The Noggin Blog

Leading Through Crisis: What it takes

Posted by James BW on Nov 8, 2018 3:00:00 AM
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Show me an executive who thinks they’ve got crisis leadership down pat, and I’ll show you someone who doesn’t have the first clue about the nature of crisis. That’s right. Crisis is nothing like you think. Of unusual-and I mean unusual-frequency and impact, a crisis, especially novel crisis, forces business leaders to take decisive steps to respond to challenges they’ve probably never confronted, without understanding the provenance of the crisis in the first place or the longer-term consequences of the crisis intervention they’re about to take.

Crisis Leadership@2x-1

No great surprise, then, that most leader’s crisis stewardship leaves a lot to be desired. According to the 2018 Deloitte survey, “Stronger, fitter, better: Crisis management for the resilient enterprise,” nearly a quarter (24 percent) of crisis management executives cite effectiveness of leadership and decision-making as one of the greatest challenges facing their organizations, outranking all other factors.

Nor are boards of directors picking up the slack from their top brass. Indeed, they remain largely detached from the particularities of crisis preparedness. Fewer than half of boards, according to survey data, actually engage with senior management to understand how the organization is preparing for crisis.

What’s going on here: why are executives, clearly so capable in business-as-usual (BAU) settings, so ill-equipped to lead their organisations through crisis?

Perhaps, it’s a lack of skill? Only, the literature is pretty clear on this point. Effective crisis leadership isn’t really about picking up new leadership capabilities. Crisis expert Tim Johnson explains it this way: crisis leadership doesn’t require adding new skills, instead it entails demonstrating core leadership competencies under crisis conditions.

That’s an important caveat. Under crisis conditions, leaders will encounter amplification factors-a coinage of the British Standards Institute-that only make crisis response harder. Amplification factors, like the term suggests, are those not-so-little extra-crisis features that only intensify the severity of the crisis situation for crisis actors. They’re factors like complexity and severity, the tendency of crises to move quickly, require timely decision, and/or create an atmosphere of uncertainty and anxiety.

By in large, amplification factors are absent in the BAU context where most executives make decisions. For instance, in the BAU context, business leaders usually have the opportunity to gather all available information and carefully deliberate before making a decision. That decision then gets implemented over the course of time.

The same can be said of experimentation, a mantra in many C-suites. Business leaders, especially successful ones, often try new ideas to see what works. They observe the results, and then, they recalibrate where necessary.

Sure, that approach works well when launching new business initiatives, sounds even better in a TED talk. But in a crisis, just like there’s little time for prolonged deliberation and implementation, there’s even less opportunity for changing course once a decision is taken. In fact, crisis improvisation and experimentation will only send conflicting messages to crisis actors on the ground.

So what should leaders do to build up the managerial resilience they’ll need in the midst of a crisis? Running simulations of the most likely crisis scenarios they’ll face is an easy one. At least, that way, when a crisis strikes, leaders will have a passing familiarity of the crisis management plans they’ll need to execute.

Unfortunately, planning and practicing aren’t enough. Just ask a team of organisational resilience scholars in New Zealand. They found that comprehensive risk management, business continuity, and even crisis management planning weren’t cure-alls when crisis struck. Why was that? Companies still lacked leadership from the top.

Specifically, the response efforts studied weren’t purposed towards a shared set of priorities or a clear set of goals. That larger vision can only come from the top, really. Leaders need to be able to identify what’s most critical to the organisation then communicate that vision to everyone else. That singular vision, from which everything else flows, frames how individual crisis practitioners will manage the response.

In other words, effective crisis leadership happens even before the crisis strikes, in the preparatory or pre-crisis stage. There, leaders will communicate the company vision and also cultivate an ethic of resilience among their people, training employees not only to respond with alacrity (not brittleness) to crisis but also to surface (not bury) complications and potential problems.

Finally, executives err in thinking that crisis leadership is limited to the crisis moment. The mark of an effective crisis leader isn’t a memorable sound bite that wins public sympathy for your company’s cause. Instead, it’s an open company culture, permissive of bad news and opposing viewpoints that often catch crises before they’re born.

 

Topics: Crisis Management, Critical Issues Management, Noggin Crisis


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