The Stockdale Paradox

  “You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.” — Admiral James Stockdale.

This past year our resiliency, creativity and survival instincts were all tested by a pandemic, something we have not experienced before in our lifetime.  Stories of past pandemics were abound, but the experience of not being able to leave one’s house, working from home, home schooling and a deathly disease lurking in the most innocent carriers, were all new to us.

The banking industry rose to the occasion admirably.  Team members worked 24x7 to disburse CARES Act funds to small businesses nationwide.  Others put themselves in harm’s way to keep branches open.  We made adjustments on the fly, introduced new technologies literally overnight, and coped – much like our customers did.  We all knew this isn’t a long-term problem, and were wiling to go all out for a short-term push.  And then reality hit: we don’t know how long this will last.  When the second surge hit recently, we were emotionally unprepared.  Our reserves have been depleted, even if our resolve remains strong.

The Stockdale Paradox shines a light on the present moment and contains wisdom for how we can manage the unrolling crisis.

Two Harvard professors, Boris Groysberg and Robin Abraham, recently asked 600 global CEOs across industries what concerns were keeping them awake at night. While the topics ranged widely, a handful of overarching mental tasks emerged: Comprehend complex, rapidly changing circumstances accurately, and respond to those circumstances keeping both immediate and long-term goals in mind.

As a person born in Israel, I understand the challenges of responding to a sudden change in one’s environment without a clear resolution or end date in sight.  COVID thrust our country into a situation similar to a state of war where little information is available, much of which is unreliable and uncertain.  Future events can unfold in a myriad of opposite directions, and evidence supports all conflicting eventualities.  Most importantly, none of us knows how long this will last.  We can speculate, but we don’t know for sure.  And, the longer this lasts, the greater the implications, both negative and positive, on our country, our institutions, our businesses and our people.

The Stockdale Paradox facilitates a balance between the necessity of letting go of basic survival mechanisms and the flexibility and faith to learn the new ones.  While the COVID environment doesn’t threaten our very survival on a personal level, which is where the Paradox was created, it certainly impacts our individual well-being and behavior patterns across the personal and professional dimensions. 

The pattern of human response to disasters has been shown to be surprisingly similar across types of disasters, duration and geography.  We likely resort to a similar pattern when a pandemic disrupts our daily lives so profoundly.

Short term disasters entail initial denial, acceptance, recoil, and then return to normalcy.  A week or two after COVID hit, most of us followed that pattern, expecting speedy resolution and making short-term adjustments. However, we now realize that our time-frame is far longer than we initially anticipated.  We are in a holding pattern awaiting a vaccine, which increases the uncertainty of timing and systemic recovery.  The most recent surge we are experiencing is throwing us into a different, longer-term, pattern, as rescue still has not come.  We are shifting from short-term to long-term crisis, and the emotional cost to this adjustment is quite high. 

We have already witnessed the effect of adaptation upon various industries and businesses.  Restaurants pivoted to delivery and take-out services, started moving to outdoors spaces and some even expanded their business during these times.  Others, who would not shift their business model, are languishing.  Acceptance of the new environment and learning to prosper in that environment are both essential survival skills.

We all had to unlearn what worked so very well for us over the years, and rebuild our lives and business models to function in this new, foreign environment.

There is no point at which this becomes easy. Stockdale notes that success in a long-term survival situation means getting up and fighting each day. “The persistent practitioner of endurance who carried the day for courage. The game of physical intimidation was not won or lost in one grand showdown. The hero of us all was the plucky little guy who made them start all over every day.” 

Our job as bankers, leaders and people is to recognize this is happening to us, accept it and learn to survive day-by-day, “following the sun”, until the rescue – aka vaccine – arrives.  We are battle-fatigued, exhausted from the very transition we endured from the familiar to the unfamiliar.  Many of us wished we could work from home, and now that we do it is not the stress-reducer we envisioned it to be.  We also found new small pleasures, from watching our plants grow, blossom and thrive to sleeping more than when we had commute time added to our day.

As we start 2021, here are the lessons the Stockdale paradox can teach us:

• Stockdale repeatedly emphasized the practicality of integrity, the fact that the honest person cannot be blackmailed, shamed, or paralyzed from within. Bad decisions, failures, and mistakes are inevitable, especially in hostile circumstances; Stockdale was vehement on the need to acknowledge your errors, to yourself and your team.

• COVID-19 pandemic is affecting different people differently. You colleagues and family members are likely to be in different phases of reaction to the crisis. Keeping this in mind may be helpful. 

• Give yourself a purpose each and every day, a task to complete or an event that will change the daily monotony.  

• All of us are leaders – in our family, at work.  Motivate others past that doubt—by reiterating the group’s purpose and operationalizing it as tasks, be it at home or at work.  A purpose yields goals, and goals yield tasks.  The achievement of the tasks yield fulfillment, satisfaction and hope.

What we need for 2021 is perspective.  Life is different, but it is still life, and not all is lost.  The values that we held on January 1, 2020 have not disappeared.  These values still matter. Those ideals do not change because of COVID. If you truly embrace those ideals, they can still guide you in 2021, even if we do not know when the crisis will end.