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This blog is provided by Lisa Michaels, as a companion to the interview with Melissa Lamson and her interview on Innovating Leadership, Co-creating Our Future titled Managing Effectively in a Complex Global Business Environment that aired on June 30, 2020.
When a crisis hits, some companies survive and thrive afterward, while some perish. Often, what distinguishes these two is good leadership.
As a leader, your role is critical during a crisis. Everyone will look to you to help them make sense of the situation and lead the way out.
Below are some critical steps you should take to reduce the impact of the crisis and emerge stronger.
#1 Communicate with Transparency and Immediacy
Once an incident happens, be quick to communicate and provide much-needed details. Be transparent, no matter how dire the situation is. Transparency allows you to reestablish trust, while immediacy ensures people hear the unbiased news from you, not from others.
This type of communication is important for both your employees and people outside your organization. You will need to repeatedly keep people informed about developments.
Communicating the bad news early to employees is important as people need to be aware of the gravity of the situation to act accordingly.
A good example of effective crisis communication is when one Virgin Group spacecraft crashed, leading to the death of one pilot and the injury of another. The founder and head of the company, Richard Branson, quickly went to the scene of the incident and posted ample updates.
The company showed true concern for the pilots’ families. They then continued to work towards successfully achieving its mission in honor of the pilot’s life. These steps prevented reputational damage to the company.
#2 Lead by Example
You will be the one who sets the tone during a crisis. Your employees will often respond in the same way as you do. If you respond calmly and responsibly, your employees will follow suit. If you live in denial, then others will not likely feel any sense of urgency.
A study conducted by the University of Georgia found that self-discipline, or lack thereof, is contagious. If you find that someone on your team is panicking, it is better to talk to them privately and ask them to stay away from others until they can contain themselves.
It is also essential to maintain a hopeful attitude and not show despair in front of your team. Your team morale is your responsibility, and your behavior has a significant impact on it.
#3 Provide Support to Employees
Crises are said to hit organizations, but in fact, they hit people. As a leader, you need to genuinely empathize with your employees and mitigate the damage.
One German company showed wisdom in its approach to cutting costs in the face of the global financial crisis in 2008 without hurting the wellbeing of its employees.
The company offered its employees to work half time or less based on the actual demand for their services, instead of being laid off. The employees took it well and trusted the management team more.
Once the economy recovered, the company rehired the employees on a full-time basis. The lesson is that you should think about the well-being of people, and people will take care of your company.
Moreover, good leaders show responsibility and concern even if the crisis is not their fault.
An example is Johnson and Johnson’s response to the death of seven people who consumed Tylenol. The company knew Tylenol was not the cause, but it chose to recall the capsules, communicate actively, and establish a hotline to answer queries from worried consumers.
While the recall cost the company a lot of money, it kept the company in good standing. As a leader, you should act responsibly and do what is good for the majority of people involved. It will reflect well on your organization.
#4 Think Ahead to Maintain Operations During the Crisis
A crisis subjects your company to a harsh test. When this happens, people wonder whether the company will still exist after the crisis is over. This is why it’s important to conduct a business continuity planning exercise in advance.
The scope of business continuity planning includes steps to improve business resiliency in case a potential threat is materialized to ensure that operations continue during a crisis.
This involves all major systems which should continue to run in case of a major disruption. In today’s environment, the most vital system in most organizations is the IT system. Therefore, response plans for disruptions to the IT system should be established, and you should be able to migrate your databases if needed.
A good business plan usually includes a disaster recovery plan, but the two should not be confused. A continuity plan ensures that operations continue (or endure), whereas a recovery plan is a plan to come back from a major disaster, such as recovering a large dataset after it is lost.
The high failure rates of business following disasters, such as a fire or major hacking, show that both plans are critical for the organization’s resilience. Proper execution of those plans ensures that companies survive and people maintain their jobs.
#5 Develop Other Leaders
Good leaders empower other people to become leaders themselves, rather than gather followers around them. Good leaders request honest feedback and hear criticism. They are humble and realize that they are imperfect and can benefit from people’s views and opinions.
Moreover, true leaders democratize their organizations. They make others feel valued and empower them to become leaders themselves.
Unfortunately, those qualities are rare, but you can stand out as a leader and build a flatter and more resilient organization.
Crises are there to test what you are made of as a leader. You need to rise to the occasion, come up with solutions quickly, and lead your team through implementing them while staying compassionate.
You will also need to pay attention to people’s morale. You can be honest with your employees about the situation, while still offering hope at the same time.
It is often this honesty and hope that will empower the team to endure, and possibly offer lessons to other teams in the future.
Check out the companion interview and past episodes of Innovating Leadership, Co-creating Our Future, via iTunes, TuneIn, Stitcher, Spotify, Amazon Music, Audible, iHeartRADIO, and NPR One. Stay up-to-date on new shows airing by following the Innovative Leadership Institute LinkedIn.
About the Author
Lisa Michaels is a freelance writer, editor, and a thriving content marketing consultant from Portland. Being self-employed, she does her best to stay on top of the current trends in business and tech. Feel free to connect with her on Twitter @LisaBMichaels.
Photo source: Pexels