Leaders rarely incorporate a crisis or even a mistake into their strategic plan. They want and expect things to go well — a crisis is something you react to, not plan for. However, it is fair to say that, as an outcome of the coronavirus crisis of 2020-2021, some organizations will create a well-thought-out “crisis management plan.” Unfortunately, the challenge for you as a positive influence leader is that the next crisis may look and impact your organization in a much different fashion.
A crisis is an unanticipated problem or event that risks your organization. It may be big — such that it threatens the very existence of the organization — or limited to one area, department, product, or service; the problem may be externally generated, such as a breakdown in the global financial marketplace, or emanate from a single department, plant or product line.
The Elements of an Organizational Crisis
- A Threat to the Existence of the Organization.
- A Shock to the System.
- Pressure to Make Some Initial Decisions Quickly.
A Threat to the Existence of the Organization
Some external threats to an organization are created by mismanagement and sometimes by deliberate misrepresentation by the organization’s leaders. There have been several famous examples of environmental coverups of deliberate disposal of harmful chemicals into various waterways and groundwater sites leading to illness and death of area residents.
Other external threats come from government regulations, directives, and mandates. During COVID, the very existence of the hospitality industry, specifically hotels and restaurants, was threatened by Federal and state mandates that forced many businesses to temporarily close and/or severely restrict the number of customers that could be served. As a result, sales and profits plummeted, forcing employee layoffs and resulting in many businesses shutting their doors permanently. Others, including many we interviewed for this book, survived by making significant adjustments to their business model and leadership style.
Some risks to the future of a business come from inside the organization. A merger or acquisition often disrupts an established, well-functioning culture unless adequate pre-planning is included in the change process. While there is an alignment of both organization’s product line and customer base, organizational norms, business practices, and standards may widely differ. Unless these issues are resolved quickly, the potential for a severe crisis exists.
Other internal threats include:
- Leadership change at the highest level of the organization that involves the departure of the person who has been a seminal figure in the success of the business.
- A technology failure involving the hacking of internal records leads to a loss of faith in the company’s integrity by customers, vendors, and regulators.
A Shock to the System
A shock to the system — a surprise — an unplanned and unpleasant happening almost always results in a business crisis. A wildfire burns down a critical fulfillment warehouse; a deranged gunman opens fire in your office, killing many employees. Most recently, the coronavirus crisis surprised everyone, resulting in disrupted routines. As a restaurant owner told us, “it was so unexpected; it was like an earthquake. We just weren’t prepared because we had never dealt with anything like this before.”
While the shock of COVID impacted many organizations, healthcare organizations, especially hospitals, were hit hardest. At the outset of the crisis in the first quarter of 2020, so little was known about the virus that the stress level was sky-high. Imagine for a moment being a hospital worker at this time and thinking, I want to help our patients but:
- Who is at risk?
- Am I at risk?
- What can I do for my patients?
- How can I protect myself?
- How do I safeguard my family?
- What if I get it?
- I’m stressed — what should I do?
In other impacted businesses such as gyms, restaurants, and bars, leaders were challenged by what was constantly changing and sometimes conflicting information and directives about what was permissible. Government agencies — federal, state, and local — and industry organizations were all issuing updates and other documents intended to help businesses operate during this time. As a result, shock was followed by confusion.
Pressure to Make Some Initial Decisions Quickly
With the threat to the very core of the business combined with the impact of that initial shock on the people of the organization, there is pressure on the leadership team to make some critical decisions at the outset. Integral to this process is the need to provide timely communication to the employees and often to customers about those decisions.
Some leaders feel the need to wait until they have complete information before communicating their plans and decisions to the organization. Such a delay can confuse and, worse, cause a loss of confidence in the organization’s leadership. The recommended approach is to say, “this is our current plan based upon what we know at the moment; however, our plan may be revised when the situation changes. You can be sure that as soon as I know, you will know.”
While complete and accurate information is the goal, it is better to let employees know that you are working on a plan than to say nothing and allow their imaginations to run wild fueled by the media and especially social media sites, some of which traffic in bogus claims and unproven theories. You want to be the voice of reason and the source of wisdom during a crisis.
Some organizations have adopted a crisis management plan to deal with these issues. However, there are tangible differences in crises. An organizational plan to address a natural disaster such as a wildfire or hurricane is significantly different from a plan to respond to a health or safety crisis. Nevertheless, many organizations find it helpful to have documented the steps that should be taken when, for example, there is an active shooter in the building, a widespread power outage on the property, an E-commerce site goes down, or an IT system has a security breach.
A plan is only as good as the people leading the effort. Therefore, many organizations have a crisis management team ready to operationalize the strategy, augment it as necessary and provide communications leadership to lower the stress level and provide employees with the required clarity.
How the Positive Influence Leader Responds
The positive influence leader effectively uses their strengths to help employees deal with the challenges of the crisis. The leadership behaviors that have a significant and positive impact on people include:
- Being supportive of the staff as they deal with the many unknowns, confusing situations, and worries that accompany a crisis. For example:
— “What do you need?
— “How can I help?
— “Just checking in: how can we support you?”
- Teaching people things that will help them better navigate the crisis. For example:
— “We boiled down CDC docs to just the basics.”
— “We set up a command center where staff could call with questions and requests for information.”
— “We walked the floors asking people what they needed to know and providing just-in-time learning.”
- Motivating, empowering, and challenging people to develop creative solutions to the new and fast-changing reality. For example:
— “Our staff is very competent. I just unleashed them.
— “We made it clear to staff that you could innovate on the floor.”
— “People providing direct patient care were solving problems every day on a proactive level without management approval.”
- Serving as a role model who provides an example of effective ways to deal with the vagaries of the crisis. For example:
—“Our senior staff showed up and said, ‘where can we help.’ The best thing we could do was model the behavior we were looking for, e.g., keeping calm, pitching in, doing what was necessary.”
— “When a station manager was working with fewer employees on a shift, I jumped in and helped passengers with their luggage.”
— “We stayed positive but realistic. We showed up. We were present, providing continuity for the people. Everyone was panicked, so just showing up was important.”
A business crisis usually implies a situation where there is an impetus for action. Leaders often feel compelled to decide immediately. The rush to action is generally associated with a feeling of losing control, which can worsen the situation. The effective positive influence leader understands that transparency is critical at this time because while employees are listening to what you say, more importantly, they are watching what you do.
“The worst thing you can do is deny, deceive, or deflect — this opens the door to rumors and distractions. Be honest and say something like:
This is what we know as of this moment, but the situation is fluid, and things may change. However, as soon as I know, you will know.
Written by Glenn Parker.
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