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Ideas for Leaders #088

Crisis Management: Leadership and Communication

Key Concept How many times have you been eagerly awaiting an event, only for unforeseeable circumstances to result in its cancellation? Take the New York marathon as a recent example — it had to be cancelled as a result of the 2012 Hurricane Sandy. Crises are inevitable. But, there are steps leaders can take to avoid their organization from suffering detrimentally. This Idea explores these steps, and considers how to learn from a crisis in its aftermath. Idea Summary Even when there are contingency plans in place, crises can happen and in organizations this is when true leadership is tested. Companies like Apple, Toyota, PepsiCo and many others know this all too well, having come through potentially-crippling crisis situations. But not all organizations are so lucky or so well prepared. So what can be learnt from the experience of others? More importantly, what is expected of a leader when the unthinkable occurs? Well, to start with, good leaders should assume responsibility and acknowledge the seriousness of the situation. Sometimes, it may not be necessary for the CEO to do so, but it does need to be someone high-up in the organization or it will simply look like they do not take the matter seriously. Leaders also need to ensure they designate the right person to ‘take charge’ and coordinate the crisis response. In small organizations, this ‘crisis manager’ will usually be the CEO; larger organizations, however, might appoint a Chief Crisis Officer. It’s not just the size of the organization that influences the choice of the crisis manager; the type of crisis (e.g. product crisis, negligence, reputational crisis, etc.) is also an important factor. Additionally, when appointing or assessing the competence of an existing crisis manager or communications officer, leaders should look for qualities such as: confidence; relational ability; professionalism; and commercial sense. As well as a crisis manager, a crisis committee should also be formed. Depending on the nature of the crisis, this unit can include the director of operations, legal counsel, customer service manager, or even outside specialists. Business Application So what happens once the relevant people are in place? How can leaders ensure their management team will handle the crisis effectively and not let the organization cripple under uncertainty? The following points are some to bear in mind:

Authors Pin, José R.

Institutions

IESE Business School

Source

IESE Insight

Idea conceived 2012

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