In the COVID-19 pandemic, we are witnessing a range of crisis responses across organizations—from excellent to awful. From Carnival Cruise Corp.‘s abominable handling of contamination on board its ships at one extreme to companies that have demonstrated good crisis leadership by choosing to take swift actions that put people first, the pandemic has revealed disparities in crisis leadership abilities.
Consider for instance Comcast, whose top executives donated 100% of their salaries to COVID-19 relief charities. The company also committed an extra US$500 million to support employees with continued pay and benefits.
Another good example is Lloyds Bank. The bank has suspended 780 planned job cuts across its bank branches, amid a surge in demand and uncertainty over how many staff may need to self-isolate. An internal letter explained it was “not the right time” for the cuts, “either for colleagues or for customers.” Britain’s biggest High Street bank also said it had granted mortgage holidays to over 70,000 customers in just over a week. The lender also confirmed that it would waive interest on arranged overdrafts up to £300 for all customers across its Lloyds, Halifax and Bank of Scotland branches from 6 April. While this may be considered a temporary “stay of execution,” the decision not to fire these employees received positive coverage in the U.K. media.
Lastly, a perhaps less-known but equally commendable example is pasta maker Giovanni Rana. Although not widely reported in English-language news, Giovanni Rana gave 700 of his employees working during the coronavirus with a salary increase of 25%, as well as additional insurance and childcare benefits. Needless to say, this has received a very positive response from the Italian public.
When crisis responses break down
For several decades now, crisis management has been taught at universities across the world and many multinational corporations and medium and large businesses have tried-and-tested crisis systems in place. So why then, do some organizations still make the same mistakes when faced with a crisis? Are we merely forgetting the lessons when faced with the pressures of crises? Is the stress so great that primary reactions prevail? Do we let quick fixes overtake long-term credibility objectives? What happens to the values and codes of conduct statements that are so proudly displayed on websites, in office lobbies and in promotional materials?
Granted, the current pandemic and its impact are unprecedented. Following several global health crises such as SARS, H1N1 and others, many organizations established crisis response and pandemic business continuity plans, but it is doubtful whether any actually anticipated and prepared for the scale of global lockdowns.
If we acknowledge that much has been done to enhance crisis preparedness and improve response effectiveness, what is the key common denominator that seems to derail all this good work when it is most needed?
Crisis leadership can make or break your organization
“There is a popular English proverb that says ‘cometh the hour, cometh the man’—the idea that the right leaders will come to the fore during times of crisis…. For many leaders across the world, ‘the hour’ has now come again” says author David Robson in his article “Covid-19: What makes a good leader during a crisis?”
Strong crisis leaders “walk the talk.” They recognize that actions speak louder than words, but that unless stakeholders know what is being done, misconceptions will prevail and spread dangerously, breaking stakeholder confidence. They listen and are empathetic, provide purpose and direction, take responsibility, make tough decisions under pressure, think outside the box, and stand tall even when communicating bad news. The key objective to be able to survive but also possibly emerge stronger from a crisis is to sustain credibility by telling it like it is and being consistent. This may seem like a tall order to many.
Clearly, leaders will not necessarily be able to display all these attributes in every crisis situation naturally. A great leader in peace time is not by default a great leader in war time. Leaders are often insufficiently prepared for the stress of crises and this can affect their ability to make critical decisions. Accepting that there is a difference and being willing to learn what it takes to be a strong crisis leader is the starting point. And this is where crisis leadership training comes in.
Learning to lead in a crisis
Crisis leadership models advocate that the best crisis teams are made on the basis of suitability rather than functionality. At the senior-most level where crisis stakes are the highest, competency development and upkeep is essential. Building the right mindset and reflexes comes through regular practice.
When faced with a crisis, leaders must not jump in and override or ignore established plans.
“Even when organizations are aware of how to proceed, they sometimes abandon their plans when confronted with crises,” says Alan Zaremba, Ph.D., author of Crisis Communication: Theory and Practice. “There can be knee-jerk reactions to stonewall, deny, or think that the crisis will go away if it is ignored. Often an organization’s culture undermines an intelligent plan. A culture that values ambiguity and duplicity can render even the most intelligent plan useless. A culture that respects transparency and long-term success, facilitates effective crisis communication efforts.”
In real life, this means that, when faced with a crisis, leaders must not jump in and override or ignore established plans. Rather, they must drive crisis response according to the values and principles that they helped embed in the organization. This is essential to be able to hold the course through the storm, address stakeholder pressure, anticipate and be ready for a worsening turn of events, and more. And they must do so keeping everyone focused on the vision of the aftermath of the crisis, a vision they helped to articulate from the onset.
Invest in preparedness
Effective crisis leadership is not about winning or losing or finding the perfect solution, especially in a crisis of the magnitude of COVID-19, where control is limited. It is about recognizing that while no one can control the events, crisis leaders can control the way they chose to respond and behave. Ultimately, crisis leadership is about steering the course through chaos and adversity and avoiding a reputation train wreck by sustaining stakeholder trust.
As long as crisis preparedness is perceived as a cost and not an investment, the mindset will not shift and mistakes will continue to be made. Numerous statistics show the devastating costs of crises: from human lives and livelihoods to assets, market share, share price, ruined reputations and so on.
The huge losses directly and indirectly caused by the COVID-19 crisis are already visible. Organizations that have demonstrated strong crisis leadership will do well. So isn’t it high time leaders made sure that crisis preparedness is a “must-have’ and not merely a “nice to have”? We will only truly advance and stop repeating the same mistakes if our leaders keep the pulse on crisis preparedness. They are the ones that must foster a vigilant and resilient culture in their organization so that when a crisis hits, they are at the helm leading and not just reacting.