A crisis strips away the comfortable illusions of leadership. It brings pressure, uncertainty, and hard decisions with no obvious right answer.
The businesses that survive are rarely the ones with the best processes or the biggest teams. They are the ones with the clearest grip on reality and the confidence to act anyway. That tension between realism and resilience is at the heart of a mindset I’ve come to value deeply in my work: The Stockdale Paradox.
The Paradox at the Core of Survival
Admiral James Stockdale survived more than seven years as a prisoner of war in Vietnam. He was tortured, isolated, and never knew if he would make it out alive. Yet he remained mentally intact. Even strengthened by the experience.
His insight later became known as the Stockdale Paradox, the principle of confronting the brutal facts of your current reality while maintaining absolute belief that you will prevail in the end.
Stockdale observed that it wasn’t the pessimists who struggled most. It was the optimists. The ones who convinced themselves they would be home by Christmas, then Easter, then summer. When those moments came and went, the emotional crash was often fatal.
Survival demanded something more difficult. A clear-eyed view of the pain, combined with a refusal to give up. That is a mindset that applies far beyond a prison camp. It is one I’ve seen play out in the boardrooms of companies facing existential threats.
Crisis Has a Way of Revealing the Truth
When organisations call us, it is often in the middle of something fast-moving and deeply destabilising. Financial collapse. Legal exposure. Operational failure. Reputational damage. Not theoretical risks, but live problems.
The most common reaction is hope. Hope it will blow over. Hope that if they stay quiet, the media will move on. Hope that staff will not notice, clients will not leave, or the regulator will not act. Hope alone, in a crisis, can be blinding.
What we have seen is that the leaders who stabilise their businesses are the ones who lean into the discomfort. They ask the hard questions early. They do not try to put a gloss on the numbers or delay the decision until next quarter. They face reality and make space for action. It is not an easy mindset. It requires the same thing Stockdale described. A willingness to hold two conflicting truths at once:
Things may be worse than we want to admit.
We can still make it through.
Leadership in Crisis Is About Duality
It is not enough to be tough. Nor is it enough to be optimistic. The real leadership challenge in a crisis is to keep your nerve and keep your clarity. That means acknowledging:
When the balance sheet is broken.
When your messaging is making things worse.
When people inside the business no longer feel safe or confident.
And still saying, we are not finished. There is a path forward. It will not be easy. But it is real.
This is not theoretical for me. I have been in the room with leaders who could barely speak because the pressure was overwhelming. I have seen silence do more damage than bad decisions, and I have seen what happens when a team regains control. Not by knowing all the answers, but by being honest about the questions.
Why Mid-Tier Businesses Need a Different Kind of Resilience
In large corporates, crisis management is a function. In small firms, it is instinctive. But mid-sized organisations, especially those with turnover between £1 million and £100 million, face a more complex problem. You have stakeholders. Brand equity. Regulation. Staff to reassure. Clients to retain. But you are not resourced for live crisis response.
In this context, leadership matters more than structure. And mindset matters more than process. That is why I believe the Stockdale Paradox belongs in every board-level conversation about crisis. Not as a motivational quote, but as a guiding principle for how to lead when the playbook runs out.
Calm, Clarity and Confronting Reality
In the early stages of a crisis, there is often a narrow window where strong decisions can stop a situation from becoming irreversible. But that window is easy to miss if the leadership team is still clinging to how things used to be or how they hoped things would turn out.
The Stockdale mindset gives you the psychological stability to say: this is where we are. This is what we are facing, and we are not going to lie to ourselves about it. That clarity does not just stabilise a business. It restores confidence. Internally. Externally. And most importantly, at the top.
When crisis hits, it is not the slick presentation or the clever campaign that gets you through. It is your ability to face the facts and still believe in your outcome.
That is what leadership looks like when the pressure is real. And in my view, it is what separates businesses that recover from those that do not.
Who’s behind this post?
Simon Larkin
Director & Co-Founder
Simon Larkin is a Fellow of the Chartered Institute of Marketing and a Chartered Marketer. As Co-Founder of Arx Nova, he brings over 20 years of experience in crisis communications and marketing. Simon works with leadership teams to manage reputational risk, control the narrative, and restore stakeholder confidence during periods of uncertainty.
