The Rule of Fear and the Rules for Fear

How to Overcome a Central Managerial Challenge

Copyright: Roger L. Martin, 2021

What do Humphrey Bogart, John Wayne, Paul Newman, Clint Eastwood, Harrison Ford, Sylvester Stallone, Arnold Schwarzenegger and Robert Downey, Jr. have in common? The most obvious is that each was the best guarantee of a box office success and highest paid Hollywood actor of their era. Less obvious is that all the characters that they played shared one common defining characteristic — a characteristic that made them irresistibly attractive to audiences. They showed no fear — in fact confidence bordering on cockiness — in situations that would positively overwhelm any normal person with fear — whether Bogart’s Rick Blaine treating the Nazis controlling Casablanca as minor irritations, Harrison’s Han Solo joking while defeating the Evil Empire, or Downey’s Tony Stark wisecracking his way through battles to save the planet.

Some would argue that it was the actor not the character that made them irresistible and famous. Maybe. But remember that a single role, James Bond, played by six different actors across 24 (official Eon-produced) films from 1962 to 2015, generated over $12 billion in inflation-adjusted global box office receipts. And all the Bond actors did pretty much the same thing on screen. Each placidly dispatched his villainous adversaries and immediately thereafter made sure to straighten his tie and adjust his cuffs because 007 must look sharp while saving humanity!

We love these fear-impervious characters because at a deep instinctual level, we feel the power of fear. We experience fear of abandonment as children. As we grow, we learn to fear authority figures. When we become adults, we fear the inability to meet obligations like mortgage payments, and kids’ college fees.

The Rule of Fear

When fear gets intense enough, our amygdala fires in our reptilian brain stem. The fight or flight mechanism takes over, bypassing the cerebral cortex, and attempts to save the proverbial day. The very prospect, the threat of that instinctive reaction to fear is itself massively fear-inducing.

When fear is absent, we tell ourselves happy stories that motivate us to achieve aspirational goals. Eighteenth century America revolutionaries told themselves a story about creating a bold new form of democracy and framed a Constitution like no other. John F. Kennedy told Americans a story about putting a man on the moon and NASA went ahead and did it. Late 20th century scientists told a story of what medical insights would be generated if we sequenced the human genome and a decade later the seemingly impossible was done.

In sad contrast, when fear replaces confidence, we tell ourselves stories to give us permission to avoid doing the fearfully challenging thing and instead do unconscionable things: the Japanese are such a WWII threat that we must intern all Japanese-Americans; or if we allow gays to serve in the military, ‘unit cohesion’ will fall apart.

Narratives are extremely important when it comes to fear. A fear-inducing narrative encourages us to maintain the status quo rather than pursuing beneficial change because change is characteristically fear inducing. Fear of change often trumps fear of a burning — or even smoldering — platform. Even if there are many signs that the platform may be burning, it is often easier to tell ourselves a story that the platform really isn’t burning than to confront the fear of building a new platform.

Nowhere is this truer than in business. To avoid the fear of trying new, challenging things, business leaders tell themselves lots of exculpatory stories. Business leaders are under increasing criticism for declining to make long-term investments. Yet when a bold but risky long-term investment is called for, business leaders tell themselves a story that investors really are only interested in the short-term and will punish anything that deviates from short-term progress. Those interested in environmental sustainability are waging ever-more aggressive battle against corporations. Yet when business leaders feel fear-inducing environmentalist pressure for greater corporate responsibility, they tell themselves a story that deep down inside investors don’t really care about sustainability: they just want performance. When they feel activist pressure for more transparency, they tell themselves that the more data they reveal, the more vulnerable they become. When they are pressured to ensure ethical sourcing, they tell themselves that taking responsibility for their entire value chain is too high a risk.

Consequently, a central imperative for leaders is the management of fear: fear at two levels — their own fear and fear in their teams. The task is not to eliminate it but rather to maintain it at a level that motivates action but doesn’t trigger the amygdala. And their key tool is narrative. To manage fear productively, the leader needs to transform the narrative, both for self and for followers.

Fear at Unilever

When Paul Polman took over as CEO in 2009, fear ruled Unilever. He took its reins in the depth of the global financial crisis — a calamity that induced fear in the whole world. On top of that, Unilever was doing particularly badly — its brands losing share, its profitability shrinking, and its relevance dissipating.

But Polman managed his own fears. He understood the downward spiral that fear caused and that gave him the fortitude to manage the fear rather than fall prey to it. Instead he told a different story; a narrative of a firm dedicated to the longer term. He announced that Unilever would henceforth stop quarterly reporting and stop giving guidance. It wasn’t easy. But by managing his own fear, Polman was able to author an entirely different narrative.

While Unilever was in an inherently fear-generating position, backed by a fear-inducing narrative, due to the combination of its performance and the global financial crisis, and Polman had a set of well-established exculpatory stories to rely on to continue the status quo, he managed his own fear by reframing the fear-producing elements of his environment a positive, opportunity-laden narrative. That enabled him to lead Unilever in a radical and exemplary direction that has made it perhaps the most important innovator in corporate and social responsibility in the entire universe of global companies. Perhaps most importantly, he has provided a calming story for other CEOs to help manage their fears.

Fear at Lego

In 2004, fear ran high and deep in Billund, Denmark. The bucolic town of 6000 inhabitants in the middle of Danish farm country housed one of the world’s iconic brands: Lego. But in 2003, the privately-owned company run by third generation family member Kjeld Kristiansen had lost a staggering US$240 million on US$1 billion of sales. While the company had grown spectacularly and profitably under his leadership, in recent days, it had stretched too far geographically, and diversified too much into theme parks, games and electronics. The overexpansion had put the venerable company on the verge of bankruptcy — a thought that terrified the board, senior management, employees, Billund’s citizens, and, given the importance to its export economy, Denmark itself.

Seeing the need for a fundamental turnaround, Kristiansen turned to reins over to Jørgen Vig Knudstorp, who knew that calming fear was as big a job as staunching the financial hemorrhaging. When employees are fearful, the flight reaction translates into putting down their tools in both conscious and subconscious ways. They were paralyzed. They wanted to help but had no idea how they would contribute to a turnaround. Knudstorp knew that he had to attack the fear by creating a story of success and starting to produce outcomes that would provide data that reinforced the story.

His story to the company was that the core business was great — consumers and retailers loved the core product and wanted it to succeed. He just needed to get the company back to its basics to restore its health and momentum. That meant cutting product lines, stopping the diversification, selling the theme parks to Blackstone Group, and, sadly, shrinking the workforce by nearly half.

The story calmed fears and the actions turned around the company, setting it on course for a decade of uninterrupted growth that by 2014 propelled Lego past Hasbro and Mattel to become the largest toy company in the world — and the most profitable.

The Rules for Fear

The successful surmounting of fear by Polman and Knudstorp, and others who I have studied, suggests five Fear Rules for leaders in order to manage fear to a level that is motivating and not paralyzing.

Rule One: Eternal Vigilance is the Price of Freedom

Fear is not something that can be eliminated. It is always lurking. It is a human instinct that is there to protect us. Even though there was little fear at Lego in the decade before 2003, it reached a fevered pitch in the space of one year. Watch for it as it rises in you or your team. Dealing with it is urgent business — not something that can be put off. Fear generates actions that produce more fear and an acceleration of the damage. When it comes to fear, now is the time to work on it.

Rule Two: Your Fear is Job #1

Leaders won’t be able to help their team overcome their fear if they are overcome themselves. Hence the Fear Rule for leaders is to work on overcoming your own fear yourself before you even think about attempting to manage the fear of your team. And if you can’t generate a positive narrative to help you overcome your own fear, you should step aside because you are incapable of productive leadership at that critical time.

Rule Three: The Basis of Fear is a Narrative

Fear is generated by stories we tell ourselves. We take data-points and assemble them into narratives that help us understand the world. But sometimes, we assemble those data-points into scary stories. As a leader, you must understand each person’s story to understand every person’s fear because their narrative drives their actions. If you don’t understand the story, you won’t understand the fear. Additionally, if you deny the story, you send the fear underground where it is harder to counteract.

Rule Four: The Antidote for Fear is a Happy Story

To conquer fear, a leader needs to craft a compellingly happy story. That narrative needs to build a bridge for the organization from the scary story to a happier place. If it is entirely independent of the scary story, it won’t be credible and compelling. Both Polman and Vig Knudstorp reframed the scary story as a set of data points that could be migrated to a happy narrative and reduced fear to a level that enabled employees to work with enthusiasm. But of course, Knudstorp and Polman had to overcome their own fear by telling themselves a happy story of their ability to lead their respective organizations in a way that caused the happy story to become true — and both were able to do just that.

Rule Five: Tell the Happy Story Over and Over

In the face of the fearful story, it takes the happy story some time to sink in and truly replace the fearful story as the dominant narrative. The replacement doesn’t happen with one telling. For this reason, it is critical to keep reinforcing the happy story until it, not the fearful one that preceded it, is second nature. For leaders, this means telling the happy story until they are absolutely sick of hearing themselves talk. Only then is it likely to be the core story across their organization.

Concluding Thoughts

Neither the world nor any organization in it can be stripped entirely of fear. It is a naturally occurring aspect of life on the planet. Some amount of it is motivational. But too much is counterproductive, even debilitating. A key task of leaders is to recognize as and when fear has risen to an intense enough level in themselves and their teams to take action — first by managing their own fear and then by managing their teams’ fears.

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Roger Martin

Roger Martin

Professor Roger Martin is a writer, strategy advisor and in 2017 was named the #1 management thinker in world. He is also former Dean of the Rotman School.