Harvard Business Publishing

While playing the new Sims game Spore, a game where you get to make your own species to compete against others, my evolving species of Bloopies encountered a much tougher group of Stingfangs (lions to my puppies). But when I commanded my lead Bloopie to roar, guess what happened? The Stingfangs, as a pack, turned and fled! Surprise: even the toughest creatures and managers out there are vulnerable to panic from time to time. We're social creatures and we are built to feel panic simply because others around us are, regardless of what's really going on in the world.

Often panic is more dangerous than whatever the original threat was. When FDR said in his first inaugural address in 1933, in response to the great depression, "all we have to fear is fear itself", this is exactly what he meant.

Panic is extremely old. The fight or flight response is so deep in our genes, that like the Stingfangs, we don't have control over the response. And what's going on in the financial markets has many people panicking well beyond the reality of what has happened so far.

Here are three steps to get back to reality:

1. Do not face panic alone: find a partner. Head to happy hour with a co-worker, friend, or family and talk about what's going on. The wider your network to vet out your fears, the more balanced your view of the world will become. The worst thing in the world to do is pretend to the world you're not afraid, and try to manage it all alone. Any irrational fears will fester and grow, slowly eroding your ability to take smart action.
2. Make three plans. Pick one or two wise friends or colleagues and sit down for a planning session. Make three plans: Worst case, moderate case, best case. For each plan imagine out 3 months, 6 months, and 12 months. Don't worry about how accurate these forecasts are: the goal is to get you proactive. Instead of obsessing about what might happen (defensive) you are taking action to carve out possible futures and anticipate them. As more bad or good news comes in, adjust your plans and reconvene with your crew.
3. Redouble your stress relievers. Whatever you do for stress relief, going to the gym, playing X-box, playing with the kids, plan to add 10-20% more of that activity to your schedule. Build in some extra buffering into your daily psychology to balance out the added stress. If your panic is based on a truly serious issue, it will be something you will have to deal with over the long haul. Build in support for yourself to handle that long-term stress now. Physical stress relief is often better than mental: we experience stress physically and need physical activity, even walking, to help relieve it.

How do you as a manager or individual handle panic and intense stress? Let me know.