It was a sunny day in March 2020. At exactly the same moment, several dozens CxOs of well-known companies (at least, well-known in their respective fields) read the article Leadership in a crisis: Responding to coronavirus outbreak and future challenges by Gemma D’Auria and Aaron De Smet from McKinsey & Company. Little did they know at that time that some of them would bring their companies to new heights in spite of the Coronavirus pandemic that had started having major impact on the global economy, while others have entered a path that was doomed to fail. The two groups differ in the degree to which they will have followed the five practices that are discussed below.
Five Leadership Practices For Effective Crisis Response
The McKinsey & Company article at hand describes the coronavirus pandemic as a crisis, as opposed to a “routine emergency”. It warns that executives may mistake a crisis to be a routine emergency when the crisis grows out of familiar circumstances that mask its nature.
Responses to routine emergencies consist of following plans that had been drawn up in advance. During a crisis, a time of unfamiliarity and uncertainty, leaders often improvise effective responses. Therefore, the article posits that “what leaders need during a crisis is not a predefined response plan but behaviors and mindsets that will prevent them from overreacting to yesterday’s developments and help them look ahead”. But how? The article describes in detail five leadership practices for effective crisis response. Below are my key takeaways and interpretations of these practices. Leaders whose crisis response follows these practices are likely to be more successful.
Practice #1: Organizing To Respond To Crises
Practice #1 is about executives shifting responsibilities from their top-down, command-and-control hierarchy to a network of teams. In order to succeed, leaders should:
- Empower a network of teams to carry out responses outside of normal operations. This is opposed to leaders being in control and making decisions top-down.
- Foster collaboration and transparency across the network of teams
- Promote psychological safety
And finally, what in my view may be the most “infrastructural” success factor: “crisis-response leaders must be able to unify teams behind a single purpose“. Successful leaders of successful organizations give their staff something to stand behind, to identify with the cause and believe in. While I believe that this is true at any time, it surely becomes more important at times of crisis.
Implications for leadership: Avoid a top-down hierarchical approach to managing a crisis. The McKinsey & Company article provides good guidance on setting up teams for crisis response. During crisis, leaders should not follow their instinct to “consolidate decision-making authority and control information, providing it on a strictly need-to-know basis”.
Practice #2: Elevate Leaders During a Crisis
A crisis is not the time to be possessive about your responsibilities. It is a time to empower others to make and implement decisions without having to ask for approvals. Leaders are expected to “quickly establish an architecture for decision making, so that accountability is clear and decisions are made by appropriate people at different levels”. While initially “crisis response leaders” will be appointed by senior management, throughout the crisis probably other crisis response leaders will emerge who won’t necessarily hold high positions in the company’s hierarchy. This is partially due to the fact that character is more important than experience, for crisis response leaders. These leaders unify the staff. They are humble, optimistic, analytic and solution-oriented.
Implications for leadership: Building-up on the first practice, the second practice further emphasizes the need for empowerment. It calls for a crisis management approach in which individuals who do not hold high positions in the company take leadership, and are given the space to do so.
Practice #3: Decision-Making: Pause-Assess-Anticipate-Act Cycle
While sometimes fast action is required, in crisis leaders frequently pause from crisis management, assess the situation from multiple vantage points, anticipate what may happen next, and then act.
Implications for leadership: Use your experiences while accepting new insights as they emerge from your crisis response teams. Once you act, be decisive. Not in order to be seen as decisive, but rather in order to motivate your staff.
Practice #4: Demonstrating empathy
What is the difference between managers and leaders? It’s more than semantics. In his HBR Article Managers and Leaders: Are They Different?, Abraham Zaleznik wrote: “Managers embrace process, seek stability and control, and instinctively try to resolve problems quickly—sometimes before they fully understand a problem’s significance. Leaders, in contrast, tolerate chaos and lack of structure and are willing to delay closure in order to understand the issues more fully”. Zaleznik emphasized the importance of empathy for leaders, and suggested that “managers may lack empathy, or the capacity to sense intuitively the thoughts and feelings of others”. Empathy is exactly what leaders need to have at times of crises, according to the McKinsey & Company article. Namely, at times of crisis, “people’s minds turn first to their own survival and other basic needs”. Leaders must be aware of what is on the minds of their staff, their clients, suppliers and business partners. Leaders should communicate empathically, be attentive to struggles of those around them and offer support.
Implications for leadership: Re-assess the skills of people with leadership positions in your organization. Are they leaders? Or are they managers who hold leadership positions although they may not have the characteristics of leaders, and specifically empathy? Lack of empathy will become a critical flaw during crises when managers who aren’t leaders hold leadership positions. Successful leadership through crisis requires leading with empathy.
Practice #5: Transparency and Empathy in Communication
Nobody doubts the importance of effective communication at any time. But what is effective communication at times of crisis? How to communicate effectively during crisis? Here are key takeaways:
- Maintain transparency. In her HBR article Don’t Hide Bad News in Times of Crisis, Amy C. Edmondson makes a strong point about it: “Be clear what you know, what you don’t know, and what you are doing to learn more”.
- Provide frequent updates
- Demonstrate empathy: Leaders should take special care to see that each audience’s concerns, questions, and interests are addressed
Implications for leadership: Implement a communication approach that is based on transparency and empathy. CxOs who find this type of communication challenging should assign the communications role to others for whom this approach is more natural.
The Importance of a Company Culture
If you read between the lines, you will notice that the above discussion focuses on “soft” elements in leadership more than on the hard skills or business decisions of leaders. Behaviors, such as empathy, empowerment and humility, are keys to successfully leading an organization through crisis. Companies where the pre-crisis organization culture is based on such behaviors will surely have an advantage when dealing with crisis. Companies where the culture is based on the opposite behaviors will face more fierce challenges at times of crisis. Yet, is a strong pre-crisis company culture enough?
In their HBR Article Don’t Let the Pandemic Sink Your Company Culture, Jenny Chatman and Francesca Gino warn that “the Covid-19 pandemic could weaken your organization’s culture”. They argue that “even when you create a culture that is strategically aligned and strong (that is, widely shared and intensely valued), it won’t help you over the long run unless you also develop a culture that is adaptive in real time”. They define cultural adaptability as the organization’s “ability to innovate, experiment, and quickly take advantage of new opportunities”. Cultural adaptability helps staff stay focused on the most important initiatives even as they contend with the unprecedented challenges and continuously changing conditions presented by the pandemic, or another crisis.
Conclusion: Increasing Gaps Between Successful and Unsuccessful Companies
In my perception, companies that exhibit such cultural adaptability are the most successful companies in their fields, in pre-crisis times. Google and Amazon would be two of my first examples. Companies that fail to innovate, that hang on to the “old world” where they have been successful, and fail to reinvent themselves, foster the opposite behavior. Following the rationale of the article Don’t Let the Pandemic Sink Your Company Culture, these companies are also more likely to succeed in dealing with crisis. And this leads me to the conclusion that in the post-crisis world we are likely to have even bigger differences between agile, culturally adaptive companies, and companies that represent the “old world” but whose leaders fail (or even worse: do not try) to implement cultural adaptability. Members of the former group will come out of the crisis even stronger, while members of the latter group will suffer, or may even cease to exist.
Suggested reading:
- Leadership in a crisis: Responding to coronavirus outbreak and future challenges by Gemma D’Auria and Aaron De Smet, McKinsey & Company
- Don’t Hide Bad News in Times of Crisis by Amy C. Edmondson, Harvard Business Review (HBR)
- To Be Or Not To Become: The KPI Dilemma by Ziv Baida
- Leadership TED Talks: 30 Of The Best TED Talks on Leadership
- Leadership during crisis TED talk by Gregory Ciottone
- The Psychology Behind Effective Crisis Leadership by Gianpiero Petriglieri, Harvard Business Review (HBR)
