Leading through a crisis: how to pass the acid test of management

Published: Wednesday, 31 October 2018 09:26

Steering an organization through its worst days is the acid test of leadership for any CEO. In this article Jonathan Hemus offers some tips to help ensure that your CEO is fully prepared for such an eventuality.

As Richard Branson once said: “The test of a company’s leadership, and of a CEO in particular, usually comes during a crisis.” A failure to say or do the right things can result in significant damage to the organization’s hard-won reputation. No training, rehearsal or external advice can guarantee that an organization will navigate through a crisis, but by fostering a crisis-resistant culture within the organization, coupled with the right guiding principles on what to do and say, leaders can create the foundations for successful crisis management.

A crisis-resistant organization starts with its culture

A recent study from Harvard found that CEOs spent just one percent of their time on crisis management; a worrying statistic if you consider that no organization is crisis-immune and that crises can destroy reputations in a matter of hours. Leaders should ensure their organization is as crisis-ready and crisis-resilient as possible.

The most effective form of crisis management is crisis prevention, and the most effective crisis prevention is creating a crisis-resistant culture within your organization. Leaders who accept that a crisis will, at some point, hit their organization are more likely to succeed as they will already be prepared to act.

This was a lesson that Oxfam’s CEO, Mark Goldring, recently learned after the charity was embroiled in a sex scandal, earlier this year. Goldring went on record in an interview with the Guardian, and said: “The intensity and the ferocity of the attack makes you wonder, what did we do? We murdered babies in their cots?” Goldring’s response demonstrated a lack of acceptance that this was in fact a crisis and, following subsequent reports of employee misconduct within the organization, implied that Oxfam did not have a crisis-resistant culture.

In an organization with a crisis-resistant culture, all staff are actively encouraged to escalate anything that they believe could be a problem. It is the responsibility of the organization’s leader to facilitate this behaviour by encouraging whistle blowers and making it clear that early warning of a possible crisis is to be encouraged.

Leaders should personally champion this behaviour within their organization and take tough action against those who fail to embrace this culture, whilst rewarding those who do.

Being crisis-ready also requires the organization to plan and rehearse crisis scenarios so that every member of staff knows what their role is and what is expected of them in any given situation.

Guiding principles for leaders during a crisis

When a crisis does strike, the true mettle of a leader will become apparent. Successfully protecting the organization’s reputation will depend on their deployment of five key principles:

1. Taking responsibility for decision-making: one of the most common pitfalls in a crisis is a failure to make a decision, either at all or quickly enough. A successful leader will get on the front foot during a crisis as opposed to simply reacting to events and allowing the crisis to manage them.

2. Don’t hide behind advisors: lawyers and other advisors play an important role in shaping an organization’s response to a crisis. But advisors are there to advise, leaders are there to lead. It is the responsibility of the leader to listen to counsel from the experts, but then commit to the actions and words they believe are in the best interests of the organization.

3. Be visible: As Richard Branson said after the 2014 Virgin Galactic accident: “When the chips are down, and your company is about to make headlines for the wrong reasons, there is nothing more important for a CEO than being present.” While leaders must spend time with their leadership team and advisors, it’s also important that they don’t retreat to their ‘crisis bunker’. Leadership is about being visible, inspiring confidence and showing support for those affected.

4. Be personal: crises require leaders to behave and talk like normal human beings, not corporate automatons. As crises will invariably harm or impact people, leaders must show emotional intelligence to communicate and act both empathetically and clearly. A good example of this is how Merlin Entertainments’ CEO, Nick Varney, responded to the ‘Smiler’ crash at Alton Towers in 2015 that left 16 people injured. Varney didn’t look to shift blame or disassociate the company with the accident; he stood in front of the cameras and clearly communicated that the only thing that mattered was those people injured in the accident.

5. Do the right thing, say the right thing: leadership in a crisis requires courage. Courage to do and say the right thing. Doing the right thing can mean taking decisions and actions that are difficult, inconvenient and costly. Saying the right thing can make leaders feel vulnerable, uncomfortable or legally exposed. But being an effective crisis leader requires the instinct to know what the right thing to say is, and the courage to act on it.

Crisis management is the acid test of leadership. Passing the test requires leaders to consider their risk landscape and how they want their organization to respond them. It also means creating a crisis-resistant culture, where issues are quickly escalated and addressed rather than being swept under the carpet. Doing so will ensure your organization is prepared for the worst day of its corporate life.

Should that fateful day arrive, leaders who understand the guiding principles for successful crisis management will be better placed to do and say the right thing, enabling them to retain the trust of their stakeholders and protect their reputation.

The author

Jonathan Hemus is managing director of crisis management specialists Insignia.