WH Situation Room, 2010 (Source: Wikimedia)
Ideas for Leaders #078

Crisis As Opportunity: Leadership, Change and Renewal

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Key Concept

Arguably the greatest gift we can glean from a crisis is an improvement in our ability to see the next one coming, to prevent it coming if possible, and to lead our organization successfully through that next crisis situation. We learn Crisis Leadership. This is essential: crises are inevitable. Similarly, there are essential characteristics and skills required to navigate them, and to ensure your organization not only survives but emerges from the crisis better off.

Idea Summary

In recent years, the capability to lead teams under extreme pressure has become an important asset for leaders. In fact, developing competencies that can assist in leadership during a crisis is now mandatory. With greater natural demand, business schools have been challenged to reconsider and revisit the characteristics and challenges of crisis leadership; with near continual, sharp reminders that crisis events are inevitable.

Crises can have a rippling effect and are experienced by all organizations in some magnitude or another. Leaders in a crisis situation will face a number of different pressures, including unusual circumstances, limited or conflicting information, and a need for immediate and decisive action. Thus, the demands on a leader will be unique, requiring a different set of abilities than general leadership. 

Beyond managing corporate communications and public relations, leaders need to work on building a foundation of trust—not only within the organization but with key stakeholders as well. This goes hand-in-hand with quick and ethical decision-making.

Furthermore, a particular frame of mind accompanied by a key set of behaviours is the key to leading under pressure. Developing a mindset for reflecting, adapting and learning from the crisis situation and its aftermath is at the core of crisis leadership.

Leaders tend to focus on the negative aspects of a crisis. However, it’s important to remember that crises are opportunities for organizational change and revitalization. A crisis can bring to attention issues that have been neglected, as well as present possibilities for innovation and improvements.

In the full article, attached, successful and not-so-successful crisis leadership examples are given throughout, from organizations including; Tyco International, Carrefour, Mattel and McDonalds.

Business Application

The frame of mind to employ for successful crisis leadership is characterized by:

  • Openness to new experiences;
  • Willingness to learn and take risks;
  • An assumption that all things are possible; and
  • A belief that even in times of crisis, people and organizations can emerge better off after the crisis than before.

Also be aware that sound and rapid decision-making is often difficult in crisis situations. In order to tackle this effectively, leaders must beware of dysfunctional decision-making biases that can lead to errors in judgment, such as anchoring decisions in one type of information or a tendency to make decisions that justify past choices. Moreover, we should be attuned to environmental signals, and use these signals to expedite the decision making process.

In order to establish trust in these difficult times, leaders must become vulnerable to those who have been entrusted to handle various aspects of the crisis.

Finally, it is essential that leaders transition from feelings of anger, anxiety, guilt and despair to an outlook of optimism and hope. A collaborative “can-do” attitude should be fostered within the organization.