On the evening of Friday, March 14, 2025, the White House issued an executive order that reverberated through federal agencies and their associated programs. Among the entities slated for elimination to the maximum extent permissible by law was the Community Development Financial Institutions Fund (CDFI). For many, this announcement was a late-night shockwave, triggering a cascade of urgent communications and frantic planning. For the CEO of B:Side Capital, a Small Business Administration (SBA) lender and a certified community development financial institution, the order represented a direct threat to a significant portion of their organization, necessitating immediate strategic formulation for the impending Monday morning.

The executive order, titled "Continuing the Reduction of the Federal Bureaucracy," signaled a broad initiative to streamline government operations, a stated goal of the newly formed Department of Government Efficiency (DOGE). While the author, who also teaches leadership at Arizona State University, anticipated scrutiny for mission-based lenders, the comprehensive targeting of the CDFI Fund was a dramatic development for which no one, including leadership at B:Side Capital, was fully prepared. However, what was in place was not a contingency plan for this specific scenario, but rather a pre-established "code" – a framework of deeply ingrained principles and behaviors developed over years of study and reflection, which transformed a weekend of crisis into a structured series of deliberate decisions.

The efficacy of such a pre-defined operational code was starkly illustrated by the author’s experience. The abstract values often espoused in leadership circles, such as "Integrity" or "People First," proved insufficient when confronted with the immediate, high-stakes reality of the executive order. These platitudes, while well-intentioned, lack the specificity required to guide concrete actions during a crisis. They can be interpreted in myriad ways, allowing for rationalization of decisions that may deviate from core beliefs. For instance, "Integrity" offers no clear directive on whether to implement staff cuts, publicly challenge the administration, or adopt a strategy of quiet observation. This inherent vagueness, the author argues, is precisely what leads leaders who rely solely on such principles to drift from their fundamental convictions.

The Genesis of a Crisis Code: Lessons from History and Academia

The author’s insights are drawn from extensive research into historical leadership, particularly figures who navigated periods of profound societal and economic upheaval, from the Roman Senate to the Depression-era Army. Their findings, detailed in their latest work on crisis-era leadership, reveal a consistent pattern: leaders who maintained stability and efficacy under extreme pressure did not share a singular temperament or strategic blueprint. Instead, they possessed a robust "moral architecture" or code. These codes, while varied in their specific expressions, reflecting unique backgrounds and perspectives, shared a critical commonality: they were meticulously developed and solidified before the onset of crisis. This proactive approach, the author emphasizes, is not only achievable but essential for any leader seeking to weather unforeseen storms.

The process of developing such a code, as outlined by the author, involves three fundamental steps, designed to create a framework that is both resilient and actionable when faced with overwhelming pressure.

Write a Line Specific Enough to Violate

The cornerstone of a functional leadership code is a commitment stated not as a broad value, but as a specific, observable behavior that one pledges not to engage in, regardless of the perceived cost. Vague declarations, such as "I will not compromise my integrity," are rendered ineffective by their susceptibility to self-serving rationalization. Individuals can easily convince themselves that their integrity remains intact even after making ethically questionable decisions.

In contrast, a behavioral commitment like, "I will not tell my team the business is fine when I know it is not," establishes a clear, binary boundary. This statement represents a tangible line in the sand; adherence or transgression is unambiguous.

During the March 2025 crisis, the author’s pre-existing line was immediately relevant: "I will not soften the truth with my team just to calm fears and placate them." This commitment dictated a direct and honest communication strategy. Consequently, the author opted to film a candid video message, informing the team that a significant portion of their operations faced an existential threat. The message emphasized a methodical approach to confronting this challenge while preserving the organization’s core culture. Although this directness created discomfort and a personal inclination to offer more immediate reassurance, the author recognized that transparency, however challenging, represented the most direct path to collaborative problem-solving and was what the team deserved.

To ensure the specificity and robustness of one’s own behavioral lines, the author suggests a practical test: evaluate the line against the most challenging situation encountered in the past two years. If the line does not yield a clear, decisive answer in that context, it requires further refinement to be sufficiently specific.

Build the Restraint Before the Offer Arrives

A critical insight drawn from historical analysis, particularly the legacy of figures like George Washington, is the importance of establishing principles and boundaries long before the moment of temptation arises. Washington’s decision to relinquish power, setting a precedent for peaceful transitions, was a deliberate choice made years in advance of the opportunity to seek a monarchical position. This foresight is crucial because the "moment of maximum temptation" is the worst possible time to formulate ethical guidelines. By then, the allure of immediate gain or perceived necessity often cloaks potentially compromising actions in persuasive justifications.

Leaders must be acutely aware of the seductive nature of actions that may feel instinctively right or expedient in the short term, as these instincts can often lead to detrimental outcomes. In the aftermath of the March 2025 executive order, the author observed a powerful temptation within the industry to frame the situation as a Manichean battle between good and evil, launching public attacks against the administration. While this emotional response was understandable and tempting to join, it was ultimately deemed counterproductive.

B:Side Capital’s established culture of restraint, cultivated over time, dictated a different course. Instead of engaging in public confrontation, the organization focused on strategic engagement through established channels in Washington. The objective was to constructively articulate the value and impact of the CDFI program to the policymakers who held the ultimate decision-making power. This measured approach underscores the principle that non-negotiables should be clearly defined and communicated prior to the emergence of significant pressure. Furthermore, these commitments should be shared with a trusted individual or group who will act as an accountability partner, ensuring that private preferences do not become easily circumvented justifications. A restraint kept private, the author notes, remains merely a preference, lacking the binding force of a publicly declared commitment.

Test Your Values Every Quarter

The erosion of leadership integrity rarely occurs in a single, dramatic act. Instead, it is a gradual process, characterized by a series of small, defensible decisions that incrementally move individuals away from their intended ethical compass. The cautionary tale of Seneca, the Stoic philosopher who ultimately justified the transgressions of Nero’s court, serves as a potent historical reminder that intellectual prowess offers no inherent immunity to moral drift.

A simple yet effective method for identifying and rectifying this drift is a quarterly self-assessment. This involves identifying an individual whose moral judgment is held in higher regard than one’s own – someone who will challenge comfortable narratives and easy rationalizations. This trusted advisor should be presented with the most difficult current decision, either verbally or in writing. The critical step is to scrutinize the explanation for any logical gaps, unspoken assumptions, or reliance on the advisor refraining from asking pertinent questions. These weak points, the author contends, are precisely where character can falter and where drift takes root.

This rigorous assessment should be conducted on a fixed quarterly schedule, irrespective of how smoothly the preceding ninety days have proceeded. The test is particularly vital for decisions that seem uncomplicated or benign, as these are often the very ones that insidiously erode one’s moral foundation.

Broader Implications and the Path Forward

The executive order targeting the CDFI Fund, while a specific instance, highlights a broader trend of governmental re-evaluation and potential restructuring of programs. The CDFI program, established in 1994, has been instrumental in channeling investments into underserved communities across the United States, providing critical capital for small businesses, affordable housing, and community facilities. As of the end of fiscal year 2023, CDFIs had collectively deployed over $100 billion in capital to more than 1.2 million businesses and individuals, with a significant portion of these benefiting low-income individuals and communities. The potential elimination of the CDFI Fund, therefore, carries substantial implications for economic development and financial inclusion initiatives nationwide.

The author acknowledges that their framework includes two additional components – a "growing edge" and a "transmission plan" – which are integral to a comprehensive leadership strategy. However, the three steps outlined are presented as the immediate and most critical elements for navigating sudden, shocking crises.

The unpredictable nature of "black swan" events means that no business or organization can entirely insulate itself from unforeseen challenges. The only reliable preparation, the author concludes, lies in proactively defining one’s character and operational principles. This week, leaders are urged to dedicate time to determine the individual they aspire to be when faced with adversity. This involves blocking out an evening to articulate a personal or organizational code, ensuring its language is specific enough for rigorous testing, and entrusting a copy to a trusted accountability partner. The impending crisis, whether a federal directive or another unforeseen disruption, will inevitably demand a code of conduct. The fundamental question facing every leader is whether that code will be forged in the crucible of crisis or pre-emptively constructed during times of stability and foresight.