This column is part of Globe Careers' new Leadership Lab series, where executives and leadership experts share their views and advice about the leadership and management issues of today. There will be a new column every weekday. Find all Leadership Lab stories at tgam.ca/leadershiplab
Nothing in a career tests one’s leadership mettle like a crisis. Occurring most often without advance notice, a crisis puts the organization and its leaders under an intense and public microscope, slams the brakes on productivity, and strains relationships with employees, customers and regulators.
Crises most certainly threaten careers and frequently derail entire businesses. Managing a crisis requires executives, and most certainly the chief executive officer, to flex every leadership muscle ever developed. Even then, success can be elusive.
In a crisis, the most basic human reaction is fight or flight. This is instinctual and unavoidable, but often not helpful. You most certainly cannot run away from a crisis and, depending on the circumstances, you are probably not in a position to lash out. The response to a crisis must be reasoned, responsive and responsible. The leader must display sangfroid, but not appeared too detached from unfolding events. Crisis management is the ultimate balancing act.
Accidents or “acts of god” require leaders to be visible, empathic and action-oriented. Media and stakeholders are anxious to hear what you know and what you intend to do. You must rally the troops; keep the public informed (and the list of those you must inform will be long). The news media will hang on every word and you need to decide what will be said by whom, to whom and when.
The rule of thumb in a crisis includes sharing what you know – the facts, your plan to help resolve the issue, and your commitment to keep everyone up-to-date as the crisis unfolds. This could be days, weeks or months. The BP oil spill crisis unfolded over 87 days. The Chilean mine crisis took 69 days before it was successfully resolved.
Post-crisis, business leaders need to reflect on what happened, why it happened and how it can be avoided or minimized in the future. Governments will inevitably focus their attention on the industry to see how they can regulate the business into safer practices. This is evident in the luxury cruise business post-Costa Concordia and more recently in the rail transportation business post-Lac-Mégantic. For industries hoping to avoid further regulation, the burden on the leader is to demonstrate what the company has learned having gone through the crisis and how it will conduct itself in the future.
Often, but not always, an apology is expected or demanded. Media and sometimes the public expect to see someone lose their job. These are difficult decisions for the CEO to make. Public outrage can overwhelm what the CEO may see as a reasonable post-crisis reaction. Decisions during and after the crisis will have a long-term impact on the company’s brand image and will forever be part of its corporate history.
Increasingly, today’s crises involve allegations of unethical behaviour, malfeasance or perceived corporate greed or self-interest.
Witness recent events in the Senate, Toronto’s City Hall, Montreal-based engineering giant SNC-Lavalin, and the U.S. National Security Agency. Each of these examples sparked public anger, pitted people against people (often within the organization itself) and are characterized by serial allegations and as many denials. They can feel like death by a thousand cuts as new information slowly leaks out, escalating attention and outrage.
The leader, perhaps giving the benefit of the doubt to colleagues or employees accused of wrongdoing is often inclined to defend the organization and the people involved.
These decisions are key and taking strong positions early tend to be big bets; paying dividends when right but deadly if proven wrong. Better for the CEO to take allegations seriously, gain all the facts, and if the organization or select people have acted inappropriately, take action and, importantly, take responsibility. This, like the apology, can be tough to do. The fact is that the CEO probably did not know of the actions and may feel as much a victim of the perpetrator as others. Even so, when senior executives hold themselves responsible and suffer the natural consequences, employees and media take notice.
Crises are not fun. Leaders must endure intense pressure; make tough calls and commit to managing the crisis and nothing else. There will be no shortage of advice for a CEO during a crisis, but the best leaders manage from a set of core values that inform what is right and what matters.
For the rare few, crises can mean opportunity, but not before enduring some long days and sleepless nights.