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Leading in Crisis Situations Published: Sunday, July 24, 2016 12:02 am By: Ramón L. Rivera, CEO

Some crises may be avoided, and some may be managed well enough to limit long-term damage, but at the end of the day, every organization and every nation will experience a crisis of some magnitude. It is often the handling of a crisis that leads to more damage than the crisis event itself. Effective crisis leadership involves much more than good communications and public relations. Although these certainly help, rhetoric and positive spin alone will not resolve a crisis. Learning from crisis is the best hope we have of preventing repeat occurrences. Crisis events can create a potential for significant opportunity to be realized for individuals and for organizations.

Leading in crisis is about the capability to lead under extreme pressure. Crisis leadership matters precisely because crisis events are inevitable. Leaders of organizations and nations can make a difference in the extent to which people are affected by a crisis. Crisis leadership matters, because, in its absence, the stakeholders who are adversely affected by the crisis cannot truly recover from the damaging event. Despite the damage that is caused by a crisis, effective leadership is the one factor that creates the potential for a company and its stakeholders to be better off following the crisis than it was before the crisis.

Crises are marked by time constraints, ambiguity, remarkably unusual circumstances, limited or conflicting information, curious onlookers and a need for immediate and decisive action. Given these pressures, the demands of a leader in crisis can be unique and require a different set of abilities than would typically be expected during general leadership. Crisis situations promote a hyper-context that calls for extraordinary capability in some of those shared dimensions of leadership.

Crisis leadership is a frame of mind accompanied by a key set of behaviors. The frame of mind 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. Clearly, crises are traumatic and we don’t want to leave a false impression or indicate that there is not real pain and suffering that results from them. Indeed this can be, and often is, the case. Crisis leaders must address and deal with these circumstances. However, leadership is also about creating possibilities so organizations can blossom in ways that might not have been predicted or possible in the absence of the pressures that crises evoke.

In a crisis situation, the individual leader’s learning should happen in tandem with the organization’s learning. At the core of this learning is the skill set for acquiring knowledge and implementing a behavioral change as a result. This calls for a learning orientation that encompasses a propensity to seek knowledge and to use this knowledge for adaptive responses. When learning occurs during a crisis, leaders and their organizations can reduce the negative impact of a crisis if they are willing to examine the root causes of the crisis and cultivate a culture that values data for decision-making. Learning promotes resilience by preparing the organization with the mindset for managing adversity and the capacity to recover from the crisis.

A byproduct of learning orientation is the ability to make sense of the crisis through environmental scanning, and this, in turn, equips leaders to see possibilities for resolving the crisis. To sense-make entails scanning information from multiple sources, integrating the information into a broader context and connecting the dots at both the strategic and tactical levels. Furthermore, during the scanning process, leaders should encourage discussion and debate so organization members challenge the status quo and explore the pathways to the various possibilities.

The ability to make sound and rapid decisions under pressure be- comes a core competency for effectively handling a crisis. Yet, the emotional responses to crisis, characteristics of a crisis itself, contribute to the difficulty of decision-making. In situations where leaders have ample time to respond and abundant access to information, they are more likely to engage in sound decision making. For this competency to transfer to crisis situations, leaders must beware of decision-making biases that are dysfunctional and lead to errors in judgment, such as anchoring decisions in one type of information or a tendency to make decisions that justify past choices or investments. In addition, leaders should be attuned to environmental signals, and use these signals to expedite the decision making process.

Decision-making in crisis situations calls for leaders to examine the ethical implications. This entails making a moral judgment aligned with both the leader's and organization’s values. In addition when making a moral judgment leaders should consider the various stakeholders and how they are impacted by the crisis. The moral judgment is a springboard for action, and the decision maker must decide what to do in light of it. Aligning actions with ethics can be difficult because executing the plan involves working around impediments, resisting distractions and keeping focus on the organization’s goals.

Four components of trust that leaders should consider in crisis situations are: competence, openness, concern and reliability. Leaders need to feel competent and have the confidence that others see them as competent. Open and honest leaders are more believable in a crisis. Showing concern for both the company and for employees during a crisis is especially reassuring. Meeting expectations (being reliable) is another component of trustworthiness that is valued by stakeholders in a crisis situation.

 Leaders must believe that subordinates will perform to the best of their abilities, even though the possibility exists that they will not. In other words, this may require the leader’s willingness to be vulnerable to those who have been entrusted to handle various aspects of the crisis. This willingness is more likely if the organizational culture is generally perceived as trusting. If that culture does not already have trust as a foundation, then there is work to be done to effectively deal with a future crisis.

Crises are opportunities for organizational change and revitalization because a crisis brings to leadership’s attention issues that have been neglected and present possibilities for innovation and system improvements. This demands that leaders transition from feelings of anger, anxiety, guilt and despair to an outlook of optimism and hope. Perceiving a crisis as an opportunity involves leaders enacting a radical vision that inspires organizational members to audit the strengths of the organization and its environment and to use these strengths as resources. This is supported by an organizational culture that reinforces a collaborative “can-do” attitude because of members’ belief that failure is not an option.


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