Paradox to lead a company from good to great. You need the Stockdale Paradox to navigate turbulence and disruption. You need the Stockdale Paradox to reverse decline and engineer a return to success. You need the Stockdale Paradox to continually renew a successful company so that it might endure. Level 5 leaders confront the brutal facts before they set vision and strategy, and they create a climate where the truth is heard. Failure to confront the brutal facts is a precursor to catastrophic decline, always. (Directed reading: Good to Great, Chapter 4.)

(Again, to review from the previous chapter, a “luck event” meets three tests: First, you didn’t cause it; second, it has a significant potential consequence, good or bad; and third, it has an element of surprise, some aspect of the event is unpredictable before it happens.) Any framework that didn’t account for unpredictable and unforeseen events would be incomplete, and I couldn’t be intellectually satisfied until we wrestled with the question of luck. The concept of return on luck accounts for the undeniable fact that luck happens (a lot) yet captures the essential truth that luck itself cannot cause greatness. Catastrophic bad luck can kill a potentially great company, but good luck cannot make a company great. Luck doesn’t build great companies that last; people do.

One of our key findings is that the winners exercise prodigious amounts of productive paranoia. Our research showed that they carried a much higher cash-to-assets ratio than less successful companies as a disciplined habit from early in their development. (Think of a conservative balance sheet as one element of the twenty-five squadrons.) They worried obsessively about unexpected events that could destroy them, and they built buffers so they could survive external shocks. They also shunned uncalibrated risks that could leave them exposed to calamity.

This wasn’t a moment to stand back and let the team figure out what to do on their own. I needed to make sure people knew exactly what they were working on and had the tools to find solutions as fast as possible. I had to command and control.

In a crisis, everyone has their job:

• If you’re an individual contributor, you need to take your marching orders and start marching. Do your core job while continuing to look for and suggest other options to solve the issue. Try not to speculate or gossip. If you have concerns or suspicions, report them up the chain, then get back to work.

• If you’re a manager, you need to relay information from leadership without overwhelming or distracting your team. Check in with the team a couple of times a day—try not to harass them more than that (hourly messages just freak everyone out). You need to be there for them, not just to ensure that the work is getting done, but also to make sure they’re okay. You’re the first line of defense against burnout. The pressure, stress, red-eyes, and bad food in the middle of the night will get to people. You may need to give everyone a break—even during a crisis. Remember to set expectations and limits. You’ll probably have to work over the weekend. Okay. That happens. But tell your team what the plan is: we’ll work hard on Saturday but everyone needs to get out of the office at 5 p.m. and then we’ll have a check-in on Sunday night.

• If you’re the leader of a broader group or company, you probably spent years of your life unlearning the tendencies of micromanagement. Well, if you’re in a crisis then it’s time to be a micromanager again.

You’ll need to dig into the details—all the details. But you can’t make every decision on your own or fix everything single-handedly. You have experts, so you’ll need to delegate to them. Agree on the microsteps that need to be taken, but allow them to take those steps without you. Schedule check-ins in the morning and at the end of the day and instead of getting the usual weekly or biweekly reports from your team, start going to their daily meetings. You have to be in there, listening, asking questions, and getting necessary information in real time. You might have to be the conduit of that information to the rest of the company, to investors or reporters or whoever else is watching this situation like a hawk. You need to be able to answer their questions. You need to keep up their confidence that you’re getting somewhere.

Clear your calendar of nonessential meetings. Focus entirely on fixing the problem. And don’t let yourself get knocked off balance— you’re human. Don’t make things worse by losing your mind and ignoring the things you need to keep your head on straight. That might be exercising or resting or having dinner with your family or lying on the floor under your desk for ten minutes quietly singing show tunes. Whatever you need. And remember, your team is human, too—people need to go home. They need to sleep. They need to eat. And they need to feel like things are getting better.

It’s your responsibility as a leader not to try to deal with a disaster on your own. Don’t lock yourself in a room, alone, frantically trying to fix it. Don’t hide. Don’t disappear. Don’t imagine that by working for a week straight and not sleeping you can solve the problem yourself and nobody ever has to know. Get advice. Take deep breaths. Make a plan.

Then put on your rain boots and walk into the tidal wave.

The silver lining is that once the crisis is past—assuming you survived it, of course—you’ll have a team that’s gone through hell and back and is stronger for it. You’ll have time to go figure out the why—why did this happen in the first place? And what can we do so it doesn’t happen again? That may mean someone gets fired or the team reorganizes or the way you

communicate with each other drastically changes. The process may be lengthy and unpleasant.