Crisis leadership is vital for organizations confronting unexpected adversity. Although crises are inevitable, effective leaders can ensure their organizations not only survive but also emerge stronger. Preparation and resilience are crucial.
What Is a Crisis?
Crises may be sudden or prolonged, but effective leadership determines how organizations respond to and recover from them. Most crises follow a pattern: rapid onset, heightened emotions, and urgent calls to action.
A Crisis Often Begins With an Unexpected Event That Demands Immediate Action
Emergencies can escalate into crises as impacts become clear, intensifying emotions and prompting action. Such responses may trigger secondary crises affecting reputation, finances, or operations.
Types of Crisis Impact
Crises commonly impact organizations in 6 ways: customer relations, finances, regulatory compliance, operations, reputation, and human well-being.
Each impact can be catastrophic alone, but facing multiple impacts simultaneously highlights the value of strong leadership.
Customer Impact: Communicate Swiftly to Address Concerns and Maintain Trust
During a crisis, communicate promptly with customers and supply chain partners to maintain trust and meet commitments.
Financial Impact: Prepare Mitigation Strategies to Alleviate Losses
Crises come in all shapes, sizes, and severities. Whether it’s tornado damage to your building, a data breach, or a global multiyear pandemic, assess your risk now and determine your risk threshold. While financial losses may be unavoidable, you can mitigate some risks by doing your homework before the crisis, which may help you survive the long-term effects.
Regulatory Impact: Maintain Compliance to Avoid Penalties
Maintain up-to-date compliance plans and employee training to minimize regulatory risk, and respond effectively to threats such as data breaches.
Organizational Impact: Establish Contingency Plans to Sustain Operations
Identify your minimum business continuity objectives (MBCOs)—the lowest level of critical operations needed to function. MBCOs are unique to each organization and workstream.
Reputational Impact: Safeguard Credibility Through Proactive Policies
Credibility is crucial. Proactive policies and rapid response help mitigate reputational crises, whether from leadership missteps or operational failures.
Human Impact: Prioritize the Well-Being of Employees and the Community
People are often the most profoundly affected by a crisis. Leaders must alleviate distress and reassure teams, customers, and the community that appropriate steps are being taken.
What Is Crisis Leadership?
Crisis leadership is defined by actions and behaviors that shape an organization’s future. Leaders rooted in vision and values can guide teams through any crisis.
Benefits of Crisis Leadership
- Effective crisis leadership reduces turnover, enhances problem-solving, and supports long-term organizational success. Empathy, trust, decisiveness, and adherence to values are essential traits
- Workplaces that practice business continuity management foster flexible thinking, resulting in better daily problem-solving. Employees will follow your example; a well-prepared expert can serve as a beacon during dark times
- Strong crisis leadership not only safeguards organizations in the short term but also builds long-term reputation, employee retention, and customer satisfaction
Key Pillars: Survive the Crisis, Rebuild Routines, and Sustain Operations With a Resilient Workforce, Strong Leadership, and Robust Business Continuity Management
The goals are clear:
- Survive the crisis: physically, logistically, financially
- Rebuild into an optimized routine
- Continue operations
These goals translate into your crisis toolkit. To survive and thrive, you need:
- A resilient workforce
- Outstanding leadership
- Business continuity management
These interdependent facets depend on one thing: a prepared leader.
Outstanding Crisis Leaders Demonstrate:
Communication
Communication is central during and after a crisis. Both verbal and nonverbal cues, as well as tone and timing, shape staff resilience, customer confidence, and organizational survival.
Empathy
Empathy is essential in crisis leadership. Recognizing and managing emotions fosters trust, morale, and retention. Role modeling vision and values inspire confidence and resilience. Employees follow leaders’ examples, especially during challenging times.
Integrity
Integrity builds trust—leaders must be honest and follow through on commitments.
Competence
Competence is essential; leaders must understand core business operations to guide their organizations effectively through crisis.
Courage and Tenacity
Courage and tenacity inspire teams to persevere despite obstacles. Decisive action and adaptability are critical.
Leaders must make timely decisions, communicate plans clearly, and adapt as situations evolve. Even when the right path is unclear, moving forward with transparency helps teams focus on the future.
Communication Underpins All Effective Crisis Leadership Traits, Connecting Vision, Empathy, and Decisiveness
After a crisis, leaders must choose between persisting with old routines or embracing change. While familiarity provides comfort, adaptation can open new opportunities.
There are benefits and drawbacks to both options. Hanging on to “what’s still the same” may provide short-term comfort during a difficult time, but the short-term discomfort that comes with a reset can lead to great opportunities.
Preparing to lead in times of crisis not only strengthens an organization’s culture but may also be the key to survival when adversity strikes.
