 My name is Professor Michael Freese. I am a professor for management and organization at the Asia School of Business in Kuala Lumpur. I have been working internationally in Germany, in Singapore, in London, in the United States, among others on failures, on errors, on error management. And I have, in my research across the last 35 years, I've done a lot of research on the issue of how to deal with failure, how to deal with errors, and how to deal with crisis. And therefore, I want to share with you some of the understanding of the psychology of a crisis. We will talk about how we feel overwhelmed by a crisis, and I will talk about two issues here that are particularly important. Then we will be talking about the understanding of exponential growth, and then the do's and the don'ts, the do yes and the do not of crisis management, and then maybe some positive effects of a crisis as well. A crisis is difficult, as you see in this slide three, because it calls into question everything that we know, everything that's secure, our own self, what we are doing, our routines. It demands new answers, new thinking, and it produces deep emotional states, often very negative emotional states. We have a feeling of breakdown of depression, and these are the kinds of things that we need to deal with in a crisis as well. And of course, we can also start new beginning, we can start something that is new and interesting, and they're both positive as well as negative cycles, and I want to talk about them as well. The most important issue though, is that we have a limited working memory. So whenever we talk in psychology about the seven plus minus two, so we can keep seven items, seven ideas, seven plans, seven facets of something in our head, but not much more. And so whenever we are in a crisis situation, we have to deal with many, many different things. We have to deal with our own stress, we have to deal with our own worries, we have to deal with our own, maybe even depression, our own negative thoughts. We have to deal with our own internal dialogue. We may say, oh, why did I do this wrong? Why was I in the completely wrong direction? Now you can imagine if I have to deal with many, many, many different things, more than seven, then I make mistakes. So whenever our working memory is overloaded, we do things that are wrong. We rely on our own routines that are no longer working and shouldn't be used anymore. We rely on, we have to deal with our anxieties, our worries, etc. And we have to deal with other people's anxieties and worries as well in a crisis situation. And all of this at the same time, we have to think newly about how to approach this problem, this task. So when the memory load is high, we make errors. And this is also true in organizations. Organizations have routines as well. And whenever these routines don't work anymore, they start to feel threatened. And when they're threatened, they're actually overloaded as well. Or any member in the organization is overloaded in the same way that I just described. And that often leads in an organization to constriction and control, to centralization, formalization, increased accountability, reduced participation and rigid responses. Again, we're using sort of the routine responses. No good. We should rather be oriented towards the task itself. And the task itself is, of course, we need to worry about how to deal with the crisis. The second issue is people don't understand explosive growth. So there's lots and lots of research, for example, in the HIV epidemics. Dona showed in detail that even experts underestimated the exponential growth. And then sort of funny example is the example of the king of India who lost the game of chess with a sage. And he told the sage, what do you want from me? And he said, well, I want one grain of rice on the first square of the board, the chess board. And on the second one, I want two grains of rice. On the third one, I want four, et cetera, eight on the fourth, 16 on the fifth, et cetera. So I hope you can do that. And the king said, oh, okay, no problem. I can easily do that without knowing that exponential growth is exponential. So the total number of grains on the board would then be 18 quintillion. I'll show you the number here on the slide, seven, 18.5 quintillion. And that is 210 billion tons of rice. This is exponential growth. And you see that the exponential growth is indeed happening in every country in the beginning of the COVID-19 crisis. Every country had to go through an exponential growth in the beginning. And then it depended on how they dealt with it, whether the exponential growth was sort of slowed down or not. So therefore it is not surprising that in every country, people made mistakes in not understanding this exponential growth. Because nobody really understands immediately exponential growth, except maybe a few mathematicians. And even they don't always use it in their everyday life either. Now we come to the point of crisis. Now what do we do to manage a crisis? Well, most important, we have to reduce the working memory workload. Second most important, we have to keep our action capability intact. Now remember, everyone sort of said, why didn't we prevent the crisis? Now that is easier, more easily said than done obviously. And in this case, it's also useless, quite frankly. It is much more useful to say, okay, we have a crisis. How do we deal with it? Because crises are often, most frequently as a matter of fact, they are unexpected. And these crises may appear everywhere in medicine as we see with COVID-19. In our marriage, as we often experience in economic situations, in organizations, in our career, everywhere there are crises that are unexpected. So then it's better to say, okay, we expect crises to happen, but we want to reduce the negative consequences. So instead of just focusing on the prevention side, we should focus on the management side as well. And management means we avoid the negative consequences as far as possible. We do quick damage control as quick as possible again. We reduce the rigidity cycle, the cascades, the crisis, the error cycles. And we reduce the occurrence of future crisis, maybe in the future, even though we will always have other types of crisis coming up again. So what are the do's? What is positive crisis management? The first one is always quick detection. How do we quickly detect that there is a crisis? Well, we can take our feeling that there may be something wrong seriously. We may also get communication from others. Now, in terms of leadership, that implies that I have to be open to communication that I don't expect and I don't want to hear. So I have to have a very open way of communicating with others. Otherwise, I will not have a quick detection. And of course, the longer a crisis is developing, the stronger is the exponential growth. So there is an importance of anticipation and expectation of crisis. If I am prone to hubris and I believe that everything is under control, no problem. We will not have a problem here in our company. We will not have a problem here in our country. Then of course, I will not detect it quickly enough and therefore it will actually increase exponentially. So you need a humility and you need to listen to experts. Experts who may be a little more prone to understanding the situation. And of course in organizations, bigger organizations such as countries, you probably want to have experts who are real experts in the field who will be helping you to make the right decisions. That of course implies that you have to have a low degree of defensiveness because you never expected it in the first place. And you sort of say, why didn't I expect it? Why was I so stupid? And you don't have to be worried about that part. Remember, as long as you're thinking of those things, as long as you're thinking what is it about me now, the less you can actually deal with the crisis. And that is true of every individual. It's true of every leader. It's true of every organization and it's true of every leadership in a sense. So there's also, so if I'm defensive, that's bad. I also need low distance of reporting. I need relatively low degree of bureaucracy because otherwise it's going to take too long. Now, what is the bad this cascades? How does that work? Now remember, if I have a lot of things in my mind, if I have my negative dialogue, why was I so stupid? Why didn't I think of that? If I second have the negative blaming dialogue, I want to blame others and I have to find the right person or the right country or the right whatever to blame. And then in that case, of course, it means that I will be oriented towards that instead of oriented towards dealing with the crisis itself and with the consequences, the negative consequences of the crisis. So I will orient myself towards the wrong things. So sometimes it's easier if I say, sorry, and I get forgiveness because then it's gone, it's done with, and then I can deal with a crisis situation. That's true of groups. That's true of organizations, as I said, and it's true of countries. What are the don'ts? Any intransparency is negative. So it has to be transparent to me. It has to be transparent to others. So if it's unclear, if I don't want to know or don't know or cannot know or do not understand yet, that's always a problem. So you have to do quite a bit of understanding. If you start to do the blame game, it directs away the detention from the problem. You also need to worry about self blame because self blame also takes up working memory. And therefore, all of these kinds of things you have to sort of push aside, even your negative buries, you have to push aside. And there are actually good suggestions how to do that, but I'm not able to talk about them right now. So maybe there are even some positive effects. The positive effects, it's sort of difficult to see why should COVID-19, a pandemic where people die, where people suffer, where it is clearly terrible. Why should there be any positives in there? I'm not saying that we should be glad to have COVID-19. Obviously, it's terrible. It's a terrible situation to see people suffer and sometimes even die. But it also makes sense at times to say, what can we learn? What is there that helps us? And there may be a few things. We may overcome the leadership crisis that exists in the world, the kind of cynicism about the importance of good political and otherwise leadership, also leadership within oneself. You also have to lead yourself. So there is maybe a bit more, a bit less cynicism, a bit more acceptance of leadership as well. The second one is the importance of health. We have been oriented towards economic issues because of the economic crisis, not so far back. And we should probably reorient ourselves again towards issues of well-being and health, rather than just on the economy. There may actually be a new wave of solidarity in countries that are affected by COVID-19. And we will have an understanding of the issues that are happening to people who don't have the economic resources to deal with the problems easily. Maybe there's a discussion of health insurance in all countries. And maybe we learn to become a bit more resilient again under conditions of uncertainty and crisis. And there may even be some opportunities for entrepreneurs, for example, in this situation of crisis. So by and large, then, we should come back to maybe what the Chinese saying of what it means, why G is crisis is danger, but it's also opportunity. Maybe we should come back to that a bit more. If you like the talk, I'm glad to give some more lectures on leadership in a crisis, on learning from mistakes and errors, and on how to deal with all negative emotions in a crisis. But each one, of course, is an old talk. Thank you very much. Bye-bye.