Whether leading a nation or managing a company, the lesson is the same: ignore reality and it will come back and smack you in the face. It’s very important to prevent this from happening in your company.

There are a number of things you can do to ensure that you are not protected from reality.

First, surround yourself with people who tell it like it is. Strange as it seems, this is not an easy task. For one thing, most people know that telling the truth can be politically dangerous and many, like the manager mentioned earlier, are terrified of political fallout.

You need at least a few people around you who aren’t afraid of you and who aren’t concerned with politics. This is where detached and objective outsiders (consultants and directors) are invaluable. You also need honest people inside— people who are so honest and direct they are almost uncomfortable to have around. You don’t have to like them. You just need to listen to them.

Churchill, for example, felt so strongly about this that he created a separate department whose sole responsibility was to root out and present the naked truth about pressing issues. Leaders of great companies never hesitate to reward what Thomas J. Watson, Jr. called “those sharp, scratchy, harsh, almost unpleasant individuals who see and tell you about things as they really are.”

Second, personally stay in touch with what’s happening. Don’t rely solely on status reports or quarterly reviews, and other formal reporting methods for information. Use your company’s products. Listen directly to employees at all levels. Talk to customers. Read consumer reports about your products. Personally answer customer complaints. In short, do whatever you can to keep in touch with reality.

Third, never punish people for telling the truth. We all know the story of how Peter the Great responded to the messenger who brought him news of defeat: he executed him.

4.6. Crisis

“You will encounter a crisis eventually. Everyone does. If you don’t, you’re not doing anything

important or pushing any boundaries. When you’re creating something disruptive and new, you will at some point be blindsided by a complete disaster.

It may be an external crisis that you have no control over, or an internal screwup or just the kinds of growing pains that hit every company. [See also: Chapter 5.2: Breakpoints.] Either way, when the time comes, here’s the basic playbook:

1. Keep your focus on how to fix the problem, not who to blame. That will come later and is far too distracting early on.

1. As a leader, you’ll have to get into the weeds. Don’t be worried about micromanagement—as the crisis unfolds your job is to tell people what to do and how to do it. However, very quickly after everyone has calmed down and gotten to work, let them do their jobs without you breathing down their necks.

1. Get advice. From mentors, investors, your board, or anyone else you know who’s gone through something similar. Don’t try to solve your problems alone.

1. Your job once people get over the initial shock will be constant communication. You need to talktalktalk (with your team, the rest of the company, the board, investors, and potentially press and customers) and listenlistenlisten (hear what your team is worried about and the issues that are bubbling up, calm down panicked employees and stressed-out PR people). Don’t worry about overcommunicating.

1. It doesn’t matter if the crisis was caused by your mistake or your team or a fluke accident: accept responsibility for how it has affected customers and apologize.

Financial legacies are the most damaging, warns Jeff Killeen. “Don’t get trapped into adopting someone else’s budget,” he says, “even if the board puts pressure on you to lock down a plan. You need several months to assess assumptions, and budgets are products of assumptions, thoughtfully drafted. You need time to think about the right metrics and business drivers, and then you need time to think about the talent and resources necessary to pull it all off. By letting yourself compromise on this point,” he concludes, “you give up a slide of your credibility. God forbid you adopt someone else’s plan, knowing you want to revisit their assumptions. Six months later when you do that and you have to reforecast, the board won’t remember that that’s what you said you were going to do.

Dave is Dave Cote, who at the helm of Honeywell achieved on of the most impressive company turnarounds of any CEO in the twenty-first century. In his sixteen years in the job, from 2002 to 2017, he took the company— deemed “unfixable” by one leading analyst— from the brink of disaster to a share price rise of 245 percent. That’s compared to 115 percent for the S&P 500 during the same period. As for the company he was booted from, that was General Electric. Cote was fired by legendary GE CEO Jack Welch after Welch appointed Jeffrey Immelt as his successor.

Investors and analysts may also communicate directly with CEOs, providing well-founded criticisms and good arguments for change needed, or at least challenging a CEO’s current views. Nigel Travis highlighted that “I’ve always loved dealing with investors and analysts because it gives you that outside-in perspective. Who else could I talk to who’d studied and gone into Starbucks, into McDonald’s?” his two leading competitors. “It really enhances your understanding of the competition and broadens your external perspective enormously.” He shared that before leaving any investor or analyst meeting, he’d say, “I’ve listened to all your questions. Now, I’m going to ask you one: Tell me what were doing wrong. What would you do differently?” Being receptive to and actively soliciting such critique was only one way he combated status quo bias at Dunkin’.