When things are going well at work and people are more or less getting their jobs done, things are pretty routine for most leaders.  It is when the shit hits the fan that we truly find out what leaders are made of and what their values are.

It’s when the organization is getting low on funds, or when the quarterly goals aren’t met, when the test trial doesn’t turn out the way you were betting it would or when a big ball gets dropped—that’s when you find out what a leader is made of.

When these things happen, we all get scared.  What does it mean for us about the stability of ourselves and our loved ones?  Will I get fired? Will my reputation get scarred? People will know that I have failed.  These are all normal feelings for problems small and large.

It is easy to get overwhelmed by the fear and make quick, reactive decisions.  Yelling at your people, taking them off the project, blaming them for mistakes that may or may not have been their fault.  Even firing people.

Sometimes our hand is forced by our Board of Directors or our investors. They are unhappy and need to be appeased.

At this point, you as a leader, have a choice to make about how to handle this situation.

You can react, or you can learn from the situation.  You can accept responsibility for the bind your organization is in and, with your team, put a plan together to improve the situation. You can throw a sacrificial scapegoat to your investor group to save yourself from having to examine your own leadership to find out where things went off track.  Your decision on how you handle this reflects your character and your values.

Great leaders have the courage to do the hard things in the face of challenge.

• You must be able to admit your own shortcomings. Did you, as the leader, plan for the possible negative outcome? Did you put contingencies in place—just in case?  Did you provide clear direction and accountability for the outcome you and your stakeholders wanted to see?

• You must be courageous enough to skillfully have the hard conversations. Tell the truth about what isn’t working and find out what needs to change to get it fixed. These conversations need to be with your team and with your Board and/or investors.

• You must be transparent about the situation with all involved. It takes courage to admit failures, shortcomings or mistakes, but being honest about the problem and what is being done to rectify it to everyone involved is critical.

• You must set aside blame and work harder on supporting your team. Blaming someone for what did not go right will not fix the problem. Creating clear expectations of each other and holding each other accountable in a supportive atmosphere will pull you together as a team in the face of challenges.

• Have your own contingencies. As a leader, you need to be able to stay steady with your own values. You should not allow yourself to be put in a position of acting against your values because you don’t have another option. Make sure you have savings set aside so that you can leave your position if your character is put at risk. Without that, you are subject to fear and reactivity rather than rational decisions.

I have personally seen far too many leaders who, in the face of challenges, have taken the easy way out and thrown blame around, even fired people trying hard to do a good job. When that happens there is never a good outcome. At that point your team stops trusting you, your Board/investors know that you cave under pressure, and if you have any decency at all, you feel terrible.

When you can see things not headed in the right direction courageous leaders pull people together and talk about it. They work like crazy to head off the problem. And if they can’t, they accept responsibility and work hard to move on in a positive direction.

This is not easy—it is simply courageous.