“Good leaders build products. Great leaders build cultures. Good leaders deliver results. Great leaders develop people. Good leaders have vision. Great leaders have values. Good leaders are role models at work. Great leaders are role models in life."
-Adam Grant.
Effective leadership can make a huge difference in a company’s success and downfall. There is a lot leaders should go through and do in times of crisis which include managing anxiety, ambiguity, uncertainty etc. Recession, outbreak of COVID-19, world wars, great economic depression are some of the catastrophes leaders from several parts of the world had to face in the past. Such kind of challenges have stretched business leaders and today the shift from a period where an occasional crisis may be anticipated to one where the new is norm is continuous crisis management. In this article let us look at the various strategies, leadership qualities and critical components that successful leaders should follow when a crisis occurs.
Empathy & Compassion and Adaptability & Innovation
Some of the best crisis leaders/managers recognize and give importance to the human element in every crisis. These leaders show compassion & empathy toward people affected by the situation. During the European financial crisis, Dorethy Angela Merkel’s leadership demonstrated the significance of not only working together but also understanding the hardships faced by both individuals & communities.
Crisis managers should be adaptable as well as open to innovation. Although during the initial years of Amazon, Jeff Bezos encountered several crises, the founder’s willingness to pivot the organization’s strategy & embrace new opportunities is one of the testaments to the value of adaptability. Therefore, Amazon today is a global behemoth owing to the leader’s ability of innovating during adversity.
Clear Communication & Decisiveness in the face of uncertainty
Successful crisis leaders always understand the significance of clear, transparent communication. Uncertainty can breed fear & panic and leaders who offer timely & honest information facilitate in removing anxiety and rather build trust. Let us take the example of Jacinda Ardern, ex-Prime Minister of New Zealand during the Christchurch Mosque shootings in 2019. Her empathetic and clear communication reassured the nation and the world.
Often crises unfold rapidly. Therefore, there is not much time for leaders for extensive analysis. Even when the way forward was uncertain, CEOs like Elon Musk have shown the impact & value of taking decisive decisions. Elon Musk’s quick response to challenges that arise in the manufacturing at Tesla & SpaceX proves how the ability of a leader to make tough decisions can save a firm from disaster.
Building a strong team & maintaining a long-term perspective
A leader cannot handle crises alone and hence they should build a strong team which can support them in making important decisions. Warren Buffet the co-founder, CEO & Chairman of Berkshire Hathaway, relied on his team of trusted advisors in navigating the complex world of finance during the 2008 financial crisis & therefore the Berkshire Hathaway conglomerate emerged relatively unscathed.
Most often Crisis managers face immense pressure as they are forced to deliver immediate results. Hence, it is highly essential for them to balance long-term goals with short-term actions. The leadership of Indra Nooyi at PepsiCo during the 2008 recession mainly focused on long-term sustainability. This led to the organization’s continued growth & resilience.
“As businessmen, challenges are our daily companions. To succeed, we must embrace these hurdles with unwavering resolve, refusing to be daunted by their presence. In my journey, I have coined a favorite analogy: while the Stars of Wimbledon face the Center Court once a year, SME entrepreneurs step onto their Center Court nearly every day!,” shares C. Ravi Chandramouli, CEO and MD, Quality Technologies.
“It is this relentless confrontation with challenges that defines our entrepreneurial spirit, pushing us to continually explore, innovate, and triumph in the face of adversity”, he adds.
Accountability & Transparency and maintaining hope & inspiring others
Taking responsibility for mistakes as well as being transparent about these mistakes is highly imperative in crisis management. For instance, in 1982, James Burke’s handling of the Tylenol poisoning crisis is one of the textbook examples of transparency & accountability. Under the leadership of Burke, Johnson & Johnson took swift action. The company recalled products & revamped safety measures, setting a precedent for corporate responsibility.
Lastly, Crisis managers should be the beacons of hope & inspiration. Franklin D Roosevelt during the Great Depression & the 2nd World war demonstrated his ability of instilling hope can rally a country. Roosevelt’s famous quote “The only thing we have to fear is fear itself," is a powerful reminder of the role leaders today should be playing in shaping perceptions during the time of crises.
In summary, leadership in crises is one of the complex & challenging endeavors. However, the lessons we can learn from successful crisis leaders/managers are invaluable. Clear communication, adaptability, accountability, decisiveness, resilience, empathy, team-building and long-term perspectives are some of the important and critical components that are involved in effective crisis management. The present and future leaders can navigate crises with confidence both by applying & studying these principles and ultimately lead their companies to a brighter future.
