Crisis Leadership Report Notes

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Jan 9, 2024

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The cost of poor leadership So what is the cost when a leader fails to exhibit and balance these critical components of their role? A leader that does not align with, act on or uphold the organization’s values can encounter tensions that impact their ability to drive results. Poor leadership can reinforce the wrong values, behaviors, and attitudes, creating interferences that can shape a toxic culture and create discord between an organization’s image and how they actually operate. A leadership study 1 conducted by Deloitte measured the impact of effective leadership, finding that the quality of senior leadership had a measurable impact on analyst opinions about whether companies would be successful. Results showed, on average, an equity premium of up to 15 percent for organizations with perceived effective leadership and a discount of as low as 19 percent for organizations that were perceived to have ineffective leadership. These results reinforce an old saying: leaders make and break organizations every day. Leadership and culture are the cross hairs that, when coordinated, can make for a competitive advantage in an organization. Let’s take a look at three key areas where the intersection between leaders and culture is paramount. 1. A leader needs to fit with the culture and model desired behaviors An organization’s culture isn’t always “right,” and a leader’s approach certainly isn’t infallible either—but at the end of the day, the leader’s example sets the tone for the organization. Leaders’ values, actions, and the development of their teams need to visibly reinforce the culture of the organization. Through the example they set, leaders shape the culture in their words and actions every day. These actions then gain momentum through a variety of structures, policies, and governance, shaping how employees operate. 2. A leader needs to understand his or her fit with the culture and use that awareness to drive positive change Some leaders tend to “go with the flow,” leveraging existing channels to get things done. Others may tend to move outside of the typical way things get done, using a different set of values or behaviors to achieve results. Leaders in tune with their fit in the existing culture can more effectively drive change through understanding when to leverage existing ways of working and when to mix up their approach. An effective leader uses this self-awareness to inform an intentional approach toward daily decision making, recognizing each action shapes the culture they operate within. 3. A leader needs to connect with employees’ hearts and minds, aligning to a common purpose

As discussed in our publication, " Take your corporate culture off cruise control ," emotions are the driving force for human behavior, more than rational calculation. To shape and sustain organizational culture, leaders need to connect with the emotional side of the workforce, creating a shared sense of purpose and motivation. Efforts leaders make to shape and guide the behaviors connected to a greater purpose can have a multiplier effect and quickly gain momentum across the organization. Leaders shape the culture So what does it all mean—did the egg really come before the chicken? Does the leader create the culture, or does the culture create the leader? At Deloitte, our experience shows that a culture aligned to an organization’s strategy can provide a competitive advantage. Leaders not only set the strategy, they also play an instrumental role in connecting with the hearts and minds of their workforces, reinforcing the values and habits through their own behavior and actions, and ultimately shaping their organization’s culture. Deloitte. (2023). The Culture or the Leader: An organizational view of the chicken or the egg question. https://www2.deloitte.com/us/en/pages/human-capital/articles/the-culture-or- the-leader.html “It’s the unseen or unanticipated crises that are potentially the most dangerous,” (para. 2) “An unanticipated crisis can easily overwhelm contingency mitigation techniques and risk management programs, such as business continuity, disaster recovery, health and safety plans or emergency response. Management can even exacerbate a crisis if bad news is marginalized or otherwise ignored until it’s too late,” Ms. Woo adds. (para. 3) Crises can be divided into two types: routine and novel.² Routine events³ are the known risks for which organizations can plan and develop procedures. Examples include safety plans for manufacturers, recall plans for food companies and liquidity plans for financial institutions, as well as disaster recovery and security plans for companies across industries. (para. 4) A crisis puts to the test the decision-making skills of an organization’s management and employees. ”If you are too quick to make a decision, you might be basing the decision on incorrect or inadequate information; by the same token, waiting for the perfect set of data can lead to analysis paralysis and slow decision-making or no decisions being made at all,” says Ms. Woo. “During a crisis senior executives can find themselves overwhelmed by the vast amount of information and the whole information and communications environment,” she adds. (para. 7) The following five operating principles can help executives manage the unexpected across different types of crises: (para. 8)

Lead decisively; Continuously frame the crisis; Actively communicate; Be ready for the unexpected; Drive toward actionable intelligence Deloitte. (2023). Crisis Leadership: Five Principles for Managing the Unexpected. The Wall Street Journal. https://deloitte.wsj.com/riskandcompliance/crisis-leadership-five- principles-for-managing-the-unexpected-1436155352 Crises can emerge in many different forms, and they often strike without warning. Many large organizations have formulated contingency plans for emergencies. But what most of these plans omit is a crucial factor in effective crisis management: emotional intelligence (EI). Intelligent handling of the emotions that come with crisis is crucial. An emotionally intelligent leader will handle any crisis, big or small, better than someone without EI competencies. The four domains of Emotional Intelligence — self awareness, self management, social awareness, and relationship management — each can help a leader face any crisis with lower levels of stress, less emotional reactivity and fewer unintended consequences. (para. 2) Self Awareness You demonstrate Self Awareness when you’re conscious of your own feelings and your thoughts about them. The adage, “Knowledge is power,” holds true here. Being aware of your own feelings puts you in charge, not your emotions. When Trina learns about the omission in the announcement, she worries about the amount of work needed to rectify the problem. She is undoubtedly angry with the people who were supposed to proofread the mailing. But with thoughtful awareness of those feelings, she can choose how to handle them in a constructive way ± quickly sending a correction to the announcement, and ensuring there’s better protocol for proofreading in the future. (para. 1) Self Control Likewise, Jack feels frantic about the tech mess confronting him. Without self control, Jack will be in the grip of an amygdala hijack and be at the mercy of his feelings. The amygdala, the “fight or flight” section of the brain, responds rapidly to threats, real or perceived, and during a hijack can overwhelm the prefrontal cortex, the area of the brain responsible for planning and strategizing. In my book, The Brain and Emotional Intelligence , I call the amygdala the “bad boss” of the brain and the prefrontal cortex the “good boss.” When you're in the middle of a crisis, you want the good boss to come to work and exert control over the bad boss. You can train your brain to strengthen the prefrontal cortex’s capacity to exert control over the amygdala. Research done by Richard Davidson and Jon Kabat-Zinn shows that regular practice of simple yet powerful mindfulness exercises can make employees more resilient. All of this can result in leadership that’s much more emotionally balanced and effective .

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Social Awareness Harriet faces major challenges in dealing with the asbestos problem and its potential effect on her colleagues. Much of the work before her involves dealing with people who are worried or upset, including potentially sick staff members, the panicky building crew and public-health officials. If Harriet approaches each of these people with empathy for their concerns, she will be much more successful in obtaining their help to resolve the crisis. Likewise, if she has a sense of social awareness for all the ways in which this crisis impacts the business, people, and systems involved in correcting the problem, she’ll be much more likely to succeed in handling it without missing something important. Relationship Management When crisis strikes, it is essential to manage many relationships among many people. I call relationship management “friendliness with a purpose,” the ability, through inspiring others, managing conflicts, fostering teamwork, and other competencies, to moving people in the direction you desire. Each of these competencies requires self awareness, self control, and social awareness. Developing the competencies will take time and effort, but you will be rewarded for your work. You may not be able to undo a crisis this moment, but emotional intelligence will help make the process of getting through the next one much smoother. Goleman, D. (2023). 4 Leadership Skills for Crisis Management. Korn Ferry. https://www.kornferry.com/insights/this-week-in-leadership/leadership-skills-for-crisis- management How leaders react to critical incidents and organizational crises – page 5 Crises by their very nature draw the attention of everyone around it. A leader’s reaction to a crises situation, speaks much about the organizations values, norms and culture. Crises situations in the organization tend to bring out the organizations core values. Schein, (2004) opines that “when an organization faces crises, the manner in which leaders and others deal with it creates new norms, values, and working procedures, and reveals important underlying assumptions. Crises in an organization generate a great deal of attention and emotional involvement for those associated with the organization, particularly if the crises threaten the survival of the organization. Because of the intensity of the emotional involvement, such periods increase the intensity of learning in the organization. In crises, people’s deeper values are exposed. Every ones reactions become visible, because attention is focused on the situation. In crises situations, the meaning of the deeper levels of culture – artifacts (the level where culture becomes clear and has immediate emotional impact), espoused value – (what the organization’s values are), and the basic underlying assumptions – (the taken for granted assumptions) of the organization are truly exposed. This exposure will increase the potential to either reinforce the existing culture, or to simply change the existing culture. In such crises situations, leaders can influence the

organizational culture to support strong moral and ethical behaviors, and reinforce the creation of new organizational values. Such situations become a rallying point for the leader to teach, coach and mentor. Madu, B. (n.d.). Organization culture as driver of competitive advantage. Journal of Academic and Business Ethics. http://www.aabri.com/manuscripts/11791.pdf

Crisis Leadership Report Notes

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