Crisis Leadership: Comprehensive Test for Leaders

Oxford dictionary defines the word as “a time of great danger, difficulty, or confusion when problems must be solved, or important decisions must be made”. Having said that, it does not quantifiably suggest as to… what it means for various levels. A crisis can be personal, professional, economical, pandemic or what we all are going through ‘Global’. The CoVID19 pandemic has placed extraordinary demands on leaders in business and sovereigns. The humanitarian toll taken by CoVID19 creates fear among employees, businesses and supply chains. The massive scale of the outbreak (not seen in past 100 years) and its sheer unpredictability makes it challenging for C-executives to respond. Indeed, the outbreak has the hallmarks of a “landscape scale” crisis: an unexpected event or sequence of events of enormous scale and overwhelming speed, resulting in a high degree of uncertainty that gives rise to disorientation, a feeling of lost control, and strong emotional disturbance. Hence, it becomes utmost importance in developing and re-assessing leadership strategy to manage fear and distress among people. In definite terms, the ongoing pandemic crisis is testing intelligence, harmony, unity and compassion of human race and its leadership.

Recent research from various organisations and thought leaders have penned down key operating principles for “Leadership in Crisis”. After going through numerous research papers, blogs and observing lots of leaders in my professional and personal life. I feel these principles are essential to the emerging thoughts on crisis leadership for 21st Century.

Deciding while Leading

Leading decisively is paramount to the crisis management. Hence, a crisis action team needs to be formed and led by a crisis leader. Given the kind of crisis, the crisis leader can be anyone of them in the top management of the business or country.

The objective of this leader and team would be decisively manage the situation till recovery is not in place. Most of the times, Leaders fail to accept that they are in crisis and lead to poor decisions. Hence, brutal honesty to oneself is pivotal to this process.

Decisive leaders need to find a delicate balance: React too quickly, and they may act on bad information. Wait too long to receive “perfect information” and analysis paralysis may result in making no decision at all. Hence, one needs to master the skill of “Planning ahead while on the move”. Great turnarounds and great crisis leadership are not built on microincrementalism. They are built on bold and decisive acts, and on the courage of leaders to recognize mistakes and make adjustments accordingly

 

Actively Communicate

During a crisis, it’s important to constantly communicate up to lenders and owners, down to employees and vendors, and outside to the media and public. Control the message by designating a crisis manager to be the sole spokesperson and to be the source of honest, consistent information. It’s also critical to keep a record of the facts that the crisis manager knows at each point of the process, to respond to potential lawsuits that may arise. But, try to remain positive. Positive thoughts and actions bolster the situation and put it to recovery path sooner than you expect.

 

Be Ready for Unexpected

Under extreme pressure, leaders need to accommodate the fact that individuals behave very differently under stress than normal. Hence, this can further add to the unpredictability of the event.

 

Common Toppling Curves:

Leaders are faced with a range of challenges when dealing with novel crises. Despite these very different challenges, and these very different crises, there are some common stumbling blocks:

Excessively focusing on fixing the incident, rather than leading the response and addressing the strategic impacts
Failing to understand or underestimating the scale breadth, and speed of the crisis and its unanticipated consequences.
Making poor decisions and unintentionally causing harm, due to bad or incorrect information in the first few hours of a crisis
Not taking the time to make sense of the chaotic inflow of information and answering all the direct inquiries

Ideally, institutions and sovereigns should meticulously invest time and resources in planning crisis management and disaster recovery. In every crisis, there is opportunity for leaders to make something good when it seems impossible. Like firefighters rushing into a burning building, we have to make quick decisions because lives–and businesses–depend on it. As rightfully quoted by Rudy, It is the times of crisis that good leaders emerge.

 

Nihit M

 

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Rajesh Agarwal
Rajesh Agarwal
5 months ago

It’s very wonderful and relevant article in present crisis and complete uncertainty

Divyanshu gupta
Divyanshu gupta
5 months ago

True a good leader always goes through all odds during the crisis and emerges as pathfinder to overcome all sorts of odds and such events…
Very well depicted…

Manish Srivastava
Manish Srivastava
5 months ago

I believe current Indian Leadership fares well on this article’s touchstone.

Who is Nihit Mohan?

12.5 years of experience operating at the intersection of Risk, Retail Banking and Stress Testing within globally recognised Banks in Singapore.

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