Northwestern Mutual CEO: 3 lessons I’ve learned from managing economic crises before the coronavirus

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Companies today are making significant changes to maintain business operations while protecting their workforce, customers, and the community from the spread of the coronavirus. Although markets are volatile, and there are many unknowns, I have deep confidence in the long-term resilience of our country and economy.

Why do I feel this way? Because I’m fortunate to lead a company where we’ve seen it before. 

In our 160 years, Northwestern Mutual has overcome recessions, the Great Depression, natural disasters, wars, and even a pandemic flu—and each time, society, the economy, and markets bounce back. In more than three decades at Northwestern Mutual, I’ve seen five major market downturns—and the resilience that follows. 

There is no one-size-fits-all approach to overcome these challenges, which place significant pressures on businesses and people’s day-to-day lives, but there are lessons to be learned from a longer-term view. When I was named CEO in 2010, the country was still in the early stages of emerging from the 2008 financial crisis. I’m leaning on three major lessons from that period as we navigate the COVID-19 crisis.

First, financial strength—which means money in reserve, cash on hand, and a strong capital position—takes foresight and preparation, and is necessary to weather economic storms. Prior to 2008, I saw many other companies focus on how quickly they could grow, rather than the importance of a solid balance sheet. We at Northwestern Mutual knew that the challenges coming out of the market meltdown in 2008–09 could be managed, mainly because we took long-term financial strength very seriously throughout that time.

Early on as CEO, I traveled to Japan and formed relationships with leaders in the life insurance industry there. They had experienced decades of low interest rates and shed light on the consequences that had on their companies. I learned from them the importance of wisely managing expenses and maintaining financial strength in a low-interest-rate environment. Even during recent years of record-high stock markets, we have followed this advice.

While we could not predict the coronavirus and its rapid spread across the globe late last year, we knew we were deep into a bull market and needed to be prepared for any potential correction. As a result, we built up our capital reserve to ensure our financial stability. We also regularly stress-test how various catastrophic events could affect our business—including crises in a low-interest-rate environment—which has given us the confidence to face the current situation from a position of strength.

Second, businesses should plan for the long term, but maintain flexibility. In a society of immediate gratification, many businesses are tempted to make decisions based on short-term opportunities for gains. But lasting success takes discipline over time—in good times and through challenges. 

It is not always easy and requires patience and practice, but those that plan for the long term are not only able to withstand challenges and market turbulence, they can also seek out opportunities in this period. (Northwestern Mutual offers financial planning services to businesses, and therefore could profit from this advice.) For organizations and individuals that have the means, now is an excellent time to seize long-term investing opportunities in the markets. Long-term investors should take advantage of buying opportunities in a down market, knowing that the economy and markets will bounce back.

Third, leaders need to communicate with authenticity and empathy. Employees and consumers will remember how companies acted and communicated in a crisis long after it’s over. The safety and well-being of employees, clients, and the community comes first, and leaders need to look at how they can provide resources and support during difficult times.

Transparent communication in a crisis is essential, and employers have a critical responsibility to relay pertinent information to their employees quickly and thoroughly. A recent Edelman survey found that employers were people’s most trusted source of information on the coronavirus, trumping government and health company websites and traditional and social media. Nearly two-thirds of respondents wanted updates from their employer at least once a day. 

At my company, we have made a commitment to talking with our workforce often—even if the updates are small—so that we keep the conversation going. Our regular communications range from providing the latest guidance from the CDC, to reassurance that we’re prepared for this, to tips on working remotely and the technology that’s available. We’re ensuring that our employees feel supported and know where to go if they have questions or concerns.

At this difficult moment, America needs to remember that we have overcome significant setbacks many times in the past. We’ll get through this one too. If business leaders focus on what’s under our control and lead with confidence, we’ll come away from this even stronger than before.

John Schlifske is chairman, president, and CEO of Northwestern Mutual and a member of the company’s board of trustees.

More opinion in Fortune:

—To fight tomorrow’s pandemic, we need to think like the military today
—Prescription drug costs are spiraling, but price controls are the wrong solution
—The Fed may have fundamentally altered the nature of risk in the stock market
—Why the U.S. needs a new corporate bailout structure—one that doesn’t rely on loans
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEOs
—WATCH: The CEO of Canada’s biggest bank on the keys to leading through the coronavirus pandemic

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